Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2016 | Jun. 30, 2016 | Nov. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CINTAS CORP | ||
Entity Central Index Key | 723,254 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 9,901,161,464 | ||
Entity Common Stock, Shares Outstanding | 104,207,491 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Revenue: | |||
Uniform rental and facility services | $ 3,777,801 | $ 3,539,843 | $ 3,304,635 |
Other | 1,127,657 | 937,043 | 889,209 |
Total revenue | 4,905,458 | 4,476,886 | 4,193,844 |
Costs and expenses: | |||
Cost of uniform rental and facility services | 2,106,793 | 2,007,632 | 1,922,477 |
Cost of other | 668,795 | 547,917 | 521,608 |
Selling and administrative expenses | 1,348,122 | 1,224,930 | 1,147,039 |
Operating income | 781,748 | 696,407 | 602,720 |
Gain on sale of stock of an equity method investment | 0 | 21,739 | 0 |
Interest income | (896) | (339) | (229) |
Interest expense | 64,522 | 65,161 | 65,822 |
Income before income taxes | 718,122 | 653,324 | 537,127 |
Income taxes | 261,181 | 242,803 | 199,355 |
Income from continuing operations | 456,941 | 410,521 | 337,772 |
Income from discontinued operations, net of tax of $133,712, $11,110 and $34,060, respectively | 236,579 | 20,097 | 36,670 |
Net income | $ 693,520 | $ 430,618 | $ 374,442 |
Basic earnings (loss) per share, continuing operations (dollars per share) | $ 4.15 | $ 3.51 | $ 2.78 |
Basic earnings (loss) per share, discontinued operations (dollars per share) | 2.15 | 0.17 | 0.30 |
Basic earnings per share (dollars per share) | 6.30 | 3.68 | 3.08 |
Diluted earnings (loss) per share, continuing operations (dollars per share) | 4.09 | 3.46 | 2.75 |
Diluted earnings (loss) per share, discontinued operations (dollars per share) | 2.12 | 0.17 | 0.30 |
Diluted earnings per share (dollars per share) | 6.21 | 3.63 | 3.05 |
Dividends declared and paid per share (dollars per share) | $ 1.05 | $ 1.70 | $ 0.77 |
Consolidated Statements of Inc3
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Income Statement [Abstract] | |||
Discontinued operations, income tax expense | $ 133,712 | $ 11,110 | $ 34,060 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 693,520 | $ 430,618 | $ 374,442 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (11,933) | (38,538) | (9,787) |
Cumulative translation adjustment on Shred-it | 6,472 | 0 | 0 |
Change in fair value of derivatives | (12,156) | 37 | (228) |
Amortization of interest rate lock agreements | 1,952 | 1,952 | 1,952 |
Other | (738) | (350) | (1,632) |
Other comprehensive loss | (16,403) | (36,899) | (9,695) |
Comprehensive income | $ 677,117 | $ 393,719 | $ 364,747 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 139,357 | $ 417,073 |
Marketable securities | 70,405 | 16,081 |
Accounts receivable, principally trade, less allowance of $19,604 and $15,674, respectively | 563,178 | 496,130 |
Inventories, net | 249,362 | 226,211 |
Uniforms and other rental items in service | 539,956 | 534,005 |
Income taxes, current | 1,712 | 936 |
Assets held for sale | 0 | 21,341 |
Prepaid expenses and other current assets | 26,065 | 24,030 |
Total current assets | 1,590,035 | 1,735,807 |
Property and equipment, at cost, net | 994,237 | 871,421 |
Investments | 124,952 | 329,692 |
Goodwill | 1,291,593 | 1,195,612 |
Service contracts, net | 83,715 | 42,434 |
Other assets, net | 19,861 | 17,494 |
Total assets | 4,104,393 | 4,192,460 |
Current liabilities: | ||
Accounts payable | 114,514 | 109,607 |
Accrued compensation and related liabilities | 101,976 | 88,423 |
Accrued liabilities | 349,065 | 309,935 |
Liabilities held for sale | 0 | 704 |
Long-term debt due within one year | 250,000 | 0 |
Total current liabilities | 815,555 | 508,669 |
Long-term liabilities: | ||
Long-term debt due after one year | 1,050,000 | 1,300,000 |
Deferred income taxes | 259,475 | 339,327 |
Accrued liabilities | 136,704 | 112,009 |
Total long-term liabilities | 1,446,179 | 1,751,336 |
Shareholders' equity: | ||
Preferred stock, no par value: 100,000 shares authorized, none outstanding | 0 | 0 |
Common stock, no par value: 425,000,000 shares authorized, 2016: 179,598,516 shares issued and 104,213,479 shares outstanding, 2015: 178,117,334 shares issued and 111,702,949 shares outstanding | 409,682 | 329,248 |
Paid-in capital | 205,260 | 157,183 |
Retained earnings | 4,805,867 | 4,227,620 |
Treasury stock: 2016: 75,385,037, 2015: 66,414,385 shares | (3,553,276) | (2,773,125) |
Accumulated other comprehensive loss | (24,874) | (8,471) |
Total shareholders' equity | 1,842,659 | 1,932,455 |
Total liabilities and shareholders' equity | $ 4,104,393 | $ 4,192,460 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 19,604 | $ 15,674 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, shares outstanding ( in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 425,000,000 | 425,000,000 |
Common stock, shares issued (in shares) | 179,598,516 | 178,117,334 |
Common stock, shares outstanding (in shares) | 104,213,479 | 111,702,949 |
Treasury stock, shares (in shares) | 75,385,037 | 66,414,385 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-In Capital | Retained Earnings | Other Accumulated Comprehensive Income (Loss) | Treasury Stock |
Balance (shares) at May. 31, 2013 | 174,786 | 52,505 | ||||
Beginning Balance at May. 31, 2013 | $ 2,201,492 | $ 186,332 | $ 109,822 | $ 3,717,771 | $ 38,123 | $ (1,850,556) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 374,442 | 374,442 | ||||
Comprehensive income (loss), net of tax | (9,695) | (9,695) | ||||
Dividends | (93,320) | (93,320) | ||||
Stock-based compensation | 44,746 | 44,746 | ||||
Vesting of stock-based compensation awards (shares) | 465 | |||||
Vesting of stock-based compensation awards | 0 | $ 23,519 | (23,519) | |||
Stock options exercised, net of shares surrendered (shares) | 1,127 | |||||
Stock options exercised, net of shares surrendered | $ 41,902 | |||||
Stock options exercised, net of shares surrendered | 41,902 | |||||
Repurchase of common stock (shares) | (6,836) | |||||
Repurchase of common stock | (370,599) | $ (370,599) | ||||
Other | 3,890 | 3,890 | ||||
Balance (shares) at May. 31, 2014 | 176,378 | 59,341 | ||||
Ending Balance at May. 31, 2014 | 2,192,858 | $ 251,753 | 134,939 | 3,998,893 | 28,428 | $ (2,221,155) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 430,618 | 430,618 | ||||
Comprehensive income (loss), net of tax | (36,899) | (36,899) | ||||
Dividends | (201,891) | (201,891) | ||||
Stock-based compensation | 47,002 | 47,002 | ||||
Vesting of stock-based compensation awards (shares) | 575 | |||||
Vesting of stock-based compensation awards | 0 | $ 37,265 | (37,265) | |||
Stock options exercised, net of shares surrendered (shares) | 1,164 | |||||
Stock options exercised, net of shares surrendered | $ 40,230 | |||||
Stock options exercised, net of shares surrendered | 40,230 | |||||
Repurchase of common stock (shares) | (7,073) | |||||
Repurchase of common stock | (551,970) | $ (551,970) | ||||
Other | 12,507 | 12,507 | ||||
Balance (shares) at May. 31, 2015 | 178,117 | 66,414 | ||||
Ending Balance at May. 31, 2015 | 1,932,455 | $ 329,248 | 157,183 | 4,227,620 | (8,471) | $ (2,773,125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 693,520 | 693,520 | ||||
Comprehensive income (loss), net of tax | (16,403) | (16,403) | ||||
Dividends | (115,273) | (115,273) | ||||
Stock-based compensation | 79,293 | 79,293 | ||||
Vesting of stock-based compensation awards (shares) | 605 | |||||
Vesting of stock-based compensation awards | 0 | $ 52,208 | (52,208) | |||
Stock options exercised, net of shares surrendered (shares) | 876 | |||||
Stock options exercised, net of shares surrendered | $ 28,226 | |||||
Stock options exercised, net of shares surrendered | 28,226 | |||||
Repurchase of common stock (shares) | (8,971) | |||||
Repurchase of common stock | (780,151) | $ (780,151) | ||||
Other | 20,992 | 20,992 | ||||
Balance (shares) at May. 31, 2016 | 179,598 | 75,385 | ||||
Ending Balance at May. 31, 2016 | $ 1,842,659 | $ 409,682 | $ 205,260 | $ 4,805,867 | $ (24,874) | $ (3,553,276) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 693,520 | $ 430,618 | $ 374,442 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 149,691 | 140,624 | 168,220 |
Amortization of intangible assets | 15,588 | 14,458 | 22,642 |
Stock-based compensation | 79,293 | 47,002 | 29,875 |
Gain on Storage transactions | (15,786) | (38,573) | 0 |
Loss (gain) on Shred-it | 24,288 | 3,851 | (108,441) |
Gain on sale of stock of an equity method investment | 0 | (21,739) | 0 |
Shredding Transaction asset impairment charge | 0 | 0 | 16,143 |
Shredding Transaction costs | 0 | 0 | 26,057 |
Deferred income taxes | (59,302) | 20,866 | 47,109 |
Change in current assets and liabilities, net of acquisitions of businesses: | |||
Accounts receivable, net | (52,762) | (1,443) | (56,231) |
Inventories, net | (17,917) | 23,785 | (11,062) |
Uniforms and other rental items in service | (6,306) | (31,994) | (11,435) |
Prepaid expenses and other current assets | (965) | (3,202) | (2,177) |
Accounts payable | (564) | (33,445) | 30,446 |
Accrued compensation and related liabilities | 13,512 | 3,234 | 10,931 |
Accrued liabilities and other | 22,714 | 33,066 | 54,237 |
Income taxes, current | (800) | (6,832) | 15,213 |
Net cash provided by operating activities | 465,845 | 580,276 | 605,969 |
Cash flows from investing activities: | |||
Capital expenditures | (275,385) | (217,720) | (145,580) |
Proceeds from redemption of marketable securities | 434,179 | 161,938 | 54,196 |
Purchase of marketable securities and investments | (494,146) | (195,471) | (63,858) |
Proceeds from Storage transactions, net of cash contributed | 35,338 | 158,428 | 0 |
Proceeds from Shredding transactions, net of cash contributed | 580,837 | 3,344 | 179,359 |
Proceeds from sale of stock of an equity method investment | 0 | 29,933 | 0 |
Dividends received on equity method investment | 0 | 5,247 | 0 |
Acquisitions of businesses, net of cash acquired | (156,579) | (15,495) | (33,441) |
Other | 4,137 | 1,383 | (5,219) |
Net cash provided by (used in) investing activities | 128,381 | 44,987 | (14,543) |
Cash flows from financing activities: | |||
Repayment of debt | (16) | (518) | (8,187) |
Proceeds from exercise of stock-based compensation awards | 28,226 | 40,230 | 41,902 |
Dividends paid | (115,273) | (201,891) | (93,320) |
Repurchase of common stock | (780,151) | (551,970) | (370,599) |
Other | 490 | 1,589 | 469 |
Net cash used in financing activities | (866,724) | (712,560) | (429,735) |
Effect of exchange rate changes on cash and cash equivalents | (5,218) | (8,918) | (676) |
Net (decrease) increase in cash and cash equivalents | (277,716) | (96,215) | 161,015 |
Cash and cash equivalents at beginning of year | 417,073 | 513,288 | 352,273 |
Cash and cash equivalents at end of year | 139,357 | 417,073 | 513,288 |
Shred-it Partnership | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on Storage transactions | (4,300) | ||
Gain on sale of stock of an equity method investment | (378,359) | 0 | 0 |
Shredding Transaction asset impairment charge | 16,100 | ||
Cash flows from investing activities: | |||
Proceeds from Shredding transactions, net of cash contributed | 578,300 | ||
Dividends received on equity method investment | $ 0 | $ 113,400 | $ 0 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Business description. Cintas Corporation (collectively with its majority-owned subsidiaries and any entities over which it has control, Cintas) helps more than 900,000 businesses of all types and sizes, primarily in North America, as well as Latin America, Europe and Asia, get Ready™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday™. U.S. Generally Accepted Accounting Principles (GAAP) requires companies to evaluate their reportable operating segments periodically and when certain events occur. As a result of a recent evaluation, effective June 1, 2015, Cintas realigned its organizational structure and updated its reportable operating segments in light of certain changes in its business, including the acquisition of ZEE Medical Inc. (ZEE) in the first quarter of fiscal 2016. Cintas’ updated reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies, carpet and tile cleaning services and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists primarily of Fire Protection Services and its Direct Sale business, is included in All Other. All prior fiscal year results presented in the table below have been recast to reflect these new operating segments. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for each of these reportable operating segments for the years ended May 31, 2016, 2015 and 2014 are presented in Note 14 entitled Operating Segment Information. The Company regularly reviews its operating segments for reporting purposes based on the information its chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance and makes changes when appropriate. Prior to June 1, 2015, Cintas classified its business into the following three reportable operating segments: the Rental Uniforms and Ancillary Products operating segment consisted of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning services were also provided within this operating segment. The Uniform Direct Sales operating segment consisted of the direct sale of uniforms and related items. The First Aid and Safety and Fire Protection Services operating segment consisted of first aid and safety products and services, and fire protection products and services. In fiscal 2014, Cintas completed its partnership transaction with the shareholders of Shred-it International Inc. to combine Cintas' shredding business (Shredding) with the shredding business of Shred-it International Inc. (the Shredding Transaction). Pursuant to the Shredding Transaction, the newly formed partnership (the Shred-it Partnership) was owned 42% by Cintas and 58% by the shareholders of Shred-it International Inc. Cintas' investment in the Shred-it Partnership (Shred-it) and the results of Shredding are classified as discontinued operations for all periods presented as a result of selling the investment during fiscal 2016. During fiscal 2015, Cintas sold the storage business (Storage) and, as a result, its operations are also classified as discontinued operations for all periods presented. Shredding and Storage were previously included in the former Document Management Services reportable operating segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets and discontinued operations, the results of Shredding and Storage have been excluded from both continuing operations and operating segment results for all periods presented. Please see Note 16 entitled Discontinued Operations for additional information. Principles of consolidation. The consolidated financial statements include the accounts of Cintas controlled majority-owned subsidiaries and any entities over which Cintas has control. Intercompany balances and transactions have been eliminated as appropriate. Financial statement presentation. We have reclassified certain prior-year amounts to conform to the current year’s presentation. Use of estimates. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Revenue recognition. Rental revenue, which is recorded in the Uniform Rental and Facility Services reportable operating segment, is recognized when services are performed. Other revenue, which is recorded in the First Aid and Safety Services reportable operating segment and All Other, is recognized when either services are performed or when products are shipped and the title and risks of ownership pass to the customer. Cost of uniform rental and facility services. 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. The Uniform Rental and Facility Services reportable operating segment inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution are included in the cost of uniform rental and facility services. Cost of other. Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, uniforms and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other includes inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution. Selling and administrative expenses. Selling and administrative expenses consist primarily of sales labor and commissions, management and administrative labor, payroll taxes, medical expense, insurance expense, legal and professional costs and amortization of finite-lived intangible assets. Cash and cash equivalents. Cintas considers all highly liquid domestic investments with a maturity of three months or less, at date of purchase, to be cash equivalents. At May 31, 2016 and 2015 , cash and cash equivalents includes $50.6 million and $43.0 million , respectively, of restricted cash used as collateral associated with the general insurance program. Marketable securities. Marketable securities are typically comprised of fixed income securities and are classified as available-for-sale. Accounts receivable. Accounts receivable is comprised of amounts owed through product shipments and services provided and is presented net of an allowance for doubtful accounts. The allowance is an estimate based on historical rates of collections and allowances for specific accounts identified as uncollectible. The allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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. When an account is considered uncollectible, it is written off against the allowance for doubtful accounts. Inventories. Inventories are valued at the lower of cost (first-in, first-out) or market. Cintas applies a commonly accepted practice of using inventory turns to apply variances between actual and standard costs to the inventory balances. The judgments and estimates used to calculate inventory turns will have an impact on the valuation of inventories at the lower of cost or market. Inventory is comprised of the following amounts: (In thousands) 2016 2015 Raw materials $ 17,794 $ 16,935 Work in process 14,731 17,079 Finished goods 216,837 192,197 $ 249,362 $ 226,211 Inventories are recorded net of reserves for obsolete inventory of $ 32.9 million and $ 30.7 million at May 31, 2016 and 2015 , respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. Uniforms and other rental items in service. These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory and related cost of uniforms and ancillary products that are presented in the consolidated financial statements. Property and equipment. Property and equipment is stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method primarily over the following estimated useful lives of the assets based on industry and Cintas specific experience, in years: Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 Investments. Investments consists primarily of the cash surrender value of life insurance policies and equity method investments. The equity method is used to account for an investment if our investment gives us the ability to exercise significant influence over the operating and financial policies of the investee. In general, equity method investments are initially measured at cost. However, an equity method investment resulting from a transaction in which a controlled group of assets that constitutes a business is deconsolidated is initially measured at fair value. Cintas recognizes its share of the investee’s earnings or losses in income. Cintas also adjusts its share of the investee's earnings for intra-entity transactions, basis differences, investee capital transactions and other comprehensive income through income or other comprehensive income as appropriate. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Long-lived assets. When events or circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated undiscounted future cash flows are compared to the carrying amount of the assets. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, an impairment loss is recorded based on the excess of the carrying amount of the assets over their respective fair values. Fair value is generally determined by discounted cash flows or based on prices of similar assets, as appropriate. Cintas did not identify any indicators of impairment for the years ended May 21, 2016, 2015 and 2014. Goodwill. Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment test, which may include an assessment of qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as strategies and financial performance. The test may also include the determination of the estimated fair value of Cintas' reporting units via comparisons to current market values, where available, and discounted cash flow analyses. Significant assumptions may include growth rates based on historical trends and margin improvement leveraged from such growth, as well as discount rates. We determine discount rates separately for each reporting unit using the weighted average cost of capital, which includes a calculation of cost of equity, which is developed using the capital asset pricing model and comparable company betas (a measure of systemic risk), and cost of debt. We also use comparable market earnings multiple data and our market capitalization to corroborate our reporting unit valuations. We test for goodwill impairment at the reporting unit level. As a result of Cintas’ operating segment realignment, the composition of Cintas’ reporting units for the evaluation of goodwill impairment has changed. Historically, Cintas’ reporting units were the same as the reportable operating segments, Rental Uniforms and Ancillary Products, Uniform Direct Sales and First Aid, Safety and Fire Protection Services. Effective June 1, 2015, Cintas identified five reporting units for purposes of evaluating goodwill impairment, Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other. As a result of the change in reporting units, Cintas was required to perform an interim impairment test on goodwill at June 1, 2015. Based on the results of this test and the annual impairment tests, Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2016 , 2015 or 2014 . Cintas will continue to perform impairment tests as of March 1 in future years and when indicators of impairment exist. Service contracts and other assets. Service contracts and other assets, which consist primarily of noncompete and consulting agreements obtained through acquisitions of businesses, are amortized by use of the straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years. Certain noncompete agreements, as well as all service contracts, require that a valuation be determined using a discounted cash flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. No impairment has been recognized by Cintas for the fiscal years ended May 31, 2016 , 2015 or 2014 . Accrued liabilities. Current accrued liabilities are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Current accrued liabilities include the following amounts: (In thousands) 2016 2015 General insurance liabilities $ 128,759 $ 113,714 Employee benefit related liabilities 75,587 68,907 Taxes and related liabilities 5,783 6,064 Accrued interest 26,682 26,628 Other 112,254 94,622 $ 349,065 $ 309,935 General insurance liabilities represent the estimated ultimate cost of all asserted and unasserted claims incurred, primarily related to worker's compensation, auto liability and other general liability exposure through the consolidated balance sheet dates. Our reserves are estimated through actuarial procedures of the insurance industry and by using industry assumptions, adjusted for specific expectations based on our claims history. Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other environmental factors in the period in which it becomes known. These changes in estimates may be material to the consolidated financial statements. Long-term accrued liabilities consists primarily of reserves associated with unrecognized tax benefits, which are described in more detail in Note 8 entitled Income Taxes, and retirement obligations, which are described in more detail in Note 10 entitled Defined Contribution Plans. Stock-based compensation. Compensation expense is recognized for all share-based payments to employees, including stock options and restricted stock awards, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Measured compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. Derivatives and hedging activities. Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Derivatives are recorded at fair value on the consolidated balance sheet, and gains and losses are recorded as adjustments to income or other comprehensive income, as appropriate. Income taxes. Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. See Note 8 entitled Income Taxes for the types of items that give rise to significant deferred income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes. Cintas regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Accounting for uncertain tax positions requires the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Cintas is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, Cintas records reserves as deemed appropriate. Based on Cintas' evaluation of current tax positions, Cintas believes its tax related accruals are appropriate. Litigation and other contingencies. Cintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. 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 or consolidated results of operations of Cintas. Fair value measurements. Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. It also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Cintas' assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. In order to meet the requirements of ASC 820, Cintas utilizes two basic valuation approaches to determine the fair value of its assets and liabilities required to be recorded on a recurring basis at fair value. The first approach is the cost approach. The cost approach is generally the value a market participant would expect to replace the respective asset or liability. The second approach is the market approach. The market approach looks at what a market participant would consider valuing an exact or similar asset or liability to that of Cintas, including those traded on exchanges. Cintas' non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis primarily relate to assets and liabilities acquired in a business acquisition unless otherwise noted in Note 2 entitled Fair Value Disclosures. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis (including business acquisitions). Based on the nature of Cintas' business acquisitions, which occur regularly throughout the fiscal year, the majority of the assets acquired and liabilities assumed consist of working capital, primarily valued using Level 2 inputs, property and equipment, also primarily valued using Level 2 inputs and goodwill and other identified intangible assets valued using Level 3 inputs. In general, non-recurring fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows and company specific discount rates. New accounting pronouncements. In February 2013, the FASB issued Accounting Standards Update (ASU) 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." ASU 2013-02 requires an entity to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income if the item reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For reclassification items not required under GAAP to be reclassified directly to net income in their entirety in the same reporting period, an entity is required to cross-reference to other disclosures currently required under GAAP that provide additional detail about those amounts. The Company adopted ASU 2013-02 effective June 1, 2013. See Note 13 entitled Accumulated Other Comprehensive Income (Loss) for details of required disclosure. In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended accounting guidance related to the reporting of discontinued operations and disclosures of disposals of components of an entity. The amended guidance changes the thresholds for disposals to qualify as discontinued operations and requires additional disclosures. This guidance is effective for reporting periods beginning after December 15, 2014 and is required to be applied prospectively. Cintas adopted ASU 2014-08 during the quarter ended August 31, 2015 and applied the amended accounting guidance to Shred-it and will apply it to future transactions, as appropriate. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," to clarify revenue recognition principles. This guidance is intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. This guidance will be effective for reporting periods beginning after December 15, 2017 and will be required to be applied retrospectively. Early application of the amendments in this update is not permitted. Cintas is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-17, “Balance Sheet Classifications of Deferred Taxes,” which amended accounting guidance related to the presentation of deferred tax liabilities and assets. The amended guidance requires that all deferred tax liabilities and assets be classified as noncurrent on the balance sheet. This guidance is effective for reporting periods beginning after December 15, 2016; however, early adoption is permitted. This guidance can also be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Cintas adopted ASU 2015-17 during the quarter ended November 30, 2015 and has applied this amended accounting guidance to its deferred tax liabilities and assets for all periods presented. The impact of this change in accounting principle on balances previously reported as of May 31, 2015 was a reclassification of $112.4 million from current liabilities to long term liabilities. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Topic 842 supersedes the previous leases standard, ASC 840, Leases.This guidance is effective for reporting periods beginning after December 15, 2018; however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Cintas is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 is intended to simplify accounting for share-based payments. Upon adoption, ASU 2016-09 will require that excess tax benefits for share-based payments be recorded as a reduction of income tax expense and reflected within operating cash flows rather than being recorded within equity and reflected within financing cash flows. The standard also permits the repurchase of more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. This update is effective for interim and annual periods beginning after December 15, 2016; however, early adoption is permitted. The Company is currently assessing the effect that adoption of ASU 2016-09 will have on its consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the Consolidated Financial Statements. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
May 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures All financial instruments that are measured at fair value on a recurring basis (at least annually) have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below: As of May 31, 2016 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 139,357 $ — $ — $ 139,357 Marketable securities: Canadian treasury securities — 70,405 — 70,405 Total assets at fair value $ 139,357 $ 70,405 $ — $ 209,762 Long term accrued liabilities: Interest rate lock agreement $ — $ 19,628 $ — $ 19,628 Total liabilities at fair value $ — $ 19,628 $ — $ 19,628 As of May 31, 2015 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 417,073 $ — $ — $ 417,073 Marketable securities: Canadian treasury securities — 16,081 — 16,081 Total assets at fair value $ 417,073 $ 16,081 $ — $ 433,154 Cintas' cash and cash equivalents and marketable securities are generally classified within Level 1 or Level 2 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets, and financial instruments classified as Level 2 are based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments. The types of financial instruments Cintas classifies within Level 2 are primarily high grade domestic commercial paper and Canadian treasury securities (federal). The valuation technique used for Cintas’ marketable securities classified within Level 2 of the fair value hierarchy is primarily the market approach. The primary inputs to value Cintas’ marketable securities is the respective instrument's future cash flows based on its stated yield and the amount a market participant would pay for a similar instrument. Primarily all of Cintas’ marketable securities are actively traded and the recorded fair value reflects current market conditions. However, due to the inherent volatility in the investment market, there is at least a possibility that recorded investment values may change in the near term. The funds invested in Canadian treasury securities are not presently expected to be repatriated, but instead are expected to be invested indefinitely in foreign subsidiaries. Interest, realized gains and losses and declines in value determined to be other than temporary on available-for-sale securities are included in interest income or expense. The cost of the securities sold is based on the specific identification method. The amortized cost basis of marketable securities as of May 31, 2016 and 2015 was $70.4 million and $16.1 million , respectively. Purchases of marketable securities were $ 488.8 million , $ 179.2 million and $ 48.5 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. All outstanding marketable securities as of May 31, 2016 and 2015 had contractual maturities due within one year. As of May 31, 2016, long-term accrued liabilities include interest rate lock agreements. The fair value 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. All other amounts included in long-term liabilities are not recorded at fair value. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated balance sheet date. In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis as required under GAAP. The Company's acquisition of ZEE was recorded at fair value. See Note 9 entitled Acquisitions and Divestitures for additional information on the measurement of the ZEE assets acquired and liabilities assumed. |
Property and Equipment
Property and Equipment | 12 Months Ended |
May 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment (In thousands) 2016 2015 Land $ 117,881 $ 116,172 Buildings and improvements 509,316 501,742 Equipment 1,584,478 1,446,041 Leasehold improvements 28,530 26,023 Construction in progress 173,367 104,300 2,413,572 2,194,278 Less: accumulated depreciation 1,419,335 1,322,857 $ 994,237 $ 871,421 Interest expense is net of capitalized interest of $1.1 million and $0.6 million for the fiscal years ended May 31, 2016 and 2015 , respectively. Interest was not capitalized during the fiscal year ended May 31, 2014. |
Investments
Investments | 12 Months Ended |
May 31, 2016 | |
Investments [Abstract] | |
Investments | Investments Investments at May 31, 2016 of $125.0 million include the cash surrender value of insurance policies of $108.1 million , equity method investments of $14.5 million and cost method investments of $2.4 million . Investments at May 31, 2015 of $329.7 million include the cash surrender value of insurance policies of $101.8 million , equity method investments of $225.7 million and cost method investments of $2.2 million . Shred-it is classified as discontinued operations for all periods presented as a result of selling the investment during fiscal 2016. As allowed under applicable accounting guidance, the May 31, 2015 consolidated balance sheet amounts for these assets and liabilities remain in their natural classifications. See Note 16 entitled Discontinued Operations for additional information. During fiscal 2015, Cintas sold stock in an equity method investment. In conjunction with the sale of the equity method investment, Cintas also received a cash dividend of $5.2 million . Total cash received from the transaction was $35.2 million . The sale resulted in the recording of a gain, net of tax, of approximately $13.6 million in the fiscal year ended May 31, 2015. As a result, the Company no longer has the ability to exercise significant influence over the investee. Therefore, effective July 1, 2014, the remaining investment retained by Cintas is accounted for under the cost method. Investments are evaluated for impairment on an annual basis or when indicators of impairment exist. For fiscal years 2016 , 2015 and 2014 , no losses due to impairment were recorded. |
Goodwill, Service Contracts and
Goodwill, Service Contracts and Other Assets | 12 Months Ended |
May 31, 2016 | |
Goodwill, Service Contracts and Other Assets [Abstract] | |
Goodwill, Service Contracts and Other Assets | Goodwill, Service Contracts and Other Assets In fiscal 2014, Storage was classified as discontinued operations. As a result, goodwill and service contracts related to this business, which were previously included in the former Document Management Services operating segment, are included within Corporate. Storage was sold in three separate transactions during fiscal 2014. See Note 16 entitled Discontinued Operations for more information. Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2015 , by historical reportable operating segment, are as follows: Goodwill (in thousands) Rental Uniforms & Ancillary Products Uniform Direct Sales First Aid, Safety & Fire Protection Corporate Total Balance as of June 1, 2014 $ 943,516 $ 23,905 $ 221,911 $ 78,079 $ 1,267,411 Goodwill acquired 70 — 8,578 — 8,648 Goodwill divested in Storage Transactions — — — (75,660 ) (75,660 ) Foreign currency translation (2,141 ) (227 ) — (2,419 ) (4,787 ) Balance as of May 31, 2015 $ 941,445 $ 23,678 $ 230,489 $ — $ 1,195,612 Service Contracts (in thousands) Rental Uniforms & Ancillary Products Uniform Direct Sales First Aid, Safety & Fire Protection Corporate Total Balance as of June 1, 2014 $ 17,171 $ — $ 28,034 $ 10,470 $ 55,675 Service contracts acquired 313 — 9,543 265 10,121 Service contracts divested in Storage Transactions — — — (9,570 ) (9,570 ) Service contracts amortization (5,619 ) — (7,005 ) (597 ) (13,221 ) Foreign currency translation (3 ) — — (568 ) (571 ) Balance as of May 31, 2015 $ 11,862 $ — $ 30,572 $ — $ 42,434 Effective June 1, 2015, Cintas realigned its organizational structure and updated its reportable operating segments in light of certain changes in its business, including the acquisition of ZEE. Cintas’ updated reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The remainder of Cintas’ business, which consists primarily of Fire Protection Services and its Direct Sale business, are included in All Other. For additional information regarding Cintas’ realignment and reportable operating segment determination, see Note 14 entitled Operating Segment Information. As a result of Cintas’ operating segment realignment, the composition of Cintas’ reporting units for the evaluation of goodwill impairment also changed. Historically, Cintas’ reporting units were the same as the reportable operating segments, Rental Uniforms and Ancillary Products, Uniform Direct Sales and First Aid, Safety and Fire Protection Services. Effective June 1, 2015, Cintas identified five reporting units for purposes of evaluating goodwill impairment, which were Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other. As the composition of the reporting units changed, the Company allocated historical goodwill to the new reporting units based on a relative fair value allocation approach. Fair value of each reporting unit was determined using a combination of the market approach and the income approach. Under the market approach, fair value is based on revenue and earnings multiples for guideline public companies in the reporting unit's peer group. Under the income approach, value is dependent on the present value of net cash flows to be derived from the ownership. The relative fair value allocation approach yielded the following allocation of total goodwill as of June 1, 2015: Uniform Rental and Facility Services reportable operating segment goodwill of $943.9 million , First Aid and Safety Services reportable operating segment goodwill of $155.0 million and All Other goodwill of $96.7 million . The following table illustrates the changes in Goodwill as a result of the segment realignment: Goodwill Allocation as of June 1, 2015 (in thousands) Total Uniform Rental and Facility Services Rental Uniforms and Ancillary Products segment goodwill reassigned $ 929.4 Uniform Direct Sales segment goodwill reassigned 14.5 $ 943.9 First Aid and Safety Services First Aid, Safety and Fire Protection segment goodwill reassigned $ 155.0 All Other First Aid, Safety and Fire Protection segment goodwill reassigned $ 75.5 Rental Uniforms and Ancillary Products segment goodwill reassigned 12.0 Uniform Direct Sales segment goodwill reassigned 9.2 $ 96.7 As a result of the change in reporting units, Cintas was required to perform an interim impairment test on goodwill at June 1, 2015. There was no impairment recorded as a result of the interim impairment test. Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2016, by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance at June 1, 2015 $ 943,909 $ 154,954 $ 96,749 1,195,612 Goodwill acquired 10,020 86,874 203 97,097 Foreign currency translation (713 ) (380 ) (23 ) (1,116 ) Balance as of May 31, 2016 $ 953,216 $ 241,448 $ 96,929 $ 1,291,593 Service Contracts (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance at June 1, 2015 $ 6,677 $ 1,576 $ 34,181 $ 42,434 Service contracts acquired 18,912 34,052 2,730 55,694 Service contracts amortization (4,398 ) (3,355 ) (6,639 ) (14,392 ) Foreign currency translation — (21 ) — (21 ) Balance as of May 31, 2016 $ 21,191 $ 32,252 $ 30,272 $ 83,715 Information regarding Cintas' service contracts and other assets is as follows: As of May 31, 2016 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 395,482 $ 311,767 $ 83,715 Noncompete and consulting agreements $ 42,378 $ 40,928 $ 1,450 Other 27,943 9,532 18,411 Total $ 70,321 $ 50,460 $ 19,861 As of May 31, 2015 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 340,816 $ 298,382 $ 42,434 Noncompete and consulting agreements $ 41,828 $ 40,379 $ 1,449 Other 23,595 7,550 16,045 Total $ 65,423 $ 47,929 $ 17,494 Amortization expense for continuing operations was $ 15.6 million , $ 13.7 million and $ 15.2 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Estimated amortization expense for continuing operations, excluding any future acquisitions, for each of the next five years is $ 13.8 million, $ 12.3 million, $ 11.7 million, $ 11.3 million and $ 9.4 million, respectively. |
Long-Term Debt and Derivatives
Long-Term Debt and Derivatives | 12 Months Ended |
May 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Derivatives | Long-Term Debt and Derivatives (In thousands) 2016 2015 Unsecured term notes due through 2036 at an average rate of 4.6% $ 1,300,000 $ 1,300,000 Less: amounts due within one year 250,000 — $ 1,050,000 $ 1,300,000 Cintas' senior notes are recorded at cost. The fair value of the senior notes is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' long-term debt as of May 31, 2016 were $ 1,300.0 million and $ 1,416.6 million , respectively, and as of May 31, 2015 were $ 1,300.0 million and $ 1,418.6 million , respectively. Letters of credit outstanding were $ 83.4 million and $ 82.7 million at May 31, 2016 and 2015 , respectively. Maturities of long-term debt during each of the next five years are $250.0 million , $ 300.0 million , $0 , $0 and $0 , respectively. Interest paid was $ 64.5 million , $ 65.3 million and $ 65.9 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Cintas' commercial paper program has a capacity of $300.0 million at May 31, 2016, that is fully supported by a backup revolving credit facility through a credit agreement with its banking group. This revolving credit facility has an accordion feature that allows for a maximum borrowing capacity of $450.0 million . The revolving credit facility was amended on May 29, 2014, to extend the maturity date from October 6, 2016 to May 28, 2019, and to adjust the applicable margin used to calculate the interest payable on any outstanding loans and the facility fee payable under the agreement. On June 23, 2016, the revolving credit facility was amended to extend the maturity date from May 28, 2019 to June 22, 2021, increase the capacity to $450.0 million , and add an accordion feature that allows for a maximum borrowing capacity of $600.0 million . No commercial paper or borrowings on our revolving credit facility were outstanding at May 31, 2016 or 2015 . On June 1, 2016, Cintas paid the $250.0 million 5 -year senior notes that matured on that date with cash and $218.5 million proceeds from the issuance of commercial paper. Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2008, fiscal 2011 and fiscal 2013. The amortization of the cash flow hedges resulted in an increase to other comprehensive income of $ 2.0 million in each of the fiscal years ended May 31, 2016 , 2015 and 2014 . During the third quarter of fiscal 2016, Cintas entered into an interest rate lock agreement with a notional value of $550.0 million for a forecasted debt issuance. As of May 31, 2016 , the fair value of this treasury lock was $19.6 million and is recorded in long-term liabilities and other comprehensive income, net of tax. The interest rate lock had no impact on net income or cash flows from continuing operations for fiscal 2016. To hedge the exposure of movements in the foreign currency rates, Cintas may use foreign currency hedges. These hedges reduce the impact on cash flows from movements in the foreign currency exchange rates. Examples of foreign currency hedge instruments that Cintas may use are average rate options and forward contracts. These instruments did not impact foreign currency exchange during fiscal 2016 , 2015 or 2014 . Cintas had no foreign currency forward contracts as of May 31, 2016 or 2015 . 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. Cintas was in compliance with all of the debt covenants for all periods presented. 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. |
Leases
Leases | 12 Months Ended |
May 31, 2016 | |
Leases [Abstract] | |
Leases | Leases Cintas conducts certain operations from leased facilities and leases certain equipment. Most leases contain renewal options for periods from 1 to 10 years. The lease agreements provide for increases in rent expense if the options are exercised based on increases in certain price level factors or other prearranged factors. Step rent provisions, escalation clauses, capital improvements funding and other lease concessions are taken into account in computing minimum lease payments. Minimum lease payments are recognized on a straight-line basis over the minimum lease term. Lease payments are not dependent on an existing index or rate and are not included in minimum lease payments. It is anticipated that expiring leases will be renewed or replaced. The minimum rental payments under noncancelable lease arrangements for each of the next five years and thereafter are $ 30.5 million , $ 26.8 million , $ 20.8 million , $ 16.5 million , $ 12.5 million and $ 26.9 million , respectively. Rent expense for continuing operations under operating leases during the fiscal years ended May 31, 2016 , 2015 and 2014 , was $ 41.5 million , $ 34.9 million and $ 32.3 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes (In thousands) 2016 2015 2014 Income before income taxes for continuing operations consists of the following components: U.S. operations $ 697,974 $ 635,270 $ 519,386 Foreign operations 20,148 18,054 17,741 $ 718,122 $ 653,324 $ 537,127 (In thousands) 2016 2015 2014 Income tax expense for continuing operations consists of the following components: Current: Federal $ 284,046 $ 203,202 $ 139,102 State and local 25,926 25,346 18,286 309,972 228,548 157,388 Deferred (48,791 ) 14,255 41,967 $ 261,181 $ 242,803 $ 199,355 (In thousands) 2016 2015 2014 Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows: Income taxes at the U.S. federal statutory rate $ 251,352 $ 228,727 $ 187,375 State and local income taxes, net of federal benefit 16,672 16,705 17,934 Other (6,843 ) (2,629 ) (5,954 ) $ 261,181 $ 242,803 $ 199,355 The components of deferred income taxes included on the consolidated balance sheets are as follows: (In thousands) 2016 2015 Deferred tax assets: Allowance for doubtful accounts $ 7,416 $ 4,857 Inventory obsolescence 13,702 12,266 Insurance and contingencies 42,717 38,522 Stock-based compensation 45,720 29,910 Foreign related carry-forwards 17,883 16,862 Treasury locks 12,055 5,829 Other 8,100 9,461 147,593 117,707 Valuation allowance (17,047 ) (14,690 ) 130,546 103,017 Deferred tax liabilities: In service inventory 172,704 169,629 Property 93,784 77,871 Intangibles 104,585 84,218 Investment in partnerships 2,563 86,098 State taxes and other 16,385 24,528 390,021 442,344 Net deferred tax liability $ 259,475 $ 339,327 Due to differences in accounting for the book and tax basis in Shred-it and other partnerships, a deferred tax liability was recorded. After the sale of Shred-it in fiscal 2016, the related deferred tax liability was reclassified to current taxes payable. See Note 16 entitled Discontinued Operations for additional information. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, net of valuation allowances, will be realized. The progression of the valuation allowance is as follows: (In thousands) 2016 2015 Balance at beginning of year $ (14,690 ) $ (13,358 ) Additions (3,437 ) (2,433 ) Subtractions 1,080 1,101 Balance at end of year $ (17,047 ) $ (14,690 ) Income taxes paid were $ 452.6 million , $ 236.7 million and $ 172.5 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Undistributed earnings of foreign subsidiaries were approximately $ 117.2 million , $ 147.1 million and $ 172.7 million as of May 31, 2016 , 2015 and 2014 , respectively, for which deferred taxes have not been provided. Such earnings are considered to be permanently reinvested in Cintas' foreign subsidiaries. If such earnings were repatriated, additional tax expense may result. The current calculation of such additional taxes is not practicable. As of May 31, 2016 and 2015 , there was $ 12.9 million and $ 11.9 million , respectively, in total unrecognized tax benefits, which, if recognized, would favorably impact Cintas' effective tax rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of these items in prior reporting periods. The total amount accrued for interest and penalties as of May 31, 2016 and 2015 , was $ 1.1 million and $ 0.9 million , respectively. Cintas records this tax liability as current and long-term accrued liabilities on the consolidated balance sheets, as appropriate. 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. Unrecognized tax benefits increased in fiscal 2016 and 2015 by $ 0.8 million and $ 1.4 million , respectively, and decreased in fiscal 2014 by $ 0.2 million . Accrued interest increased by $0.2 million in both fiscal 2016 and 2015 , and decreased by $0.4 million in fiscal 2014 . A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows: (In thousands) Balance at June 1, 2013 $ 13,709 Additions for tax positions of prior years 2,586 Settlements (1,270 ) Statute expirations (1,963 ) Balance at May 31, 2014 $ 13,062 Additions for tax positions of prior years 4,001 Settlements (48 ) Statute expirations (1,603 ) Balance at May 31, 2015 $ 15,412 Additions for tax positions of prior years 3,259 Settlements (48 ) Statute expirations (2,092 ) Balance at May 31, 2016 $ 16,531 On September 13, 2013, the U.S. Department of the Treasury and the Internal Revenue Service released final tangible property regulations under Sections 162(a) and 263(a) of the Internal Revenue Code regarding amounts paid to improve tangible property and acquire or produce tangible property, as well as proposed regulations regarding the disposition of property. The effective date of the final regulations was for Cintas' fiscal year ending May 31, 2015, and there was not a material impact on the consolidated financial statements for any period presented. The majority of Cintas' operations are in North America. Cintas is required to file federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of operation in any given period. All U.S. federal income tax returns are closed to audit through fiscal 2011. Cintas is currently in advanced stages of various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2009. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits will decrease by $3.1 million for the fiscal year ending May 31, 2017 . |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
May 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions The purchase price paid for each acquisition has been allocated to the fair value of the assets acquired and liabilities assumed. During fiscal 2016 , Cintas acquired two businesses included in the Uniform Rental and Facility Services reportable operating segment, two businesses included in the First Aid and Safety Services reportable operating segment and six businesses included in All Other. During fiscal 2015 , Cintas acquired one business included in the Uniform Rental and Facility Services reportable operating segment, three businesses included in the First Aid and Safety Services reportable operating segment and eight businesses included in All Other. The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired: (In thousands) 2016 2015 Fair value of tangible assets acquired $ 26,759 $ 177 Fair value of service contracts acquired 55,694 9,856 Fair value of other intangibles acquired 4,639 945 Net goodwill recognized 97,097 8,648 Total fair value of assets acquired 184,189 19,626 Fair value of liabilities assumed and incurred 27,610 4,131 Total cash paid for acquisitions $ 156,579 $ 15,495 On August 1, 2015, the Company acquired all of the shares of ZEE for acquisition-date fair value consideration of $134.0 million , consisting of cash of $120.6 million and contingent consideration, subject to certain holdback provisions of $13.4 million . ZEE operates within the First Aid and Safety Services reportable operating segment. This acquisition has expanded our footprint in van delivered first aid, safety, training and emergency products and will allow us to serve an even greater number of customers in North America. The table below summarizes the preliminary purchase price allocation of ZEE as determined by management with the assistance of third-party valuation specialists. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. None of the goodwill is deductible for income tax purposes. The assets acquired and liabilities assumed are valued at the estimated fair value at the acquisition date as required by GAAP. Assets: Cash and cash equivalents $ 333 Accounts receivable 16,705 Inventory 5,987 Other current assets 1,443 Property, plant and equipment 849 Goodwill 86,392 Service contracts 34,000 Other intagibles 4,500 Liabilities: Accounts payable (7,195 ) Accrued liabilities (4,428 ) Deferred income taxes (4,586 ) Total consideration $ 134,000 The estimated useful life of the acquired service contracts is 10 years. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including business acquisitions). The working capital assets and liabilities, as well as the property and equipment acquired, were valued using Level 2 inputs which included data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets (market approach). Goodwill, service contracts and other intangibles were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flow using a discount rate of 11% (income approach). The results of operations of ZEE are not material to the consolidated financial statements. The results of operations for the acquired businesses are included in the consolidated statements of income from the dates of acquisition. The proforma revenue, net income and earnings per share information relating to acquired businesses are not presented because they are not significant to Cintas. Divestitures In fiscal 2014, Cintas completed the Shredding Transaction with Shred-it International, Inc. to combine Cintas’ Shredding with Shred-it International Inc.’s shredding business and created the Shred-it Partnership. In fiscal 2016, Cintas sold Shred-it. In fiscal 2015, Cintas sold Storage. Storage, excluding related real estate owned by Cintas, was sold in three separate transactions to three separate buyers. In fiscal 2016, Cintas sold the remaining Storage assets classified as held for sale. Both Shredding and Storage were previously included in the former Document Management Services operating segment. As a result of the transactions noted above, the results from Shredding, Shred-it and Storage are reported under discontinued operations for all periods presented and are excluded from continuing operations and from operating segment results for all periods presented. See Note 16 entitled Discontinued Operations for additional information. |
Defined Contribution Plans
Defined Contribution Plans | 12 Months Ended |
May 31, 2016 | |
Defined Contribution Plans [Abstract] | |
Defined Contribution Plans | Defined Contribution Plans Cintas' Partners' Plan (the Plan) is a non-contributory profit sharing plan and Employee Stock Ownership Plan (ESOP) for the benefit of substantially all U.S. Cintas employee-partners who have completed one year of service. The Plan also includes a 401(k) savings feature covering substantially all U.S. employee-partners. The amounts of contributions to the Plan and ESOP, as well as the matching contribution to the 401(k), are made at the discretion of the Board of Directors. Total contributions, including Cintas' matching contributions, which approximate cost, were $ 43.1 million , $ 38.4 million and $ 33.7 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Cintas has a non-contributory deferred profit sharing plan (DPSP), which covers substantially all Canadian employee-partners. In addition, a registered retirement savings plan (RRSP) is offered to those employees. The amounts of contributions to the DPSP, as well as the matching contribution to the RRSP, are made at the discretion of the Board of Directors. Total contributions, which approximate cost, were $ 1.6 million , $ 1.5 million and $ 1.6 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Cintas has a supplemental executive retirement plan (SERP) subject to Section 409A of the Internal Revenue Code for the benefit of certain highly compensated Cintas employee-partners. The SERP allows participants to defer the receipt of compensation which would otherwise become payable to them. Matching contributions are made at the discretion of the Board of Directors. Total matching contributions were $ 6.6 million , $ 6.1 million and $ 6.0 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. |
Earnings per Share
Earnings per Share | 12 Months Ended |
May 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas' common shares: (In thousands except per share data) 2016 2015 2014 Basic Earnings per Share from Continuing Operations Income from continuing operations $ 456,941 $ 410,521 $ 337,772 Less: income from continuing operations allocated to participating securities 7,405 3,900 3,082 Income from continuing operations available to common shareholders $ 449,536 $ 406,621 $ 334,690 Basic weighted average common shares outstanding 108,221 115,900 120,377 Basic earnings per share from continuing operations $ 4.15 $ 3.51 $ 2.78 (In thousands except per share data) 2016 2015 2014 Diluted Earnings per Share from Continuing Operations Income from continuing operations $ 456,941 $ 410,521 $ 337,772 Less: income from continuing operations allocated to participating securities 7,405 3,900 3,082 Income from continuing operations available to common shareholders $ 449,536 $ 406,621 $ 334,690 Basic weighted average common shares outstanding 108,221 115,900 120,377 Effect of dilutive securities – employee stock options 1,735 1,643 1,263 Diluted weighted average common shares outstanding 109,956 117,543 121,640 Diluted earnings per share from continuing operations $ 4.09 $ 3.46 $ 2.75 Basic and diluted earnings per share from discontinued operations was calculated using the two-class method. Basic earnings per share from discontinued operations were $2.15 , $0.17 and $0.30 for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Diluted earnings per share from discontinued operations were $2.12 , $0.17 and $0.30 for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. For the fiscal years ended May 31, 2016 , 2015 and 2014 , options granted to purchase 0.5 million , 0.6 million and 0.7 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 shares (anti-dilutive). On July 30, 2013, Cintas announced that the Board of Directors authorized a $500.0 million share buyback program. This program was completed in February 2015. On January 13, 2015, we announced that the Board of Directors authorized a $500.0 million share buyback program. This program was completed in September 2015. On August 4, 2015, we announced that the Board of Directors authorized a new $500.0 million share buyback program. The following table summarizes the buyback activity by program and fiscal period: (In thousands except per share data) 2016 2015 Buyback Program Shares Avg. Price per Share Purchase Price Shares Avg. Price per Share Purchase Price July 30, 2013 — $ — $ — 3,981 $ 75.49 $ 300,500 January 13, 2015 3,078 $ 85.44 $ 262,928 2,870 $ 82.60 $ 237,072 August 4, 2015 5,649 $ 87.85 $ 496,309 — $ — $ — 8,727 $ 87.00 $ 759,237 6,851 $ 78.47 $ 537,572 In June 2016, we purchased 0.1 million shares at an average price of $94.09 per share for a total purchase price of $3.7 million . This completed the August 4, 2015 program through which Cintas purchased a total of 5.7 million shares of Cintas common stock at an average price of $87.89 per share for a total purchase price of $500.0 million . In addition to the buyback program, Cintas acquired shares of Cintas common stock in satisfaction of employee payroll taxes due on restricted stock awards that vested during the fiscal year. For the fiscal year ended May 31, 2016 , Cintas acquired 0.2 million shares at an average price of $86.07 per share for a total purchase price of $20.9 million . For the fiscal year ended May 31, 2015 , Cintas acquired 0.2 million shares at an average price of $64.58 per share for a total purchase price of $14.4 million . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
May 31, 2016 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Under Cintas' 2005 Equity Compensation Plan, as amended, (the 2005 Equity Compensation Plan) Cintas may grant officers and key employee-partners equity compensation in the form of stock options, stock appreciation rights, restricted and unrestricted stock awards, performance awards and other stock unit awards up to an aggregate of 21,000,000 shares of Cintas' common stock. At May 31, 2016 , 7,174,600 shares of common stock are reserved for future issuance under the 2005 Equity Compensation Plan. Total compensation cost for stock-based awards for continuing operations was $79.3 million , $44.9 million and $27.5 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements for continuing operations was $ 28.9 million , $ 16.7 million and $ 10.2 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. Stock Options Stock options are granted at the fair market value of the underlying common stock on the date of grant. The option terms are determined by the Compensation Committee of the Board of Directors, but no stock option may be exercised later than 10 years after the date of the grant. The option awards generally have 10 -year terms with graded vesting in years 3 through 5 based on continuous service during that period. Cintas recognizes compensation expense for these options using the straight-line recognition method over the vesting period. The fair value of options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: 2016 2015 2014 Risk-free interest rate 2.0 % 2.0 % 2.0 % Dividend yield 1.4 % 1.6 % 1.7 % Expected volatility of Cintas' common stock 23.3 % 28.0 % 28.0 % Expected life of the option in years 7.5 7.5 7.5 The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The determination of expected volatility is based on historical volatility of Cintas' common stock over the period commensurate with the expected term of stock options, as well as other relevant factors. The weighted average expected term was determined based on the historical employee exercise behavior of the options. The weighted-average fair value of stock options granted during fiscal 2016 , 2015 and 2014 was $ 21.60 , $ 20.64 and $ 16.63 , respectively. The information presented in the following table relates primarily to stock options granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans: Shares Weighted Average Exercise Price Outstanding, June 1, 2013 (1,815,795 shares exercisable) 7,885,638 $ 37.60 Granted 2,111,649 61.04 Canceled (699,314 ) 42.42 Exercised (1,272,179 ) 39.03 Outstanding, May 31, 2014 (1,583,413 shares exercisable) 8,025,794 43.12 Granted 1,590,185 84.59 Canceled (486,720 ) 55.50 Exercised (1,293,689 ) 38.11 Outstanding, May 31, 2015 (1,426,550 shares exercisable) 7,835,570 51.59 Granted 1,739,767 93.55 Canceled (235,455 ) 60.01 Exercised (919,975 ) 35.07 Outstanding, May 31, 2016 (1,649,236 shares exercisable) 8,419,907 $ 61.83 The intrinsic value of stock options exercised was $48.5 million , $44.3 million and $19.8 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. The total cash received from employees as a result of employee stock option exercises for the fiscal years ended May 31, 2016 , 2015 and 2014 was $ 28.2 million , $40.2 million and $41.9 million , respectively. The fair value of stock options vested was $ 11.0 million , $ 10.9 million and $ 17.7 million for the fiscal years ended May 31, 2016 , 2015 and 2014 , respectively. The following table summarizes the information related to stock options outstanding at May 31, 2016 : Outstanding Options Exercisable Options Range of Exercise Prices Number Outstanding Average Remaining Option Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 20.29 – $ 37.75 1,555,054 4.44 $ 31.22 1,122,463 $ 29.87 37.76 – 47.22 2,105,731 6.33 42.33 437,534 39.91 47.23 – 86.09 1,824,303 8.17 64.90 89,239 62.96 86.10 – 95.09 2,934,819 9.58 90.54 — — $ 20.29 – $ 95.09 8,419,907 7.51 $ 61.83 1,649,236 $ 34.32 At May 31, 2016 , the aggregate intrinsic value of stock options outstanding and exercisable was $ 276.5 million and $ 99.7 million , respectively. The weighted-average remaining contractual term of stock options exercisable is 4.7 years. Restricted Stock Awards Restricted stock awards consist of Cintas' common stock that is subject to such conditions, restrictions and limitations as the Compensation Committee of the Board of Directors determines to be appropriate. The vesting period is generally three years after the grant date. The recipient of restricted stock awards will have all rights of a shareholder of Cintas, including the right to vote and the right to receive cash dividends, during the vesting period. Cintas recognizes compensation expense for these restricted stock awards using the straight-line recognition method over the vesting period. The information presented in the following table relates to restricted stock awards granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans: Shares Weighted Average Grant Price Outstanding, unvested grants at June 1, 2013 2,015,023 $ 35.97 Granted 661,514 60.66 Canceled (52,124 ) 37.95 Vested (465,635 ) 28.76 Outstanding, unvested grants at May 31, 2014 2,158,778 45.04 Granted 627,033 80.73 Canceled (50,277 ) 49.33 Vested (525,421 ) 34.39 Outstanding, unvested grants at May 31, 2015 2,210,113 57.60 Granted 1,069,748 92.10 Canceled (70,998 ) 65.79 Vested (605,427 ) 38.76 Outstanding, unvested grants at May 31, 2016 2,603,436 $ 75.94 The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2016 was $ 149.4 million . The weighted-average period of time over which this cost will be recognized is 1.9 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
May 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Currency Unrealized Loss on Derivatives Other Total Balance at May 31, 2014 $ 41,525 $ (12,615 ) $ (482 ) $ 28,428 Other comprehensive (loss) income before reclassifications (38,538 ) 37 (350 ) (38,851 ) Amounts reclassified from accumulated other comprehensive income (loss) — 1,952 — 1,952 Net current period other comprehensive (loss) income (38,538 ) 1,989 (350 ) (36,899 ) Balance at May 31, 2015 2,987 (10,626 ) (832 ) (8,471 ) Other comprehensive loss before reclassifications (11,933 ) (12,156 ) (738 ) (24,827 ) Amounts reclassified from accumulated other comprehensive income (loss) 6,472 1,952 — 8,424 Net current period other comprehensive loss (5,461 ) (10,204 ) (738 ) (16,403 ) Balance at May 31, 2016 $ (2,474 ) $ (20,830 ) $ (1,570 ) $ (24,874 ) The following table summarizes the reclassifications out of accumulated other comprehensive loss during fiscal years ended May 31, 2016 and 2015 : Reclassifications out of Accumulated Other Comprehensive Income (Loss) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line in the Consolidated Statements of Income (in thousands) 2016 2015 Amortization of interest rate locks $ (3,130 ) $ (3,130 ) Interest expense Tax benefit 1,178 1,178 Income taxes Amortization of interest rate locks, net of tax $ (1,952 ) $ (1,952 ) Net of tax (in thousands) 2016 2015 Cumulative translation adjustment on Shred-it (1) $ (10,381 ) $ — Income from discontinued operations Tax benefit 3,909 — Income from discontinued operations Cumulative translation adjustment on Shred-it, net of tax (1) $ (6,472 ) $ — Net of tax (1) The cumulative translation adjustment was reclassified out of accumulated other comprehensive income due to the sale of Shred-it. |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
May 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Operating Segment Information GAAP requires companies to evaluate their reportable operating segments periodically and when certain events occur. As a result of a periodic evaluation, effective June 1, 2015, Cintas realigned its organizational structure and updated its reportable operating segments in light of certain changes in its business including the acquisition of ZEE in the first quarter of fiscal 2016. Cintas’ updated reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies, carpet and tile cleaning services and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists primarily of Fire Protection Services and its Direct Sale business, is included in All Other. All prior fiscal year results presented in the table below have been recast to reflect these new operating segments. Prior to June 1, 2015, Cintas classified its businesses into three operating segments based on the types of products and services provided. The Rental Uniforms and Ancillary Products operating segment consisted of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning services were also provided within this operating segment. The Uniform Direct Sales operating segment consisted of the direct sale of uniforms and related items. The First Aid, Safety and Fire Protection Services operating segment consisted of first aid, safety and fire protection products and services. 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 Significant Accounting Policies. Information related to the operations of Cintas' operating segments is set forth below: (In thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Corporate (1) Total May 31, 2016 Revenue $ 3,777,801 $ 461,783 $ 665,874 $ — $ 4,905,458 Gross margin $ 1,671,008 $ 197,010 $ 261,852 $ — $ 2,129,870 Selling and administrative expenses 998,069 147,503 202,550 — 1,348,122 Interest expense, net — — — 63,626 63,626 Income before income taxes $ 672,939 $ 49,507 $ 59,302 $ (63,626 ) $ 718,122 Depreciation and amortization $ 130,822 $ 16,021 $ 18,436 $ — $ 165,279 Capital expenditures $ 237,884 $ 22,364 $ 15,137 $ — $ 275,385 Total assets $ 3,114,159 $ 421,789 $ 358,683 $ 209,762 $ 4,104,393 May 31, 2015 Revenue $ 3,539,843 $ 326,593 $ 610,450 $ — $ 4,476,886 Gross margin $ 1,532,211 $ 152,339 $ 236,787 $ — $ 1,921,337 Selling and administrative expenses 926,176 107,226 191,528 — 1,224,930 Gain on sale of stock of an equity method investment — — — 21,739 21,739 Interest expense, net — — — 64,822 64,822 Income before income taxes $ 606,035 $ 45,113 $ 45,259 $ (43,083 ) $ 653,324 Depreciation and amortization $ 123,577 $ 9,774 $ 19,244 $ — $ 152,595 Capital expenditures $ 184,246 $ 13,589 $ 18,983 $ 902 $ 217,720 Total assets $ 2,845,326 $ 255,202 $ 345,201 $ 746,731 $ 4,192,460 May 31, 2014 Revenue $ 3,304,635 $ 294,966 $ 594,243 $ — $ 4,193,844 Gross margin $ 1,382,158 $ 136,136 $ 231,465 $ — $ 1,749,759 Selling and administrative expenses 860,311 96,246 190,482 — 1,147,039 Interest expense, net — — — 65,593 65,593 Income before income taxes $ 521,847 $ 39,890 $ 40,983 $ (65,593 ) $ 537,127 Depreciation and amortization $ 118,828 $ 8,283 $ 20,178 $ — $ 147,289 Capital expenditures $ 94,619 $ 9,195 $ 7,370 $ 34,396 $ 145,580 Total assets $ 2,840,809 $ 257,603 $ 340,650 $ 1,023,390 $ 4,462,452 (1) Corporate assets include cash and marketable securities in all periods. Corporate assets as of May 31, 2015 include Shred-it and real estate assets of Storage that were not included in the sale transactions. Corporate assets as of May 31, 2014 include Shred-it and the assets of Storage. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
May 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following is a summary of the results of operation for each of the quarters within the fiscal years ended May 31, 2016 and 2015 : May 31, 2016 (in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,198,890 $ 1,219,080 $ 1,216,083 $ 1,271,405 Gross margin $ 524,144 $ 527,400 $ 524,608 $ 553,718 Net income, continuing operations $ 106,198 $ 115,453 $ 117,279 $ 118,011 Basic earnings per share, continuing operations $ 0.94 $ 1.05 $ 1.07 $ 1.09 Diluted earnings per share, continuing operations $ 0.93 $ 1.03 $ 1.05 $ 1.08 Weighted average number of shares outstanding 110,597 108,301 107,843 106,136 May 31, 2015 (in thousands) (1) (2) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,102,077 $ 1,123,379 $ 1,108,847 $ 1,142,583 Gross margin $ 477,946 $ 481,424 $ 475,307 $ 486,660 Net income, continuing operations $ 105,905 $ 103,701 $ 100,331 $ 100,584 Basic earnings per share, continuing operations $ 0.90 $ 0.88 $ 0.86 $ 0.87 Diluted earnings per share, continuing operations $ 0.89 $ 0.86 $ 0.85 $ 0.86 Weighted average number of shares outstanding 116,659 117,115 116,178 113,666 (1) The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. (2) During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $ 13.6 million . |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
May 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations The results of Shred-it and Shredding are classified as discontinued operations for all periods presented as a result of entering into a definitive agreement during fiscal 2016 to sell the investment. During fiscal 2015, Cintas sold Storage and, as a result, its operations are also classified as discontinued operations for all periods presented. Shredding and Storage were previously included in the former Document Management Services reportable operating segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of Shredding and Storage have been excluded from both continuing operations and operating segment results for all periods presented. In fiscal 2014, Cintas completed the Shredding Transaction and realized a $106.4 million gain. The gain was computed as follows: the fair value of consideration received of $180.0 million plus the fair value of Cintas' retained non-controlling interest in Shred-it of $339.4 million less the carrying amount of Shredding of $413.0 million . As a result of the Shredding Transaction, the Company recorded an asset impairment charge of $16.1 million and other transaction costs of $28.5 million in fiscal 2014. The impairment charge was related to the abandonment of information systems assets that were not contributed to Shred-it and cannot be used by the Company for other purposes. The other transaction costs consisted of the following: $4.7 million of professional and legal fees; $0.7 million of employee termination benefit costs; $12.4 million of stock compensation expense resulting from the immediate vesting of Cintas stock options and awards of employees contributed to Shred-it; a $4.2 million charge for information systems contracts for which no future economic benefit exists; and $6.5 million of incremental profit sharing and employee compensation resulting from the gain, net of the impairment charge and other transaction costs. All of the impacts from the Shredding Transaction have been included in discontinued operations. For the fiscal year ended May 31, 2014, Cintas recorded a net gain on Shred-it of $1.2 million . Also, in conjunction with the partnership agreement, Cintas agreed to provide certain transition services such as information technology and accounting in support of Shred-it. The agreement expired in September 2015. At May 31, 2015, the carrying value of Shred-it was $210.1 million . In May of fiscal 2015, the Company received a dividend on Shred-it of $113.4 million , which reduced the carrying value of the investment. As of May 31, 2015, Cintas’ carrying value of Shred-it exceeded its share of the underlying equity in the net assets of the Shred-it Partnership by approximately $94.0 million (basis difference). The remaining basis difference was to be amortized over the weighted average estimated useful lives of the underlying assets which generated the basis difference (approximately 9 years) and recorded as a reduction in the income (loss) on Shred-it, net of tax. Cintas recorded its share of the partnership's income on a one month lag. For the fiscal year ended May 31, 2015, Cintas recorded a net loss on Shred-it of $5.5 million , which included amortization of basis differences of approximately $11.0 million . Cintas provides the following unaudited summary information regarding the Shred-it Partnership's financial position and results of operations as of and for the twelve months ended April 30, 2015: Summary Balance Sheet Information As of (in thousands) April 30, 2015 Assets Current assets $ 150,792 Non-current assets $ 968,956 Liabilities Current liabilities $ 73,971 Non-current liabilities $ 532,673 Summary Income Statement Information For the 12 Months Ended (in thousands) April 30, 2015 Net sales $ 695,628 Gross profit $ 432,532 Net income $ 10,385 In fiscal 2015, Cintas received additional proceeds related to the Shred-it Transaction. The Company realized a $4.1 million gain, net of tax, as a result of the additional consideration received. During fiscal 2015, we also recorded a loss related to the Shred-it Transaction due to the settlement of an outstanding Shredding-related legal claim. The expense, net of tax, was $1.0 million . In fiscal 2016, we completed the transaction to sell Shred-it. Cintas’ share of the proceeds from the sale were $578.3 million . During the fourth quarter of fiscal 2016, Cintas received additional proceeds and consideration related to the sale of Shred-it. The Company realized a pre-tax gain of $4.3 million as a result of the additional consideration received. At May 31, 2016, Cintas still has the opportunity to receive up to $30 million in additional consideration in the future, subject to certain holdback provisions. Because of the uncertainty surrounding the holdback provisions, this amount represents a gain contingency that has not been recorded. During the fiscal year ended May 31, 2016 , Cintas recorded a net loss on Shred-it of $24.3 million , which included amortization of basis differences of approximately $4.8 million . After the sale Shred-it, the basis difference no longer exists and Cintas no longer records income or loss from Shred-it. In fiscal 2015, Cintas sold Storage, excluding certain real estate owned by Cintas, in three separate transactions to three separate buyers. Certain real estate assets and related liabilities were not included in the Storage transactions in 2015 and were classified as held for sale as of May 31, 2015. This real estate was leased by a buyer of part of Storage. These lease payments did not represent a material direct cash flow of the disposed Storage business, and therefore, do not impact the classification of the Storage business as a discontinued operation. For the fiscal year ended May 31, 2015, cash proceeds received at the closing of each transaction or upon the settlement of contingencies totaled $158.4 million , net of cash contributed. Each transaction involved contingent consideration, and the Company had opportunities to receive additional proceeds if specified future events occurred. Because of the uncertainty surrounding the future events, these amounts represented gain contingencies and were not recorded until realized. During fiscal 2016, Cintas received additional proceeds on the sale of Storage related to the contingent consideration and realized a pre-tax gain of $10.9 million . During fiscal 2016, Cintas also sold the remaining Storage assets classified as held for sale. Cintas received proceeds of $24.4 million from the sale of these assets and realized a pretax gain of $4.8 million . Following is selected financial information included in net income from discontinued operations for the Shredding and Storage businesses: (In thousands) 2016 2015 (1) 2014 (1) Revenue $ — $ 31,379 $ 357,967 Income (loss) before income taxes, excluding gains (losses) from sale transactions and investments 434 (3,515 ) 6,913 Gain on Storage transactions 15,786 38,573 — (Loss) gain on Shred-it (1) (24,288 ) (3,851 ) 63,817 Gain on sale of Shred-it 378,359 — — Income tax expense (133,712 ) (11,110 ) (34,060 ) Net income from discontinued operations $ 236,579 $ 20,097 $ 36,670 (1) Results for the fiscal years ended May 31, 2015 and 2014 related to Shred-it and Shredding were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed. |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 12 Months Ended |
May 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Supplemental Guarantor Information | Supplemental Guarantor Information Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly-owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the $ 1,300.0 million of long-term senior notes, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly-owned, direct and indirect domestic subsidiaries. As allowed by SEC rules, the following condensed consolidating financial statements are provided as an alternative to filing separate financial statements of the guarantors. Each of the subsidiaries presented in the following condensed consolidating financial statements has been fully consolidated in Cintas' consolidated financial statements. The following condensed consolidating financial statements should be read in conjunction with the consolidated financial statements of Cintas and notes thereto of which this note is an integral part. Condensed consolidating financial statements for Cintas, Corp. 2, the subsidiary guarantors and non-guarantors are presented on the following pages: Condensed Consolidating Income Statement Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,913,812 $ 805,722 $ 213,526 $ (155,259 ) $ 3,777,801 Other — 1,576,078 8,542 66,270 (523,233 ) 1,127,657 Equity in net income of affiliates 456,941 — — — (456,941 ) — 456,941 4,489,890 814,264 279,796 (1,135,433 ) 4,905,458 Costs and expenses (income): Cost of uniform rental and facility services — 1,709,912 490,383 142,601 (236,103 ) 2,106,793 Cost of other — 1,070,064 (41,762 ) 48,539 (408,046 ) 668,795 Selling and administrative expenses — 1,427,424 (121,514 ) 69,257 (27,045 ) 1,348,122 Operating income 456,941 282,490 487,157 19,399 (464,239 ) 781,748 Interest income — — (666 ) (232 ) 2 (896 ) Interest expense (income) — 65,534 (1,027 ) 15 — 64,522 Income before income taxes 456,941 216,956 488,850 19,616 (464,241 ) 718,122 Income taxes — 71,323 180,100 9,874 (116 ) 261,181 Income from continuing operations 456,941 145,633 308,750 9,742 (464,125 ) 456,941 Income (loss) from discontinued operations, net of tax 236,579 242,416 — (5,837 ) (236,579 ) 236,579 Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Condensed Consolidating Income Statement Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,699,466 $ 748,185 $ 229,391 $ (137,199 ) $ 3,539,843 Other — 1,379,572 2,159 57,349 (502,037 ) 937,043 Equity in net income of affiliates 410,521 — — — (410,521 ) — 410,521 4,079,038 750,344 286,740 (1,049,757 ) 4,476,886 Costs and expenses (income): Cost of uniform rental and facility services — 1,660,625 407,505 154,601 (215,099 ) 2,007,632 Cost of other — 889,524 16,120 37,628 (395,355 ) 547,917 Selling and administrative expenses — 1,276,745 (100,024 ) 74,523 (26,314 ) 1,224,930 Operating income 410,521 252,144 426,743 19,988 (412,989 ) 696,407 Gain on sale of stock of an equity method investment — — 21,739 — — 21,739 Interest income — (12 ) (250 ) (79 ) 2 (339 ) Interest expense (income) — 66,298 (1,134 ) (3 ) — 65,161 Income before income taxes 410,521 185,858 449,866 20,070 (412,991 ) 653,324 Income taxes — 66,498 168,706 7,665 (66 ) 242,803 Income from continuing operations 410,521 119,360 281,160 12,405 (412,925 ) 410,521 Income from discontinued operations, net of tax 20,097 15,501 — 4,596 (20,097 ) 20,097 Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Condensed Consolidating Income Statement Year Ended May 31, 2014 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,500,618 $ 690,831 $ 235,118 $ (121,932 ) $ 3,304,635 Other — 1,302,715 4,192 53,990 (471,688 ) 889,209 Equity in net income of affiliates 337,772 — — — (337,772 ) — 337,772 3,803,333 695,023 289,108 (931,392 ) 4,193,844 Costs and expenses (income): Cost of uniform rental and facility services — 1,576,226 386,556 160,795 (201,100 ) 1,922,477 Cost of other — 843,675 16,570 37,334 (375,971 ) 521,608 Selling and administrative expenses — 1,172,858 (83,765 ) 76,049 (18,103 ) 1,147,039 Operating income 337,772 210,574 375,662 14,930 (336,218 ) 602,720 Interest income — (43 ) (178 ) (15,279 ) 15,271 (229 ) Interest expense (income) — 66,461 (635 ) (4 ) — 65,822 Income before income taxes 337,772 144,156 376,475 30,213 (351,489 ) 537,127 Income taxes — 43,327 148,332 7,774 (78 ) 199,355 Income from continuing operations 337,772 100,829 228,143 22,439 (351,411 ) 337,772 Income (loss) from discontinued operations, net of tax 36,670 61,434 (23,134 ) (1,630 ) (36,670 ) 36,670 Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (11,933 ) — (11,933 ) Cumulative translation adjustment on Shred-it — 5,875 — 597 — 6,472 Change in fair value of derivatives — (12,156 ) — — — (12,156 ) Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (730 ) (8 ) — (738 ) Other comprehensive loss — (4,329 ) (730 ) (11,344 ) — (16,403 ) Comprehensive income (loss) $ 693,520 $ 383,720 $ 308,020 $ (7,439 ) $ (700,704 ) $ 677,117 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (38,538 ) — (38,538 ) Change in fair value of derivatives — — — 37 — 37 Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (361 ) 11 — (350 ) Other comprehensive income (loss) — 1,952 (361 ) (38,490 ) — (36,899 ) Comprehensive income (loss) $ 430,618 $ 136,813 $ 280,799 $ (21,489 ) $ (433,022 ) $ 393,719 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2014 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (9,787 ) — (9,787 ) Change in fair value of derivatives — — — (228 ) — (228 ) Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (1,629 ) (3 ) — (1,632 ) Other comprehensive income (loss) — 1,952 (1,629 ) (10,018 ) — (9,695 ) Comprehensive income $ 374,442 $ 164,215 $ 203,380 $ 10,791 $ (388,081 ) $ 364,747 Condensed Consolidating Balance Sheet As of May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 55,821 $ 57,464 $ 26,072 $ — $ 139,357 Marketable securities — — — 70,405 — 70,405 Accounts receivable, net — 402,846 125,005 35,327 — 563,178 Inventories, net — 222,822 19,150 11,235 (3,845 ) 249,362 Uniforms and other rental items in service — 410,696 112,370 36,612 (19,722 ) 539,956 Income taxes, current — (151 ) 1,215 648 — 1,712 Prepaid expenses and other current assets — 6,668 18,435 962 — 26,065 Total current assets — 1,098,702 333,639 181,261 (23,567 ) 1,590,035 Property and equipment, at cost, net — 577,936 342,356 73,945 — 994,237 Investments 321,083 1,770,303 901,772 941,396 (3,809,602 ) 124,952 Goodwill — — 1,256,662 35,043 (112 ) 1,291,593 Service contracts, net — 81,462 13 2,240 — 83,715 Other assets, net 1,081,203 4,665 3,526,051 9,110 (4,601,168 ) 19,861 $ 1,402,286 $ 3,533,068 $ 6,360,493 $ 1,242,995 $ (8,434,449 ) $ 4,104,393 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,408,002 ) $ 1,932,977 $ 16,781 $ 38,005 $ 114,514 Accrued compensation and related liabilities — 70,045 26,551 5,380 — 101,976 Accrued liabilities — 82,770 252,717 13,578 — 349,065 Long-term debt due within one year — 250,000 — — — 250,000 Total current liabilities (465,247 ) (1,005,187 ) 2,212,245 35,739 38,005 815,555 Long-term liabilities: Long-term debt due after one year — 1,049,610 — 390 — 1,050,000 Deferred income taxes — (427 ) 252,149 7,753 — 259,475 Accrued liabilities — 19,628 116,091 985 — 136,704 Total long-term liabilities — 1,068,811 368,240 9,128 — 1,446,179 Total shareholders' equity 1,867,533 3,469,444 3,780,008 1,198,128 (8,472,454 ) 1,842,659 $ 1,402,286 $ 3,533,068 $ 6,360,493 $ 1,242,995 $ (8,434,449 ) $ 4,104,393 Condensed Consolidating Balance Sheet As of May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 74,145 $ 249,203 $ 93,725 $ — $ 417,073 Marketable securities — — — 16,081 — 16,081 Accounts receivable, net — 358,560 104,964 32,606 — 496,130 Inventories, net — 193,594 21,149 8,870 2,598 226,211 Uniforms and other rental items in service — 399,017 117,473 36,478 (18,963 ) 534,005 Income taxes, current — 1,191 (339 ) 84 — 936 Assets held for sale — 21,341 — — — 21,341 Prepaid expenses and other current assets — 5,514 17,492 1,024 — 24,030 Total current assets — 1,053,362 509,942 188,868 (16,365 ) 1,735,807 Property and equipment, at cost, net — 523,690 275,072 72,659 — 871,421 Investments 321,083 1,956,320 895,393 956,461 (3,799,565 ) 329,692 Goodwill — — 1,180,527 15,197 (112 ) 1,195,612 Service contracts, net — 42,400 34 — — 42,434 Other assets, net 1,154,596 12,373 2,741,950 3,572 (3,894,997 ) 17,494 $ 1,475,679 $ 3,588,145 $ 5,602,918 $ 1,236,757 $ (7,711,039 ) $ 4,192,460 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (877,042 ) $ 1,391,999 $ 21,876 $ 38,021 $ 109,607 Accrued compensation and related liabilities — 59,752 23,989 4,682 — 88,423 Accrued liabilities — 65,022 232,500 13,137 (724 ) 309,935 Liabilities held for sale — 704 — — — 704 Long-term debt due within one year — 293 (293 ) — — — Total current liabilities (465,247 ) (751,271 ) 1,648,195 39,695 37,297 508,669 Long-term liabilities: Long-term debt due after one year — 1,308,452 (9,766 ) 590 724 1,300,000 Deferred income taxes — (304 ) 333,929 5,702 — 339,327 Accrued liabilities — — 111,105 904 — 112,009 Total long-term liabilities — 1,308,148 435,268 7,196 724 1,751,336 Total shareholders' equity 1,940,926 3,031,268 3,519,455 1,189,866 (7,749,060 ) 1,932,455 $ 1,475,679 $ 3,588,145 $ 5,602,918 $ 1,236,757 $ (7,711,039 ) $ 4,192,460 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2016 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 96,885 43,441 9,365 — 149,691 Amortization of intangible assets — 14,830 304 454 — 15,588 Stock-based compensation 79,293 — — — — 79,293 Gain on Storage transactions — (12,547 ) — (3,239 ) — (15,786 ) Loss on Shred-it — 22,470 — 1,818 — 24,288 (Gain) loss on sale of Shred-it — (388,930 ) — 10,571 — (378,359 ) Deferred income taxes — (83,648 ) 22,025 2,321 — (59,302 ) Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (30,570 ) (20,007 ) (2,185 ) — (52,762 ) Inventories, net — (23,917 ) 2,011 (2,454 ) 6,443 (17,917 ) Uniforms and other rental items in service — (10,329 ) 5,104 (1,840 ) 759 (6,306 ) Prepaid expenses and other current assets — (142 ) (939 ) 116 — (965 ) Accounts payable — (461,203 ) 465,539 (4,884 ) (16 ) (564 ) Accrued compensation and related liabilities — 9,959 2,982 571 — 13,512 Accrued liabilities and other — (2,926 ) 24,761 155 724 22,714 Income taxes, current — 1,342 (1,565 ) (577 ) — (800 ) Net cash provided by (used in) operating activities 772,813 (480,677 ) 852,406 14,097 (692,794 ) 465,845 Cash flows from investing activities: Capital expenditures — (151,063 ) (111,392 ) (12,930 ) — (275,385 ) Proceeds from redemption of marketable securities — — — 434,179 — 434,179 Purchase of marketable securities and investments — (3,333 ) (12,085 ) (488,765 ) 10,037 (494,146 ) Proceeds from Storage transactions, net of cash contributed — 32,099 — 3,239 — 35,338 Proceeds from sale of Shred-it — 568,223 — 12,614 — 580,837 Acquisitions of businesses, net of cash acquired — (130,786 ) — (25,793 ) — (156,579 ) Other 94,344 154,412 (929,997 ) 1,897 683,481 4,137 Net cash provided by (used in) investing activities 94,344 469,552 (1,053,474 ) (75,559 ) 693,518 128,381 Cash flows from financing activities: Proceeds from the issuances of debt — — (165 ) 165 — — Repayment of debt — (9,151 ) 10,224 (365 ) (724 ) (16 ) Proceeds from exercise of stock-based compensation awards 28,226 — — — — 28,226 Dividends paid (115,232 ) — — (41 ) — (115,273 ) Repurchase of common stock (780,151 ) — — — — (780,151 ) Other — 1,952 (730 ) (732 ) — 490 Net cash (used in) provided by financing activities (867,157 ) (7,199 ) 9,329 (973 ) (724 ) (866,724 ) Effect of exchange rate changes on cash and cash equivalents — — — (5,218 ) — (5,218 ) Net decrease in cash and cash equivalents — (18,324 ) (191,739 ) (67,653 ) — (277,716 ) Cash and cash equivalents at beginning of year — 74,145 249,203 93,725 — 417,073 Cash and cash equivalents at end of year $ — $ 55,821 $ 57,464 $ 26,072 $ — $ 139,357 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2015 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 87,186 43,013 10,425 — 140,624 Amortization of intangible assets — 13,972 60 426 — 14,458 Stock-based compensation 47,002 — — — — 47,002 Gain on Storage transactions — (31,113 ) — (7,460 ) — (38,573 ) Loss on Shred-it — 3,190 — 661 — 3,851 Gain on sale of stock of an equity method investment — — (21,739 ) — — (21,739 ) Deferred income taxes — 67 18,565 2,234 — 20,866 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — 4,370 (7,095 ) 1,282 — (1,443 ) Inventories, net — 22,405 (405 ) (487 ) 2,272 23,785 Uniforms and other rental items in service — (24,351 ) (5,006 ) (2,764 ) 127 (31,994 ) Prepaid expenses and other current assets — (345 ) (2,740 ) (117 ) — (3,202 ) Accounts payable — (322,461 ) 289,110 (98 ) 4 (33,445 ) Accrued compensation and related liabilities — 3,171 1,400 (1,337 ) — 3,234 Accrued liabilities and other — (15,829 ) 42,551 6,322 22 33,066 Income taxes, current — 358 (6,155 ) (1,035 ) — (6,832 ) Net cash provided by (used in) operating activities 477,620 (124,519 ) 632,719 25,053 (430,597 ) 580,276 Cash flows from investing activities: Capital expenditures — (110,658 ) (92,600 ) (14,462 ) — (217,720 ) Proceeds from redemption of marketable securities — — — 161,938 — 161,938 Purchase of marketable securities and investments — (1,827 ) 38,731 (179,130 ) (53,245 ) (195,471 ) Proceeds from Storage transactions, net of cash contributed — 93,387 — 65,041 — 158,428 Proceeds from Shredding Transaction — 3,344 — — — 3,344 Proceeds from sale of stock of an equity method investment — — 29,933 — — 29,933 Dividends received on equity method investment — — 5,247 — — 5,247 Dividends received on Shred-it — 113,400 — — — 113,400 Acquisitions of businesses, net of cash acquired — (15,495 ) — — — (15,495 ) Other 235,951 42,199 (764,336 ) 3,705 483,864 1,383 Net cash provided by (used in) investing activities 235,951 124,350 (783,025 ) 37,092 430,619 44,987 Cash flows from financing activities: Proceeds from the issuance of debt — — (2,615 ) 2,615 — — Repayment of debt — (1,178 ) 2,962 (2,280 ) (22 ) (518 ) Proceeds from exercise of stock-based compensation awards 40,230 — — — — 40,230 Dividends paid (201,831 ) — — (60 ) — (201,891 ) Repurchase of common stock (551,970 ) — — — — (551,970 ) Other — 1,952 (363 ) — — 1,589 Net cash (used in) provided by financing activities (713,571 ) 774 (16 ) 275 (22 ) (712,560 ) Effect of exchange rate changes on cash and cash equivalents — — — (8,918 ) — (8,918 ) Net increase (decrease) in cash and cash equivalents — 605 (150,322 ) 53,502 — (96,215 ) Cash and cash equivalents at beginning of year — 73,540 399,525 40,223 — 513,288 Cash and cash equivalents at end of year $ — $ 74,145 $ 249,203 $ 93,725 $ — $ 417,073 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2014 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation — 110,100 44,856 13,264 — 168,220 Amortization of intangible assets — 20,547 153 1,942 — 22,642 Stock-based compensation 29,875 — — — — 29,875 (Gain) loss on Shred-it — (113,511 ) — 5,070 — (108,441 ) Shredding Transaction asset impairment charge — — 16,143 — — 16,143 Shredding Transaction costs — — 26,057 — — 26,057 Deferred income taxes — (2 ) 47,373 (262 ) — 47,109 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (53,053 ) (1,300 ) (1,878 ) — (56,231 ) Inventories, net — (14,735 ) 4,839 450 (1,616 ) (11,062 ) Uniforms and other rental items in service — (11,004 ) 557 (973 ) (15 ) (11,435 ) Prepaid expenses and other current assets — (386 ) (1,844 ) 53 — (2,177 ) Accounts payable — 25,573 23,246 (18,374 ) 1 30,446 Accrued compensation and related liabilities — 5,778 4,947 206 — 10,931 Accrued liabilities and other — 50,008 4,897 (689 ) 21 54,237 Income taxes, current — 2,621 9,902 2,690 — 15,213 Net cash provided by operating activities 404,317 184,199 384,835 22,308 (389,690 ) 605,969 Cash flows from investing activities: Capital expenditures — (123,978 ) (9,591 ) (12,011 ) — (145,580 ) Proceeds from redemption of marketable securities — — 5,659 48,537 — 54,196 Purchase of marketable securities and investments — (151,063 ) (242,956 ) (48,387 ) 378,548 (63,858 ) Proceeds from Shredding Transaction, net of cash contributed — 180,000 — (641 ) — 179,359 Acquisitions of businesses, net of cash acquired — (13,199 ) — (20,242 ) — (33,441 ) Other 13,783 (50,446 ) 8,108 12,173 11,163 (5,219 ) Net cash provided by (used in) investing activities 13,783 (158,686 ) (238,780 ) (20,571 ) 389,711 (14,543 ) Cash flows from financing activities: Proceeds from the issuance of debt — — (2,445 ) 2,445 — — Repayment of debt — (8,436 ) (106 ) 376 (21 ) (8,187 ) Proceeds from exercise of stock-based compensation awards 41,902 — — — — 41,902 Dividends paid (93,293 ) — — (27 ) — (93,320 ) Repurchase of common stock (370,599 ) — — — — (370,599 ) Other 3,890 1,952 8,951 (14,324 ) — 469 Net cash (used in) provided by financing activities (418,100 ) (6,484 ) 6,400 (11,530 ) (21 ) (429,735 ) Effect of exchange rate changes on cash and cash equivalents — — — (676 ) — (676 ) Net increase (decrease) in cash and cash equivalents — 19,029 152,455 (10,469 ) — 161,015 Cash and cash equivalents at beginning of year — 54,511 247,070 50,692 — 352,273 Cash and cash equivalents at end of year $ — $ 73,540 $ 399,525 $ 40,223 $ — $ 513,288 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
May 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II — Valuation and Qualifying Accounts and Reserves (In thousands) Balance at Beginning of Year (1) Additions (2) Deductions Balance at End of Year Allowance for Doubtful Accounts May 31, 2014 $ 15,855 $ 5,607 $ 6,556 $ 14,906 May 31, 2015 $ 14,906 $ 5,718 $ 4,950 $ 15,674 May 31, 2016 $ 15,674 $ 8,646 $ 4,716 $ 19,604 Reserve for Obsolete Inventory May 31, 2014 $ 29,487 $ 3,147 $ 1,961 $ 30,673 May 31, 2015 $ 30,673 $ 3,278 $ 3,244 $ 30,707 May 31, 2016 $ 30,707 $ 5,219 $ 3,010 $ 32,916 (1) Represents amounts charged to expense to increase reserve for estimated future bad debts or to increase reserve for obsolete inventory. Amounts related to inventory are computed by performing a thorough analysis of future marketability by specific inventory item as well as an estimate based on Cintas' historical rates of obsolesence. (2) Represents reductions in the balance sheet reserve due to the actual write-off of non-collectible accounts receivable or the physical disposal of obsolete inventory items. These amounts do not impact Cintas' consolidated income statement. |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of consolidation | The consolidated financial statements include the accounts of Cintas controlled majority-owned subsidiaries and any entities over which Cintas has control. Intercompany balances and transactions have been eliminated as appropriate. |
Use of estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Revenue recognition | Rental revenue, which is recorded in the Uniform Rental and Facility Services reportable operating segment, is recognized when services are performed. Other revenue, which is recorded in the First Aid and Safety Services reportable operating segment and All Other, is recognized when either services are performed or when products are shipped and the title and risks of ownership pass to the customer. |
Cost of uniform rental and facility services | 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. The Uniform Rental and Facility Services reportable operating segment inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution are included in the cost of uniform rental and facility services. |
Cost of other | Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, uniforms and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other includes inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution. |
Selling and administrative expenses | Selling and administrative expenses consist primarily of sales labor and commissions, management and administrative labor, payroll taxes, medical expense, insurance expense, legal and professional costs and amortization of finite-lived intangible assets. |
Cash and cash equivalents | Cintas considers all highly liquid domestic investments with a maturity of three months or less, at date of purchase, to be cash equivalents. |
Marketable securities | Marketable securities are typically comprised of fixed income securities and are classified as available-for-sale. |
Accounts receivable | Accounts receivable is comprised of amounts owed through product shipments and services provided and is presented net of an allowance for doubtful accounts. The allowance is an estimate based on historical rates of collections and allowances for specific accounts identified as uncollectible. The allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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. When an account is considered uncollectible, it is written off against the allowance for doubtful accounts. |
Inventories | Inventories are valued at the lower of cost (first-in, first-out) or market. Cintas applies a commonly accepted practice of using inventory turns to apply variances between actual and standard costs to the inventory balances. The judgments and estimates used to calculate inventory turns will have an impact on the valuation of inventories at the lower of cost or market. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. |
Uniforms and other rental items in service | These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory and related cost of uniforms and ancillary products that are presented in the consolidated financial statements. |
Property and equipment | Property and equipment is stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method primarily over the following estimated useful lives of the assets based on industry and Cintas specific experience, in years: Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 |
Investments | Investments consists primarily of the cash surrender value of life insurance policies and equity method investments. The equity method is used to account for an investment if our investment gives us the ability to exercise significant influence over the operating and financial policies of the investee. In general, equity method investments are initially measured at cost. However, an equity method investment resulting from a transaction in which a controlled group of assets that constitutes a business is deconsolidated is initially measured at fair value. Cintas recognizes its share of the investee’s earnings or losses in income. Cintas also adjusts its share of the investee's earnings for intra-entity transactions, basis differences, investee capital transactions and other comprehensive income through income or other comprehensive income as appropriate. Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. |
Long-lived assets | When events or circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated undiscounted future cash flows are compared to the carrying amount of the assets. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, an impairment loss is recorded based on the excess of the carrying amount of the assets over their respective fair values. Fair value is generally determined by discounted cash flows or based on prices of similar assets, as appropriate. |
Goodwill | Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment test, which may include an assessment of qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as strategies and financial performance. The test may also include the determination of the estimated fair value of Cintas' reporting units via comparisons to current market values, where available, and discounted cash flow analyses. Significant assumptions may include growth rates based on historical trends and margin improvement leveraged from such growth, as well as discount rates. We determine discount rates separately for each reporting unit using the weighted average cost of capital, which includes a calculation of cost of equity, which is developed using the capital asset pricing model and comparable company betas (a measure of systemic risk), and cost of debt. We also use comparable market earnings multiple data and our market capitalization to corroborate our reporting unit valuations. We test for goodwill impairment at the reporting unit level. As a result of Cintas’ operating segment realignment, the composition of Cintas’ reporting units for the evaluation of goodwill impairment has changed. Historically, Cintas’ reporting units were the same as the reportable operating segments, Rental Uniforms and Ancillary Products, Uniform Direct Sales and First Aid, Safety and Fire Protection Services. Effective June 1, 2015, Cintas identified five reporting units for purposes of evaluating goodwill impairment, Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other. As a result of the change in reporting units, Cintas was required to perform an interim impairment test on goodwill at June 1, 2015. |
Service contracts and other assets | Service contracts and other assets, which consist primarily of noncompete and consulting agreements obtained through acquisitions of businesses, are amortized by use of the straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years. Certain noncompete agreements, as well as all service contracts, require that a valuation be determined using a discounted cash flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. |
Accrued liabilities | Current accrued liabilities are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. General insurance liabilities represent the estimated ultimate cost of all asserted and unasserted claims incurred, primarily related to worker's compensation, auto liability and other general liability exposure through the consolidated balance sheet dates. Our reserves are estimated through actuarial procedures of the insurance industry and by using industry assumptions, adjusted for specific expectations based on our claims history. Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other environmental factors in the period in which it becomes known. These changes in estimates may be material to the consolidated financial statements. Long-term accrued liabilities consists primarily of reserves associated with unrecognized tax benefits, which are described in more detail in Note 8 entitled Income Taxes, and retirement obligations, which are described in more detail in Note 10 entitled Defined Contribution Plans. |
Stock-based compensation | Compensation expense is recognized for all share-based payments to employees, including stock options and restricted stock awards, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Measured compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. |
Derivatives and hedging activities | Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Derivatives are recorded at fair value on the consolidated balance sheet, and gains and losses are recorded as adjustments to income or other comprehensive income, as appropriate. |
Income taxes | Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities. See Note 8 entitled Income Taxes for the types of items that give rise to significant deferred income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes. Cintas regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, as adjusted for valuation allowances, will be realized. Accounting for uncertain tax positions requires the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Cintas is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, Cintas records reserves as deemed appropriate. Based on Cintas' evaluation of current tax positions, Cintas believes its tax related accruals are appropriate. |
Litigation and other contingencies | Cintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. 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 or consolidated results of operations of Cintas. |
Fair Value Measurements | Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. It also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Cintas' assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. In order to meet the requirements of ASC 820, Cintas utilizes two basic valuation approaches to determine the fair value of its assets and liabilities required to be recorded on a recurring basis at fair value. The first approach is the cost approach. The cost approach is generally the value a market participant would expect to replace the respective asset or liability. The second approach is the market approach. The market approach looks at what a market participant would consider valuing an exact or similar asset or liability to that of Cintas, including those traded on exchanges. Cintas' non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis primarily relate to assets and liabilities acquired in a business acquisition unless otherwise noted in Note 2 entitled Fair Value Disclosures. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis (including business acquisitions). Based on the nature of Cintas' business acquisitions, which occur regularly throughout the fiscal year, the majority of the assets acquired and liabilities assumed consist of working capital, primarily valued using Level 2 inputs, property and equipment, also primarily valued using Level 2 inputs and goodwill and other identified intangible assets valued using Level 3 inputs. In general, non-recurring fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows and company specific discount rates. |
New accounting pronouncements | In February 2013, the FASB issued Accounting Standards Update (ASU) 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." ASU 2013-02 requires an entity to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income if the item reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For reclassification items not required under GAAP to be reclassified directly to net income in their entirety in the same reporting period, an entity is required to cross-reference to other disclosures currently required under GAAP that provide additional detail about those amounts. The Company adopted ASU 2013-02 effective June 1, 2013. See Note 13 entitled Accumulated Other Comprehensive Income (Loss) for details of required disclosure. In April 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity,” which amended accounting guidance related to the reporting of discontinued operations and disclosures of disposals of components of an entity. The amended guidance changes the thresholds for disposals to qualify as discontinued operations and requires additional disclosures. This guidance is effective for reporting periods beginning after December 15, 2014 and is required to be applied prospectively. Cintas adopted ASU 2014-08 during the quarter ended August 31, 2015 and applied the amended accounting guidance to Shred-it and will apply it to future transactions, as appropriate. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," to clarify revenue recognition principles. This guidance is intended to improve disclosure requirements and enhance the comparability of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. This guidance will be effective for reporting periods beginning after December 15, 2017 and will be required to be applied retrospectively. Early application of the amendments in this update is not permitted. Cintas is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-17, “Balance Sheet Classifications of Deferred Taxes,” which amended accounting guidance related to the presentation of deferred tax liabilities and assets. The amended guidance requires that all deferred tax liabilities and assets be classified as noncurrent on the balance sheet. This guidance is effective for reporting periods beginning after December 15, 2016; however, early adoption is permitted. This guidance can also be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. Cintas adopted ASU 2015-17 during the quarter ended November 30, 2015 and has applied this amended accounting guidance to its deferred tax liabilities and assets for all periods presented. The impact of this change in accounting principle on balances previously reported as of May 31, 2015 was a reclassification of $112.4 million from current liabilities to long term liabilities. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Topic 842 supersedes the previous leases standard, ASC 840, Leases.This guidance is effective for reporting periods beginning after December 15, 2018; however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Cintas is currently evaluating the impact that ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 is intended to simplify accounting for share-based payments. Upon adoption, ASU 2016-09 will require that excess tax benefits for share-based payments be recorded as a reduction of income tax expense and reflected within operating cash flows rather than being recorded within equity and reflected within financing cash flows. The standard also permits the repurchase of more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. This update is effective for interim and annual periods beginning after December 15, 2016; however, early adoption is permitted. The Company is currently assessing the effect that adoption of ASU 2016-09 will have on its consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the Consolidated Financial Statements. |
Significant Accounting Polici28
Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following amounts: (In thousands) 2016 2015 Raw materials $ 17,794 $ 16,935 Work in process 14,731 17,079 Finished goods 216,837 192,197 $ 249,362 $ 226,211 |
Property and Equipment Estimated Useful Lives | Depreciation is calculated using the straight-line method primarily over the following estimated useful lives of the assets based on industry and Cintas specific experience, in years: Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 (In thousands) 2016 2015 Land $ 117,881 $ 116,172 Buildings and improvements 509,316 501,742 Equipment 1,584,478 1,446,041 Leasehold improvements 28,530 26,023 Construction in progress 173,367 104,300 2,413,572 2,194,278 Less: accumulated depreciation 1,419,335 1,322,857 $ 994,237 $ 871,421 |
Current Accrued Liabilities | Current accrued liabilities include the following amounts: (In thousands) 2016 2015 General insurance liabilities $ 128,759 $ 113,714 Employee benefit related liabilities 75,587 68,907 Taxes and related liabilities 5,783 6,064 Accrued interest 26,682 26,628 Other 112,254 94,622 $ 349,065 $ 309,935 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
May 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on a Recurring Basis | These financial instruments measured at fair value on a recurring basis are summarized below: As of May 31, 2016 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 139,357 $ — $ — $ 139,357 Marketable securities: Canadian treasury securities — 70,405 — 70,405 Total assets at fair value $ 139,357 $ 70,405 $ — $ 209,762 Long term accrued liabilities: Interest rate lock agreement $ — $ 19,628 $ — $ 19,628 Total liabilities at fair value $ — $ 19,628 $ — $ 19,628 As of May 31, 2015 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 417,073 $ — $ — $ 417,073 Marketable securities: Canadian treasury securities — 16,081 — 16,081 Total assets at fair value $ 417,073 $ 16,081 $ — $ 433,154 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
May 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Depreciation is calculated using the straight-line method primarily over the following estimated useful lives of the assets based on industry and Cintas specific experience, in years: Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 (In thousands) 2016 2015 Land $ 117,881 $ 116,172 Buildings and improvements 509,316 501,742 Equipment 1,584,478 1,446,041 Leasehold improvements 28,530 26,023 Construction in progress 173,367 104,300 2,413,572 2,194,278 Less: accumulated depreciation 1,419,335 1,322,857 $ 994,237 $ 871,421 |
Goodwill, Service Contracts a31
Goodwill, Service Contracts and Other Assets (Tables) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Goodwill, Service Contracts and Other Assets [Abstract] | ||
Changes in Carrying Amount of Goodwill by Operating Segment | Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2016, by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance at June 1, 2015 $ 943,909 $ 154,954 $ 96,749 1,195,612 Goodwill acquired 10,020 86,874 203 97,097 Foreign currency translation (713 ) (380 ) (23 ) (1,116 ) Balance as of May 31, 2016 $ 953,216 $ 241,448 $ 96,929 $ 1,291,593 The following table illustrates the changes in Goodwill as a result of the segment realignment: Goodwill Allocation as of June 1, 2015 (in thousands) Total Uniform Rental and Facility Services Rental Uniforms and Ancillary Products segment goodwill reassigned $ 929.4 Uniform Direct Sales segment goodwill reassigned 14.5 $ 943.9 First Aid and Safety Services First Aid, Safety and Fire Protection segment goodwill reassigned $ 155.0 All Other First Aid, Safety and Fire Protection segment goodwill reassigned $ 75.5 Rental Uniforms and Ancillary Products segment goodwill reassigned 12.0 Uniform Direct Sales segment goodwill reassigned 9.2 $ 96.7 | Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2015 , by historical reportable operating segment, are as follows: Goodwill (in thousands) Rental Uniforms & Ancillary Products Uniform Direct Sales First Aid, Safety & Fire Protection Corporate Total Balance as of June 1, 2014 $ 943,516 $ 23,905 $ 221,911 $ 78,079 $ 1,267,411 Goodwill acquired 70 — 8,578 — 8,648 Goodwill divested in Storage Transactions — — — (75,660 ) (75,660 ) Foreign currency translation (2,141 ) (227 ) — (2,419 ) (4,787 ) Balance as of May 31, 2015 $ 941,445 $ 23,678 $ 230,489 $ — $ 1,195,612 |
Changes in Carrying Amount of Service Contracts by Operating Segment | Service Contracts (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance at June 1, 2015 $ 6,677 $ 1,576 $ 34,181 $ 42,434 Service contracts acquired 18,912 34,052 2,730 55,694 Service contracts amortization (4,398 ) (3,355 ) (6,639 ) (14,392 ) Foreign currency translation — (21 ) — (21 ) Balance as of May 31, 2016 $ 21,191 $ 32,252 $ 30,272 $ 83,715 | Service Contracts (in thousands) Rental Uniforms & Ancillary Products Uniform Direct Sales First Aid, Safety & Fire Protection Corporate Total Balance as of June 1, 2014 $ 17,171 $ — $ 28,034 $ 10,470 $ 55,675 Service contracts acquired 313 — 9,543 265 10,121 Service contracts divested in Storage Transactions — — — (9,570 ) (9,570 ) Service contracts amortization (5,619 ) — (7,005 ) (597 ) (13,221 ) Foreign currency translation (3 ) — — (568 ) (571 ) Balance as of May 31, 2015 $ 11,862 $ — $ 30,572 $ — $ 42,434 |
Information Regarding Service Contracts and Other Assets | Information regarding Cintas' service contracts and other assets is as follows: As of May 31, 2016 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 395,482 $ 311,767 $ 83,715 Noncompete and consulting agreements $ 42,378 $ 40,928 $ 1,450 Other 27,943 9,532 18,411 Total $ 70,321 $ 50,460 $ 19,861 As of May 31, 2015 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 340,816 $ 298,382 $ 42,434 Noncompete and consulting agreements $ 41,828 $ 40,379 $ 1,449 Other 23,595 7,550 16,045 Total $ 65,423 $ 47,929 $ 17,494 |
Long-Term Debt and Derivatives
Long-Term Debt and Derivatives (Tables) | 12 Months Ended |
May 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (In thousands) 2016 2015 Unsecured term notes due through 2036 at an average rate of 4.6% $ 1,300,000 $ 1,300,000 Less: amounts due within one year 250,000 — $ 1,050,000 $ 1,300,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | (In thousands) 2016 2015 2014 Income before income taxes for continuing operations consists of the following components: U.S. operations $ 697,974 $ 635,270 $ 519,386 Foreign operations 20,148 18,054 17,741 $ 718,122 $ 653,324 $ 537,127 |
Components of Income Taxes | (In thousands) 2016 2015 2014 Income tax expense for continuing operations consists of the following components: Current: Federal $ 284,046 $ 203,202 $ 139,102 State and local 25,926 25,346 18,286 309,972 228,548 157,388 Deferred (48,791 ) 14,255 41,967 $ 261,181 $ 242,803 $ 199,355 |
Reconciliation of Income Tax Expense Using the Statutory Rate and Actual Income Tax Expense | (In thousands) 2016 2015 2014 Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows: Income taxes at the U.S. federal statutory rate $ 251,352 $ 228,727 $ 187,375 State and local income taxes, net of federal benefit 16,672 16,705 17,934 Other (6,843 ) (2,629 ) (5,954 ) $ 261,181 $ 242,803 $ 199,355 |
Components of Deferred Income Taxes | The components of deferred income taxes included on the consolidated balance sheets are as follows: (In thousands) 2016 2015 Deferred tax assets: Allowance for doubtful accounts $ 7,416 $ 4,857 Inventory obsolescence 13,702 12,266 Insurance and contingencies 42,717 38,522 Stock-based compensation 45,720 29,910 Foreign related carry-forwards 17,883 16,862 Treasury locks 12,055 5,829 Other 8,100 9,461 147,593 117,707 Valuation allowance (17,047 ) (14,690 ) 130,546 103,017 Deferred tax liabilities: In service inventory 172,704 169,629 Property 93,784 77,871 Intangibles 104,585 84,218 Investment in partnerships 2,563 86,098 State taxes and other 16,385 24,528 390,021 442,344 Net deferred tax liability $ 259,475 $ 339,327 |
Summary of Valuation Allowance | The progression of the valuation allowance is as follows: (In thousands) 2016 2015 Balance at beginning of year $ (14,690 ) $ (13,358 ) Additions (3,437 ) (2,433 ) Subtractions 1,080 1,101 Balance at end of year $ (17,047 ) $ (14,690 ) |
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows: (In thousands) Balance at June 1, 2013 $ 13,709 Additions for tax positions of prior years 2,586 Settlements (1,270 ) Statute expirations (1,963 ) Balance at May 31, 2014 $ 13,062 Additions for tax positions of prior years 4,001 Settlements (48 ) Statute expirations (1,603 ) Balance at May 31, 2015 $ 15,412 Additions for tax positions of prior years 3,259 Settlements (48 ) Statute expirations (2,092 ) Balance at May 31, 2016 $ 16,531 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
May 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Aggregate Purchase Price for Businesses Acquired | The assets acquired and liabilities assumed are valued at the estimated fair value at the acquisition date as required by GAAP. Assets: Cash and cash equivalents $ 333 Accounts receivable 16,705 Inventory 5,987 Other current assets 1,443 Property, plant and equipment 849 Goodwill 86,392 Service contracts 34,000 Other intagibles 4,500 Liabilities: Accounts payable (7,195 ) Accrued liabilities (4,428 ) Deferred income taxes (4,586 ) Total consideration $ 134,000 The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired: (In thousands) 2016 2015 Fair value of tangible assets acquired $ 26,759 $ 177 Fair value of service contracts acquired 55,694 9,856 Fair value of other intangibles acquired 4,639 945 Net goodwill recognized 97,097 8,648 Total fair value of assets acquired 184,189 19,626 Fair value of liabilities assumed and incurred 27,610 4,131 Total cash paid for acquisitions $ 156,579 $ 15,495 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
May 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share For Continuing Operations | The following table sets forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas' common shares: (In thousands except per share data) 2016 2015 2014 Basic Earnings per Share from Continuing Operations Income from continuing operations $ 456,941 $ 410,521 $ 337,772 Less: income from continuing operations allocated to participating securities 7,405 3,900 3,082 Income from continuing operations available to common shareholders $ 449,536 $ 406,621 $ 334,690 Basic weighted average common shares outstanding 108,221 115,900 120,377 Basic earnings per share from continuing operations $ 4.15 $ 3.51 $ 2.78 (In thousands except per share data) 2016 2015 2014 Diluted Earnings per Share from Continuing Operations Income from continuing operations $ 456,941 $ 410,521 $ 337,772 Less: income from continuing operations allocated to participating securities 7,405 3,900 3,082 Income from continuing operations available to common shareholders $ 449,536 $ 406,621 $ 334,690 Basic weighted average common shares outstanding 108,221 115,900 120,377 Effect of dilutive securities – employee stock options 1,735 1,643 1,263 Diluted weighted average common shares outstanding 109,956 117,543 121,640 Diluted earnings per share from continuing operations $ 4.09 $ 3.46 $ 2.75 |
Summary of Buyback Activity by Program | On August 4, 2015, we announced that the Board of Directors authorized a new $500.0 million share buyback program. The following table summarizes the buyback activity by program and fiscal period: (In thousands except per share data) 2016 2015 Buyback Program Shares Avg. Price per Share Purchase Price Shares Avg. Price per Share Purchase Price July 30, 2013 — $ — $ — 3,981 $ 75.49 $ 300,500 January 13, 2015 3,078 $ 85.44 $ 262,928 2,870 $ 82.60 $ 237,072 August 4, 2015 5,649 $ 87.85 $ 496,309 — $ — $ — 8,727 $ 87.00 $ 759,237 6,851 $ 78.47 $ 537,572 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
May 31, 2016 | |
Share-based Compensation [Abstract] | |
Assumptions Used to Determine Fair Value of Options | The fair value of options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: 2016 2015 2014 Risk-free interest rate 2.0 % 2.0 % 2.0 % Dividend yield 1.4 % 1.6 % 1.7 % Expected volatility of Cintas' common stock 23.3 % 28.0 % 28.0 % Expected life of the option in years 7.5 7.5 7.5 |
Stock Options Granted and Outstanding | The weighted average expected term was determined based on the historical employee exercise behavior of the options. The weighted-average fair value of stock options granted during fiscal 2016 , 2015 and 2014 was $ 21.60 , $ 20.64 and $ 16.63 , respectively. The information presented in the following table relates primarily to stock options granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans: Shares Weighted Average Exercise Price Outstanding, June 1, 2013 (1,815,795 shares exercisable) 7,885,638 $ 37.60 Granted 2,111,649 61.04 Canceled (699,314 ) 42.42 Exercised (1,272,179 ) 39.03 Outstanding, May 31, 2014 (1,583,413 shares exercisable) 8,025,794 43.12 Granted 1,590,185 84.59 Canceled (486,720 ) 55.50 Exercised (1,293,689 ) 38.11 Outstanding, May 31, 2015 (1,426,550 shares exercisable) 7,835,570 51.59 Granted 1,739,767 93.55 Canceled (235,455 ) 60.01 Exercised (919,975 ) 35.07 Outstanding, May 31, 2016 (1,649,236 shares exercisable) 8,419,907 $ 61.83 |
Summary of Information Related to Stock Options Outstanding | The following table summarizes the information related to stock options outstanding at May 31, 2016 : Outstanding Options Exercisable Options Range of Exercise Prices Number Outstanding Average Remaining Option Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 20.29 – $ 37.75 1,555,054 4.44 $ 31.22 1,122,463 $ 29.87 37.76 – 47.22 2,105,731 6.33 42.33 437,534 39.91 47.23 – 86.09 1,824,303 8.17 64.90 89,239 62.96 86.10 – 95.09 2,934,819 9.58 90.54 — — $ 20.29 – $ 95.09 8,419,907 7.51 $ 61.83 1,649,236 $ 34.32 |
Restricted Stock Awards Granted and Outstanding | The information presented in the following table relates to restricted stock awards granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans: Shares Weighted Average Grant Price Outstanding, unvested grants at June 1, 2013 2,015,023 $ 35.97 Granted 661,514 60.66 Canceled (52,124 ) 37.95 Vested (465,635 ) 28.76 Outstanding, unvested grants at May 31, 2014 2,158,778 45.04 Granted 627,033 80.73 Canceled (50,277 ) 49.33 Vested (525,421 ) 34.39 Outstanding, unvested grants at May 31, 2015 2,210,113 57.60 Granted 1,069,748 92.10 Canceled (70,998 ) 65.79 Vested (605,427 ) 38.76 Outstanding, unvested grants at May 31, 2016 2,603,436 $ 75.94 |
Accumulated Other Comprehensi37
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
May 31, 2016 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Currency Unrealized Loss on Derivatives Other Total Balance at May 31, 2014 $ 41,525 $ (12,615 ) $ (482 ) $ 28,428 Other comprehensive (loss) income before reclassifications (38,538 ) 37 (350 ) (38,851 ) Amounts reclassified from accumulated other comprehensive income (loss) — 1,952 — 1,952 Net current period other comprehensive (loss) income (38,538 ) 1,989 (350 ) (36,899 ) Balance at May 31, 2015 2,987 (10,626 ) (832 ) (8,471 ) Other comprehensive loss before reclassifications (11,933 ) (12,156 ) (738 ) (24,827 ) Amounts reclassified from accumulated other comprehensive income (loss) 6,472 1,952 — 8,424 Net current period other comprehensive loss (5,461 ) (10,204 ) (738 ) (16,403 ) Balance at May 31, 2016 $ (2,474 ) $ (20,830 ) $ (1,570 ) $ (24,874 ) |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the reclassifications out of accumulated other comprehensive loss during fiscal years ended May 31, 2016 and 2015 : Reclassifications out of Accumulated Other Comprehensive Income (Loss) Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line in the Consolidated Statements of Income (in thousands) 2016 2015 Amortization of interest rate locks $ (3,130 ) $ (3,130 ) Interest expense Tax benefit 1,178 1,178 Income taxes Amortization of interest rate locks, net of tax $ (1,952 ) $ (1,952 ) Net of tax (in thousands) 2016 2015 Cumulative translation adjustment on Shred-it (1) $ (10,381 ) $ — Income from discontinued operations Tax benefit 3,909 — Income from discontinued operations Cumulative translation adjustment on Shred-it, net of tax (1) $ (6,472 ) $ — Net of tax (1) The cumulative translation adjustment was reclassified out of accumulated other comprehensive income due to the sale of Shred-it. |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
May 31, 2016 | |
Segment Reporting [Abstract] | |
Information Related to Operating Segments | Information related to the operations of Cintas' operating segments is set forth below: (In thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Corporate (1) Total May 31, 2016 Revenue $ 3,777,801 $ 461,783 $ 665,874 $ — $ 4,905,458 Gross margin $ 1,671,008 $ 197,010 $ 261,852 $ — $ 2,129,870 Selling and administrative expenses 998,069 147,503 202,550 — 1,348,122 Interest expense, net — — — 63,626 63,626 Income before income taxes $ 672,939 $ 49,507 $ 59,302 $ (63,626 ) $ 718,122 Depreciation and amortization $ 130,822 $ 16,021 $ 18,436 $ — $ 165,279 Capital expenditures $ 237,884 $ 22,364 $ 15,137 $ — $ 275,385 Total assets $ 3,114,159 $ 421,789 $ 358,683 $ 209,762 $ 4,104,393 May 31, 2015 Revenue $ 3,539,843 $ 326,593 $ 610,450 $ — $ 4,476,886 Gross margin $ 1,532,211 $ 152,339 $ 236,787 $ — $ 1,921,337 Selling and administrative expenses 926,176 107,226 191,528 — 1,224,930 Gain on sale of stock of an equity method investment — — — 21,739 21,739 Interest expense, net — — — 64,822 64,822 Income before income taxes $ 606,035 $ 45,113 $ 45,259 $ (43,083 ) $ 653,324 Depreciation and amortization $ 123,577 $ 9,774 $ 19,244 $ — $ 152,595 Capital expenditures $ 184,246 $ 13,589 $ 18,983 $ 902 $ 217,720 Total assets $ 2,845,326 $ 255,202 $ 345,201 $ 746,731 $ 4,192,460 May 31, 2014 Revenue $ 3,304,635 $ 294,966 $ 594,243 $ — $ 4,193,844 Gross margin $ 1,382,158 $ 136,136 $ 231,465 $ — $ 1,749,759 Selling and administrative expenses 860,311 96,246 190,482 — 1,147,039 Interest expense, net — — — 65,593 65,593 Income before income taxes $ 521,847 $ 39,890 $ 40,983 $ (65,593 ) $ 537,127 Depreciation and amortization $ 118,828 $ 8,283 $ 20,178 $ — $ 147,289 Capital expenditures $ 94,619 $ 9,195 $ 7,370 $ 34,396 $ 145,580 Total assets $ 2,840,809 $ 257,603 $ 340,650 $ 1,023,390 $ 4,462,452 (1) Corporate assets include cash and marketable securities in all periods. Corporate assets as of May 31, 2015 include Shred-it and real estate assets of Storage that were not included in the sale transactions. Corporate assets as of May 31, 2014 include Shred-it and the assets of Storage. |
Quarterly Financial Data (Una39
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
May 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Summary of Results of Operations for Each Quarter | The following is a summary of the results of operation for each of the quarters within the fiscal years ended May 31, 2016 and 2015 : May 31, 2016 (in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,198,890 $ 1,219,080 $ 1,216,083 $ 1,271,405 Gross margin $ 524,144 $ 527,400 $ 524,608 $ 553,718 Net income, continuing operations $ 106,198 $ 115,453 $ 117,279 $ 118,011 Basic earnings per share, continuing operations $ 0.94 $ 1.05 $ 1.07 $ 1.09 Diluted earnings per share, continuing operations $ 0.93 $ 1.03 $ 1.05 $ 1.08 Weighted average number of shares outstanding 110,597 108,301 107,843 106,136 May 31, 2015 (in thousands) (1) (2) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,102,077 $ 1,123,379 $ 1,108,847 $ 1,142,583 Gross margin $ 477,946 $ 481,424 $ 475,307 $ 486,660 Net income, continuing operations $ 105,905 $ 103,701 $ 100,331 $ 100,584 Basic earnings per share, continuing operations $ 0.90 $ 0.88 $ 0.86 $ 0.87 Diluted earnings per share, continuing operations $ 0.89 $ 0.86 $ 0.85 $ 0.86 Weighted average number of shares outstanding 116,659 117,115 116,178 113,666 (1) The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. (2) During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $ 13.6 million . |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
May 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Selective Unaudited Financial Information for Equity Method Investment | Cintas provides the following unaudited summary information regarding the Shred-it Partnership's financial position and results of operations as of and for the twelve months ended April 30, 2015: Summary Balance Sheet Information As of (in thousands) April 30, 2015 Assets Current assets $ 150,792 Non-current assets $ 968,956 Liabilities Current liabilities $ 73,971 Non-current liabilities $ 532,673 Summary Income Statement Information For the 12 Months Ended (in thousands) April 30, 2015 Net sales $ 695,628 Gross profit $ 432,532 Net income $ 10,385 |
Schedule of Discontinued Operations | Following is selected financial information included in net income from discontinued operations for the Shredding and Storage businesses: (In thousands) 2016 2015 (1) 2014 (1) Revenue $ — $ 31,379 $ 357,967 Income (loss) before income taxes, excluding gains (losses) from sale transactions and investments 434 (3,515 ) 6,913 Gain on Storage transactions 15,786 38,573 — (Loss) gain on Shred-it (1) (24,288 ) (3,851 ) 63,817 Gain on sale of Shred-it 378,359 — — Income tax expense (133,712 ) (11,110 ) (34,060 ) Net income from discontinued operations $ 236,579 $ 20,097 $ 36,670 (1) Results for the fiscal years ended May 31, 2015 and 2014 related to Shred-it and Shredding were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed. |
Supplemental Guarantor Inform41
Supplemental Guarantor Information (Tables) | 12 Months Ended |
May 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Income Statement | Condensed Consolidating Income Statement Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,913,812 $ 805,722 $ 213,526 $ (155,259 ) $ 3,777,801 Other — 1,576,078 8,542 66,270 (523,233 ) 1,127,657 Equity in net income of affiliates 456,941 — — — (456,941 ) — 456,941 4,489,890 814,264 279,796 (1,135,433 ) 4,905,458 Costs and expenses (income): Cost of uniform rental and facility services — 1,709,912 490,383 142,601 (236,103 ) 2,106,793 Cost of other — 1,070,064 (41,762 ) 48,539 (408,046 ) 668,795 Selling and administrative expenses — 1,427,424 (121,514 ) 69,257 (27,045 ) 1,348,122 Operating income 456,941 282,490 487,157 19,399 (464,239 ) 781,748 Interest income — — (666 ) (232 ) 2 (896 ) Interest expense (income) — 65,534 (1,027 ) 15 — 64,522 Income before income taxes 456,941 216,956 488,850 19,616 (464,241 ) 718,122 Income taxes — 71,323 180,100 9,874 (116 ) 261,181 Income from continuing operations 456,941 145,633 308,750 9,742 (464,125 ) 456,941 Income (loss) from discontinued operations, net of tax 236,579 242,416 — (5,837 ) (236,579 ) 236,579 Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Condensed Consolidating Income Statement Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,699,466 $ 748,185 $ 229,391 $ (137,199 ) $ 3,539,843 Other — 1,379,572 2,159 57,349 (502,037 ) 937,043 Equity in net income of affiliates 410,521 — — — (410,521 ) — 410,521 4,079,038 750,344 286,740 (1,049,757 ) 4,476,886 Costs and expenses (income): Cost of uniform rental and facility services — 1,660,625 407,505 154,601 (215,099 ) 2,007,632 Cost of other — 889,524 16,120 37,628 (395,355 ) 547,917 Selling and administrative expenses — 1,276,745 (100,024 ) 74,523 (26,314 ) 1,224,930 Operating income 410,521 252,144 426,743 19,988 (412,989 ) 696,407 Gain on sale of stock of an equity method investment — — 21,739 — — 21,739 Interest income — (12 ) (250 ) (79 ) 2 (339 ) Interest expense (income) — 66,298 (1,134 ) (3 ) — 65,161 Income before income taxes 410,521 185,858 449,866 20,070 (412,991 ) 653,324 Income taxes — 66,498 168,706 7,665 (66 ) 242,803 Income from continuing operations 410,521 119,360 281,160 12,405 (412,925 ) 410,521 Income from discontinued operations, net of tax 20,097 15,501 — 4,596 (20,097 ) 20,097 Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Condensed Consolidating Income Statement Year Ended May 31, 2014 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 2,500,618 $ 690,831 $ 235,118 $ (121,932 ) $ 3,304,635 Other — 1,302,715 4,192 53,990 (471,688 ) 889,209 Equity in net income of affiliates 337,772 — — — (337,772 ) — 337,772 3,803,333 695,023 289,108 (931,392 ) 4,193,844 Costs and expenses (income): Cost of uniform rental and facility services — 1,576,226 386,556 160,795 (201,100 ) 1,922,477 Cost of other — 843,675 16,570 37,334 (375,971 ) 521,608 Selling and administrative expenses — 1,172,858 (83,765 ) 76,049 (18,103 ) 1,147,039 Operating income 337,772 210,574 375,662 14,930 (336,218 ) 602,720 Interest income — (43 ) (178 ) (15,279 ) 15,271 (229 ) Interest expense (income) — 66,461 (635 ) (4 ) — 65,822 Income before income taxes 337,772 144,156 376,475 30,213 (351,489 ) 537,127 Income taxes — 43,327 148,332 7,774 (78 ) 199,355 Income from continuing operations 337,772 100,829 228,143 22,439 (351,411 ) 337,772 Income (loss) from discontinued operations, net of tax 36,670 61,434 (23,134 ) (1,630 ) (36,670 ) 36,670 Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 |
Condensed Consolidating Statement of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (11,933 ) — (11,933 ) Cumulative translation adjustment on Shred-it — 5,875 — 597 — 6,472 Change in fair value of derivatives — (12,156 ) — — — (12,156 ) Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (730 ) (8 ) — (738 ) Other comprehensive loss — (4,329 ) (730 ) (11,344 ) — (16,403 ) Comprehensive income (loss) $ 693,520 $ 383,720 $ 308,020 $ (7,439 ) $ (700,704 ) $ 677,117 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (38,538 ) — (38,538 ) Change in fair value of derivatives — — — 37 — 37 Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (361 ) 11 — (350 ) Other comprehensive income (loss) — 1,952 (361 ) (38,490 ) — (36,899 ) Comprehensive income (loss) $ 430,618 $ 136,813 $ 280,799 $ (21,489 ) $ (433,022 ) $ 393,719 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2014 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments — — — (9,787 ) — (9,787 ) Change in fair value of derivatives — — — (228 ) — (228 ) Amortization of interest rate lock agreements — 1,952 — — — 1,952 Other — — (1,629 ) (3 ) — (1,632 ) Other comprehensive income (loss) — 1,952 (1,629 ) (10,018 ) — (9,695 ) Comprehensive income $ 374,442 $ 164,215 $ 203,380 $ 10,791 $ (388,081 ) $ 364,747 |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 55,821 $ 57,464 $ 26,072 $ — $ 139,357 Marketable securities — — — 70,405 — 70,405 Accounts receivable, net — 402,846 125,005 35,327 — 563,178 Inventories, net — 222,822 19,150 11,235 (3,845 ) 249,362 Uniforms and other rental items in service — 410,696 112,370 36,612 (19,722 ) 539,956 Income taxes, current — (151 ) 1,215 648 — 1,712 Prepaid expenses and other current assets — 6,668 18,435 962 — 26,065 Total current assets — 1,098,702 333,639 181,261 (23,567 ) 1,590,035 Property and equipment, at cost, net — 577,936 342,356 73,945 — 994,237 Investments 321,083 1,770,303 901,772 941,396 (3,809,602 ) 124,952 Goodwill — — 1,256,662 35,043 (112 ) 1,291,593 Service contracts, net — 81,462 13 2,240 — 83,715 Other assets, net 1,081,203 4,665 3,526,051 9,110 (4,601,168 ) 19,861 $ 1,402,286 $ 3,533,068 $ 6,360,493 $ 1,242,995 $ (8,434,449 ) $ 4,104,393 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,408,002 ) $ 1,932,977 $ 16,781 $ 38,005 $ 114,514 Accrued compensation and related liabilities — 70,045 26,551 5,380 — 101,976 Accrued liabilities — 82,770 252,717 13,578 — 349,065 Long-term debt due within one year — 250,000 — — — 250,000 Total current liabilities (465,247 ) (1,005,187 ) 2,212,245 35,739 38,005 815,555 Long-term liabilities: Long-term debt due after one year — 1,049,610 — 390 — 1,050,000 Deferred income taxes — (427 ) 252,149 7,753 — 259,475 Accrued liabilities — 19,628 116,091 985 — 136,704 Total long-term liabilities — 1,068,811 368,240 9,128 — 1,446,179 Total shareholders' equity 1,867,533 3,469,444 3,780,008 1,198,128 (8,472,454 ) 1,842,659 $ 1,402,286 $ 3,533,068 $ 6,360,493 $ 1,242,995 $ (8,434,449 ) $ 4,104,393 Condensed Consolidating Balance Sheet As of May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 74,145 $ 249,203 $ 93,725 $ — $ 417,073 Marketable securities — — — 16,081 — 16,081 Accounts receivable, net — 358,560 104,964 32,606 — 496,130 Inventories, net — 193,594 21,149 8,870 2,598 226,211 Uniforms and other rental items in service — 399,017 117,473 36,478 (18,963 ) 534,005 Income taxes, current — 1,191 (339 ) 84 — 936 Assets held for sale — 21,341 — — — 21,341 Prepaid expenses and other current assets — 5,514 17,492 1,024 — 24,030 Total current assets — 1,053,362 509,942 188,868 (16,365 ) 1,735,807 Property and equipment, at cost, net — 523,690 275,072 72,659 — 871,421 Investments 321,083 1,956,320 895,393 956,461 (3,799,565 ) 329,692 Goodwill — — 1,180,527 15,197 (112 ) 1,195,612 Service contracts, net — 42,400 34 — — 42,434 Other assets, net 1,154,596 12,373 2,741,950 3,572 (3,894,997 ) 17,494 $ 1,475,679 $ 3,588,145 $ 5,602,918 $ 1,236,757 $ (7,711,039 ) $ 4,192,460 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (877,042 ) $ 1,391,999 $ 21,876 $ 38,021 $ 109,607 Accrued compensation and related liabilities — 59,752 23,989 4,682 — 88,423 Accrued liabilities — 65,022 232,500 13,137 (724 ) 309,935 Liabilities held for sale — 704 — — — 704 Long-term debt due within one year — 293 (293 ) — — — Total current liabilities (465,247 ) (751,271 ) 1,648,195 39,695 37,297 508,669 Long-term liabilities: Long-term debt due after one year — 1,308,452 (9,766 ) 590 724 1,300,000 Deferred income taxes — (304 ) 333,929 5,702 — 339,327 Accrued liabilities — — 111,105 904 — 112,009 Total long-term liabilities — 1,308,148 435,268 7,196 724 1,751,336 Total shareholders' equity 1,940,926 3,031,268 3,519,455 1,189,866 (7,749,060 ) 1,932,455 $ 1,475,679 $ 3,588,145 $ 5,602,918 $ 1,236,757 $ (7,711,039 ) $ 4,192,460 |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2016 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 693,520 $ 388,049 $ 308,750 $ 3,905 $ (700,704 ) $ 693,520 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 96,885 43,441 9,365 — 149,691 Amortization of intangible assets — 14,830 304 454 — 15,588 Stock-based compensation 79,293 — — — — 79,293 Gain on Storage transactions — (12,547 ) — (3,239 ) — (15,786 ) Loss on Shred-it — 22,470 — 1,818 — 24,288 (Gain) loss on sale of Shred-it — (388,930 ) — 10,571 — (378,359 ) Deferred income taxes — (83,648 ) 22,025 2,321 — (59,302 ) Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (30,570 ) (20,007 ) (2,185 ) — (52,762 ) Inventories, net — (23,917 ) 2,011 (2,454 ) 6,443 (17,917 ) Uniforms and other rental items in service — (10,329 ) 5,104 (1,840 ) 759 (6,306 ) Prepaid expenses and other current assets — (142 ) (939 ) 116 — (965 ) Accounts payable — (461,203 ) 465,539 (4,884 ) (16 ) (564 ) Accrued compensation and related liabilities — 9,959 2,982 571 — 13,512 Accrued liabilities and other — (2,926 ) 24,761 155 724 22,714 Income taxes, current — 1,342 (1,565 ) (577 ) — (800 ) Net cash provided by (used in) operating activities 772,813 (480,677 ) 852,406 14,097 (692,794 ) 465,845 Cash flows from investing activities: Capital expenditures — (151,063 ) (111,392 ) (12,930 ) — (275,385 ) Proceeds from redemption of marketable securities — — — 434,179 — 434,179 Purchase of marketable securities and investments — (3,333 ) (12,085 ) (488,765 ) 10,037 (494,146 ) Proceeds from Storage transactions, net of cash contributed — 32,099 — 3,239 — 35,338 Proceeds from sale of Shred-it — 568,223 — 12,614 — 580,837 Acquisitions of businesses, net of cash acquired — (130,786 ) — (25,793 ) — (156,579 ) Other 94,344 154,412 (929,997 ) 1,897 683,481 4,137 Net cash provided by (used in) investing activities 94,344 469,552 (1,053,474 ) (75,559 ) 693,518 128,381 Cash flows from financing activities: Proceeds from the issuances of debt — — (165 ) 165 — — Repayment of debt — (9,151 ) 10,224 (365 ) (724 ) (16 ) Proceeds from exercise of stock-based compensation awards 28,226 — — — — 28,226 Dividends paid (115,232 ) — — (41 ) — (115,273 ) Repurchase of common stock (780,151 ) — — — — (780,151 ) Other — 1,952 (730 ) (732 ) — 490 Net cash (used in) provided by financing activities (867,157 ) (7,199 ) 9,329 (973 ) (724 ) (866,724 ) Effect of exchange rate changes on cash and cash equivalents — — — (5,218 ) — (5,218 ) Net decrease in cash and cash equivalents — (18,324 ) (191,739 ) (67,653 ) — (277,716 ) Cash and cash equivalents at beginning of year — 74,145 249,203 93,725 — 417,073 Cash and cash equivalents at end of year $ — $ 55,821 $ 57,464 $ 26,072 $ — $ 139,357 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2015 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 430,618 $ 134,861 $ 281,160 $ 17,001 $ (433,022 ) $ 430,618 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 87,186 43,013 10,425 — 140,624 Amortization of intangible assets — 13,972 60 426 — 14,458 Stock-based compensation 47,002 — — — — 47,002 Gain on Storage transactions — (31,113 ) — (7,460 ) — (38,573 ) Loss on Shred-it — 3,190 — 661 — 3,851 Gain on sale of stock of an equity method investment — — (21,739 ) — — (21,739 ) Deferred income taxes — 67 18,565 2,234 — 20,866 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — 4,370 (7,095 ) 1,282 — (1,443 ) Inventories, net — 22,405 (405 ) (487 ) 2,272 23,785 Uniforms and other rental items in service — (24,351 ) (5,006 ) (2,764 ) 127 (31,994 ) Prepaid expenses and other current assets — (345 ) (2,740 ) (117 ) — (3,202 ) Accounts payable — (322,461 ) 289,110 (98 ) 4 (33,445 ) Accrued compensation and related liabilities — 3,171 1,400 (1,337 ) — 3,234 Accrued liabilities and other — (15,829 ) 42,551 6,322 22 33,066 Income taxes, current — 358 (6,155 ) (1,035 ) — (6,832 ) Net cash provided by (used in) operating activities 477,620 (124,519 ) 632,719 25,053 (430,597 ) 580,276 Cash flows from investing activities: Capital expenditures — (110,658 ) (92,600 ) (14,462 ) — (217,720 ) Proceeds from redemption of marketable securities — — — 161,938 — 161,938 Purchase of marketable securities and investments — (1,827 ) 38,731 (179,130 ) (53,245 ) (195,471 ) Proceeds from Storage transactions, net of cash contributed — 93,387 — 65,041 — 158,428 Proceeds from Shredding Transaction — 3,344 — — — 3,344 Proceeds from sale of stock of an equity method investment — — 29,933 — — 29,933 Dividends received on equity method investment — — 5,247 — — 5,247 Dividends received on Shred-it — 113,400 — — — 113,400 Acquisitions of businesses, net of cash acquired — (15,495 ) — — — (15,495 ) Other 235,951 42,199 (764,336 ) 3,705 483,864 1,383 Net cash provided by (used in) investing activities 235,951 124,350 (783,025 ) 37,092 430,619 44,987 Cash flows from financing activities: Proceeds from the issuance of debt — — (2,615 ) 2,615 — — Repayment of debt — (1,178 ) 2,962 (2,280 ) (22 ) (518 ) Proceeds from exercise of stock-based compensation awards 40,230 — — — — 40,230 Dividends paid (201,831 ) — — (60 ) — (201,891 ) Repurchase of common stock (551,970 ) — — — — (551,970 ) Other — 1,952 (363 ) — — 1,589 Net cash (used in) provided by financing activities (713,571 ) 774 (16 ) 275 (22 ) (712,560 ) Effect of exchange rate changes on cash and cash equivalents — — — (8,918 ) — (8,918 ) Net increase (decrease) in cash and cash equivalents — 605 (150,322 ) 53,502 — (96,215 ) Cash and cash equivalents at beginning of year — 73,540 399,525 40,223 — 513,288 Cash and cash equivalents at end of year $ — $ 74,145 $ 249,203 $ 93,725 $ — $ 417,073 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2014 Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 374,442 $ 162,263 $ 205,009 $ 20,809 $ (388,081 ) $ 374,442 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation — 110,100 44,856 13,264 — 168,220 Amortization of intangible assets — 20,547 153 1,942 — 22,642 Stock-based compensation 29,875 — — — — 29,875 (Gain) loss on Shred-it — (113,511 ) — 5,070 — (108,441 ) Shredding Transaction asset impairment charge — — 16,143 — — 16,143 Shredding Transaction costs — — 26,057 — — 26,057 Deferred income taxes — (2 ) 47,373 (262 ) — 47,109 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (53,053 ) (1,300 ) (1,878 ) — (56,231 ) Inventories, net — (14,735 ) 4,839 450 (1,616 ) (11,062 ) Uniforms and other rental items in service — (11,004 ) 557 (973 ) (15 ) (11,435 ) Prepaid expenses and other current assets — (386 ) (1,844 ) 53 — (2,177 ) Accounts payable — 25,573 23,246 (18,374 ) 1 30,446 Accrued compensation and related liabilities — 5,778 4,947 206 — 10,931 Accrued liabilities and other — 50,008 4,897 (689 ) 21 54,237 Income taxes, current — 2,621 9,902 2,690 — 15,213 Net cash provided by operating activities 404,317 184,199 384,835 22,308 (389,690 ) 605,969 Cash flows from investing activities: Capital expenditures — (123,978 ) (9,591 ) (12,011 ) — (145,580 ) Proceeds from redemption of marketable securities — — 5,659 48,537 — 54,196 Purchase of marketable securities and investments — (151,063 ) (242,956 ) (48,387 ) 378,548 (63,858 ) Proceeds from Shredding Transaction, net of cash contributed — 180,000 — (641 ) — 179,359 Acquisitions of businesses, net of cash acquired — (13,199 ) — (20,242 ) — (33,441 ) Other 13,783 (50,446 ) 8,108 12,173 11,163 (5,219 ) Net cash provided by (used in) investing activities 13,783 (158,686 ) (238,780 ) (20,571 ) 389,711 (14,543 ) Cash flows from financing activities: Proceeds from the issuance of debt — — (2,445 ) 2,445 — — Repayment of debt — (8,436 ) (106 ) 376 (21 ) (8,187 ) Proceeds from exercise of stock-based compensation awards 41,902 — — — — 41,902 Dividends paid (93,293 ) — — (27 ) — (93,320 ) Repurchase of common stock (370,599 ) — — — — (370,599 ) Other 3,890 1,952 8,951 (14,324 ) — 469 Net cash (used in) provided by financing activities (418,100 ) (6,484 ) 6,400 (11,530 ) (21 ) (429,735 ) Effect of exchange rate changes on cash and cash equivalents — — — (676 ) — (676 ) Net increase (decrease) in cash and cash equivalents — 19,029 152,455 (10,469 ) — 161,015 Cash and cash equivalents at beginning of year — 54,511 247,070 50,692 — 352,273 Cash and cash equivalents at end of year $ — $ 73,540 $ 399,525 $ 40,223 $ — $ 513,288 |
Significant Accounting Polici42
Significant Accounting Policies - Narrative (Details) $ in Millions | Jun. 01, 2015segment | Jun. 01, 2015 | May 31, 2015USD ($)segment | May 31, 2016USD ($)customer | May 31, 2014 |
Accounting Policies [Line Items] | |||||
Number of businesses helped (more than) | customer | 900,000 | ||||
Number of reportable segments | segment | 3 | ||||
Restricted cash | $ 43 | $ 50.6 | |||
Goodwill impairment units | 5 | 5 | |||
New Accounting Pronouncement, Early Adoption, Effect | |||||
Accounting Policies [Line Items] | |||||
Deferred tax liabilities, current | $ 112.4 | ||||
Minimum | Service Contacts and Other Assets | |||||
Accounting Policies [Line Items] | |||||
Service contracts and other assets useful lives (years) | 5 years | ||||
Maximum | Service Contacts and Other Assets | |||||
Accounting Policies [Line Items] | |||||
Service contracts and other assets useful lives (years) | 10 years | ||||
All Other | |||||
Accounting Policies [Line Items] | |||||
Goodwill impairment units | 3 | 3 | |||
Uniforms in Service | |||||
Accounting Policies [Line Items] | |||||
Inventories useful life, maximum | 18 months | ||||
Other Rental Items | |||||
Accounting Policies [Line Items] | |||||
Inventories useful life, minimum | 8 months | ||||
Inventories useful life, maximum | 60 months | ||||
Shred-it Partnership | |||||
Accounting Policies [Line Items] | |||||
Equtiy method investment ownership (as a percent) | 42.00% | ||||
Partnership ownership by third party (as a percent) | 58.00% |
Significant Accounting Polici43
Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Accounting Policies [Abstract] | ||
Raw materials | $ 17,794 | $ 16,935 |
Work in process | 14,731 | 17,079 |
Finished goods | 216,837 | 192,197 |
Inventories, net | 249,362 | 226,211 |
Inventory obsolescence reserve | $ 32,900 | $ 30,700 |
Significant Accounting Polici44
Significant Accounting Policies - Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
May 31, 2016 | |
Minimum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 30 years |
Minimum | Building improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 5 years |
Minimum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 3 years |
Minimum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 2 years |
Maximum | Buildings | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 40 years |
Maximum | Building improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 20 years |
Maximum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 10 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful lives | 15 years |
Significant Accounting Polici45
Significant Accounting Policies - Current Accrued Liabilities (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Accounting Policies [Abstract] | ||
General insurance liabilities | $ 128,759 | $ 113,714 |
Employee benefit related liabilities | 75,587 | 68,907 |
Taxes and related liabilities | 5,783 | 6,064 |
Accrued interest | 26,682 | 26,628 |
Other | 112,254 | 94,622 |
Accrued liabilities | $ 349,065 | $ 309,935 |
Fair Value Disclosures - Financ
Fair Value Disclosures - Financial Instruments on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Fair value on a recurring basis | ||
Cash and cash equivalents | $ 139,357 | $ 417,073 |
Total assets at fair value | 209,762 | 433,154 |
Total liabilities at fair value | 19,628 | |
Canadian treasury securities | ||
Fair value on a recurring basis | ||
Marketable securities | 70,405 | 16,081 |
Interest rate lock agreement | ||
Fair value on a recurring basis | ||
Interest rate lock agreement | 19,628 | |
Level 1 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 139,357 | 417,073 |
Total assets at fair value | 139,357 | 417,073 |
Total liabilities at fair value | 0 | |
Level 1 | Canadian treasury securities | ||
Fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 1 | Interest rate lock agreement | ||
Fair value on a recurring basis | ||
Interest rate lock agreement | 0 | |
Level 2 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 70,405 | 16,081 |
Total liabilities at fair value | 19,628 | |
Level 2 | Canadian treasury securities | ||
Fair value on a recurring basis | ||
Marketable securities | 70,405 | 16,081 |
Level 2 | Interest rate lock agreement | ||
Fair value on a recurring basis | ||
Interest rate lock agreement | 19,628 | |
Level 3 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Total liabilities at fair value | 0 | |
Level 3 | Canadian treasury securities | ||
Fair value on a recurring basis | ||
Marketable securities | 0 | $ 0 |
Level 3 | Interest rate lock agreement | ||
Fair value on a recurring basis | ||
Interest rate lock agreement | $ 0 |
Fair Value Disclosures - Narrat
Fair Value Disclosures - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Fair Value Disclosures [Abstract] | |||
Amortized cost basis, marketable securities | $ 70.4 | $ 16.1 | |
Marketable securities purchased | $ 488.8 | $ 179.2 | $ 48.5 |
Contractual maturities (less than) | 1 year | 1 year |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,413,572,000 | $ 2,194,278,000 | |
Less: accumulated depreciation | 1,419,335,000 | 1,322,857,000 | |
Property, plant and equipment, net | 994,237,000 | 871,421,000 | |
Capitalized interest | 1,100,000 | 600,000 | $ 0 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 117,881,000 | 116,172,000 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 509,316,000 | 501,742,000 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,584,478,000 | 1,446,041,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 28,530,000 | 26,023,000 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 173,367,000 | $ 104,300,000 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2014 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Investments [Abstract] | ||||
Investments | $ 124,952,000 | $ 329,692,000 | ||
Cash surrender value of life insurance policies | 108,100,000 | 101,800,000 | ||
Equity method investments | 14,500,000 | 225,700,000 | ||
Cost method investments | 2,400,000 | 2,200,000 | ||
Dividends received on equity method investment | 0 | 5,247,000 | $ 0 | |
Cash received from sale of equity method investment | 35,200,000 | |||
Gain on sale of stock of an equity method investment, net of tax | $ 13,600,000 | 13,600,000 | ||
Losses due to impairment | $ 0 | $ 0 | $ 0 |
Goodwill, Service Contracts a50
Goodwill, Service Contracts and Other Assets - Narrative (Details) $ in Thousands | Jun. 01, 2015segment | Jun. 01, 2015 | May 31, 2016USD ($)transaction | May 31, 2015USD ($) | May 31, 2014USD ($) |
Finite-Lived Intangible Assets [Line Items] | |||||
Number of transactions involved in sale of business | transaction | 3 | ||||
Goodwill impairment units | 5 | 5 | |||
Goodwill | $ 1,291,593 | $ 1,195,612 | $ 1,267,411 | ||
Continuing Operations | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 15,600 | 13,700 | $ 15,200 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Estimated amortization expense, year one | 13,800 | ||||
Estimated amortization expense, year two | 12,300 | ||||
Estimated amortization expense, year three | 11,700 | ||||
Estimated amortization expense, year four | 11,300 | ||||
Estimated amortization expense, year five | $ 9,400 | ||||
All Other | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment units | 3 | 3 | |||
Goodwill | 96,700 | ||||
Uniform Rental and Facility Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 943,900 | ||||
First Aid and Safety Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 155,000 |
Goodwill, Service Contracts a51
Goodwill, Service Contracts and Other Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 1,195,612 | $ 1,267,411 |
Goodwill acquired | 97,097 | 8,648 |
Goodwill divested in Storage Transactions | (75,660) | |
Foreign currency translation | (1,116) | 4,787 |
Balance at the end of the period | 1,291,593 | 1,195,612 |
Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 943,900 | |
Balance at the end of the period | 943,900 | |
First Aid and Safety Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 155,000 | |
Balance at the end of the period | 155,000 | |
All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 96,700 | |
Balance at the end of the period | 96,700 | |
Operating Segments | Rental Uniforms & Ancillary Products | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 941,445 | 943,516 |
Goodwill acquired | 70 | |
Goodwill divested in Storage Transactions | 0 | |
Foreign currency translation | 2,141 | |
Balance at the end of the period | 941,445 | |
Operating Segments | Uniform Direct Sales | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 23,678 | 23,905 |
Goodwill acquired | 0 | |
Goodwill divested in Storage Transactions | 0 | |
Foreign currency translation | 227 | |
Balance at the end of the period | 23,678 | |
Operating Segments | First Aid, Safety & Fire Protection | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 230,489 | 221,911 |
Goodwill acquired | 8,578 | |
Goodwill divested in Storage Transactions | 0 | |
Foreign currency translation | 0 | |
Balance at the end of the period | 230,489 | |
Operating Segments | Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 943,909 | |
Goodwill acquired | 10,020 | |
Foreign currency translation | (713) | |
Balance at the end of the period | 953,216 | 943,909 |
Operating Segments | First Aid and Safety Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 154,954 | |
Goodwill acquired | 86,874 | |
Foreign currency translation | (380) | |
Balance at the end of the period | 241,448 | 154,954 |
Operating Segments | All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 96,749 | |
Goodwill acquired | 203 | |
Foreign currency translation | (23) | |
Balance at the end of the period | 96,929 | 96,749 |
Corporate | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 0 | 78,079 |
Goodwill acquired | 0 | |
Goodwill divested in Storage Transactions | (75,660) | |
Foreign currency translation | 2,419 | |
Balance at the end of the period | 0 | |
Rental Uniforms & Ancillary Products | Operating Segments | Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 929,400 | |
Balance at the end of the period | 929,400 | |
Rental Uniforms & Ancillary Products | Operating Segments | All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 12,000 | |
Balance at the end of the period | 12,000 | |
Uniform Direct Sales | Operating Segments | Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 14,500 | |
Balance at the end of the period | 14,500 | |
Uniform Direct Sales | Operating Segments | All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 9,200 | |
Balance at the end of the period | 9,200 | |
First Aid, Safety & Fire Protection | Operating Segments | First Aid and Safety Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 155,000 | |
Balance at the end of the period | 155,000 | |
First Aid, Safety & Fire Protection | Operating Segments | All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 75,500 | |
Balance at the end of the period | $ 75,500 |
Goodwill, Service Contracts a52
Goodwill, Service Contracts and Other Assets - Changes in Carrying Amount of Service Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | $ 42,434 | $ 55,675 |
Service contracts acquired | 55,694 | 10,121 |
Service contracts divested in Storage Transactions | (9,570) | |
Service contracts amortization | (14,392) | (13,221) |
Foreign currency translation | (21) | 571 |
Balance at the end of the period | 83,715 | 42,434 |
Corporate | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 0 | 10,470 |
Service contracts acquired | 265 | |
Service contracts divested in Storage Transactions | (9,570) | |
Service contracts amortization | (597) | |
Foreign currency translation | 568 | |
Balance at the end of the period | 0 | |
Operating Segments | Rental Uniforms & Ancillary Products | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 11,862 | 17,171 |
Service contracts acquired | 313 | |
Service contracts divested in Storage Transactions | 0 | |
Service contracts amortization | (5,619) | |
Foreign currency translation | 3 | |
Balance at the end of the period | 11,862 | |
Operating Segments | Uniform Direct Sales | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 0 | 0 |
Service contracts acquired | 0 | |
Service contracts divested in Storage Transactions | 0 | |
Service contracts amortization | 0 | |
Foreign currency translation | 0 | |
Balance at the end of the period | 0 | |
Operating Segments | First Aid, Safety & Fire Protection | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 30,572 | 28,034 |
Service contracts acquired | 9,543 | |
Service contracts divested in Storage Transactions | 0 | |
Service contracts amortization | (7,005) | |
Foreign currency translation | 0 | |
Balance at the end of the period | 30,572 | |
Operating Segments | Uniform Rental and Facility Services | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 6,677 | |
Service contracts acquired | 18,912 | |
Service contracts amortization | (4,398) | |
Foreign currency translation | 0 | |
Balance at the end of the period | 21,191 | 6,677 |
Operating Segments | First Aid and Safety Services | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 1,576 | |
Service contracts acquired | 34,052 | |
Service contracts amortization | (3,355) | |
Foreign currency translation | (21) | |
Balance at the end of the period | 32,252 | 1,576 |
Operating Segments | All Other | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 34,181 | |
Service contracts acquired | 2,730 | |
Service contracts amortization | (6,639) | |
Foreign currency translation | 0 | |
Balance at the end of the period | $ 30,272 | $ 34,181 |
Goodwill, Service Contracts a53
Goodwill, Service Contracts and Other Assets - Information Regarding Service Contracts and Other Assets (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 | May 31, 2014 |
Information regarding service contracts and other assets | |||
Service contracts, net | $ 83,715 | $ 42,434 | $ 55,675 |
Other assets, carrying amount | 70,321 | 65,423 | |
Other assets, accumulated amortization | 50,460 | 47,929 | |
Other assets, net | 19,861 | 17,494 | |
Service contracts | |||
Information regarding service contracts and other assets | |||
Service contracts, carrying amount | 395,482 | 340,816 | |
Service contracts, accumulated amortization | 311,767 | 298,382 | |
Service contracts, net | 83,715 | 42,434 | |
Noncompete and consulting agreements | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 42,378 | 41,828 | |
Other assets, accumulated amortization | 40,928 | 40,379 | |
Other assets, net | 1,450 | 1,449 | |
Other | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 27,943 | 23,595 | |
Other assets, accumulated amortization | 9,532 | 7,550 | |
Other assets, net | $ 18,411 | $ 16,045 |
Long-Term Debt and Derivative54
Long-Term Debt and Derivatives - Schedule of Debt (Details) - Term Notes Due Through 2036 - Unsecured Debt - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 |
Debt Instrument [Line Items] | ||
Unsecured term notes due through 2036 at an average rate of 4.6% | $ 1,300,000 | $ 1,300,000 |
Less: amounts due within one year | 250,000 | 0 |
Long-term debt due after one year | $ 1,050,000 | $ 1,300,000 |
Average interest rate | 4.60% | 4.60% |
Long-Term Debt and Derivative55
Long-Term Debt and Derivatives - Narrative (Details) - USD ($) | Jun. 01, 2016 | Jun. 30, 2016 | May 31, 2016 | May 31, 2015 | May 31, 2014 | Feb. 29, 2016 |
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding, amount | $ 83,400,000 | $ 82,700,000 | ||||
Interest paid | 64,500,000 | 65,300,000 | $ 65,900,000 | |||
Commercial paper program availability | 300,000,000 | |||||
Revolving credit facility, maximum borrowing capacity with accordion feature | 600,000,000 | |||||
Proceeds from issuance of commercial paper | $ 218,500,000 | |||||
Commercial paper outstanding | 0 | 0 | ||||
Borrowings on revolving credit facility | 0 | 0 | ||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Maturities of long term debt, next twelve months | 250,000,000 | |||||
Maturities of long term debt, year two | 300,000,000 | |||||
Maturities of long term debt, year three | 0 | |||||
Maturities of long term debt, year four | 0 | |||||
Maturities of long term debt, year five | 0 | |||||
Other comprehensive Income | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of interest rate lock agreements | 2,000,000 | 2,000,000 | $ 2,000,000 | |||
Treasury Lock | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate lock agreement, notional value | $ 550,000,000 | |||||
Treasury Lock | Other Noncurrent Liabilities | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate lock agreement, fair value | 19,600,000 | |||||
Term Notes Due Through 2036 | Unsecured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured term notes due through 2036 at an average rate of 4.6% | 1,300,000,000 | 1,300,000,000 | ||||
Long-term debt, fair value | 1,416,600,000 | $ 1,418,600,000 | ||||
Debt Amendment June 2016 | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility, maximum borrowing capacity with accordion feature | $ 450,000,000 | |||||
Subsequent Event | Term Notes Due Through 2036 | Unsecured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Refinanced debt | $ 250,000,000 | |||||
Term of debt | 5 years |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating leases minimum payments due, due in year one | $ 30.5 | ||
Operating leases minimum payments due, due in two years | 26.8 | ||
Operating leases minimum payments due, due in three years | 20.8 | ||
Operating leases minimum payments due, due in four years | 16.5 | ||
Operating leases minimum payments due, due in five years | 12.5 | ||
Operating leases minimum payments due, due thereafter | 26.9 | ||
Continuing Operations | |||
Operating Leased Assets [Line Items] | |||
Operating lease rent expense | $ 41.5 | $ 34.9 | $ 32.3 |
Minimum | |||
Operating Leased Assets [Line Items] | |||
Operating leases renewal option period | 1 year | ||
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating leases renewal option period | 10 years |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Income before income taxes for continuing operations consists of the following components: | |||
U.S. operations | $ 697,974 | $ 635,270 | $ 519,386 |
Foreign operations | 20,148 | 18,054 | 17,741 |
Income before income taxes from continuing operations | $ 718,122 | $ 653,324 | $ 537,127 |
Income Taxes - Components of 58
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Income tax expense for continuing operations consists of the following components: | |||
Federal | $ 284,046 | $ 203,202 | $ 139,102 |
State and local | 25,926 | 25,346 | 18,286 |
Current income tax expense | 309,972 | 228,548 | 157,388 |
Deferred | (48,791) | 14,255 | 41,967 |
Income taxes | $ 261,181 | $ 242,803 | $ 199,355 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense Using the Statutory Rate and Actual Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows: | |||
Income taxes at the U.S. federal statutory rate | $ 251,352 | $ 228,727 | $ 187,375 |
State and local income taxes, net of federal benefit | 16,672 | 16,705 | 17,934 |
Other | (6,843) | (2,629) | (5,954) |
Income taxes | $ 261,181 | $ 242,803 | $ 199,355 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 | May 31, 2014 |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 7,416 | $ 4,857 | |
Inventory obsolescence | 13,702 | 12,266 | |
Insurance and contingencies | 42,717 | 38,522 | |
Stock-based compensation | 45,720 | 29,910 | |
Foreign related carry-forwards | 17,883 | 16,862 | |
Treasury locks | 12,055 | 5,829 | |
Other | 8,100 | 9,461 | |
Deferred tax assets, gross | 147,593 | 117,707 | |
Valuation allowance | (17,047) | (14,690) | $ (13,358) |
Deferred tax assets, net | 130,546 | 103,017 | |
Deferred tax liabilities: | |||
In service inventory | 172,704 | 169,629 | |
Property | 93,784 | 77,871 | |
Intangibles | 104,585 | 84,218 | |
Investment in partnerships | 2,563 | 86,098 | |
State taxes and other | 16,385 | 24,528 | |
Deferred tax liabilities | 390,021 | 442,344 | |
Net deferred tax liability | $ 259,475 | $ 339,327 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Movement in Valuation Allowance [Roll Forward] | ||
Balance at beginning of period | $ (14,690) | $ (13,358) |
Additions | (3,437) | (2,433) |
Subtractions | 1,080 | 1,101 |
Balance at end of period | $ (17,047) | $ (14,690) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 452.6 | $ 236.7 | $ 172.5 |
Undistributed earnings of foreign subsidiaries | 117.2 | 147.1 | 172.7 |
Unrecognized tax benefits that would impact effective tax rates if recognized | 12.9 | 11.9 | |
Unrecognized tax benefits, interest and penalties accrued | 1.1 | 0.9 | |
Unrecognized tax benefits period increase (decrease) | 0.8 | 1.4 | (0.2) |
Unrecognized tax benefits, increase (decrease) in accrued interest | 0.2 | $ 0.2 | $ (0.4) |
Decrease in unrecognized tax benefits reasonably possible in the next twelve months | $ 3.1 |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Balance at beginning of period | $ 15,412 | $ 13,062 | $ 13,709 |
Additions for tax positions of prior years | 3,259 | 4,001 | 2,586 |
Settlements | (48) | (48) | (1,270) |
Statute expirations | (2,092) | (1,603) | (1,963) |
Balance at end of period | $ 16,531 | $ 15,412 | $ 13,062 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) $ in Millions | Aug. 01, 2015USD ($) | May 31, 2016transactionsegment_business | May 31, 2015segment_business |
Business Acquisition [Line Items] | |||
Number of transactions involved in sale of business | transaction | 3 | ||
Series of Business Acquisitions | Uniform Rental and Facility Services | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | segment_business | 2 | 1 | |
Series of Business Acquisitions | First Aid and Safety Services | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | segment_business | 2 | 3 | |
Series of Business Acquisitions | All Other | |||
Business Acquisition [Line Items] | |||
Number of businesses acquired | segment_business | 6 | 8 | |
ZEE | |||
Business Acquisition [Line Items] | |||
Fair value of consideration | $ | $ 134 | ||
Business acquisition, consideration | $ | 120.6 | ||
Contingent consideration | $ | $ 13.4 | ||
Service Contracts | ZEE | |||
Business Acquisition [Line Items] | |||
Service contracts and other assets useful lives (years) | 10 years | ||
Level 3 | ZEE | |||
Business Acquisition [Line Items] | |||
Discount rate income approach (as a percent) | 11.00% |
Acquisitions and Divestitures65
Acquisitions and Divestitures - Aggregate Purchase Price for Businesses Acquired (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 | May 31, 2014 |
Business Acquisition [Line Items] | |||
Net goodwill recognized | $ 1,291,593 | $ 1,195,612 | $ 1,267,411 |
Series of Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Fair value of tangible assets acquired | 26,759 | 177 | |
Net goodwill recognized | 97,097 | 8,648 | |
Total fair value of assets acquired | 184,189 | 19,626 | |
Fair value of liabilities assumed and incurred | 27,610 | 4,131 | |
Total cash paid for acquisitions | 156,579 | 15,495 | |
Series of Business Acquisitions | Service Contracts | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | 55,694 | 9,856 | |
Series of Business Acquisitions | Other Intangibles | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 4,639 | $ 945 |
Acquisitions and Divestitures66
Acquisitions and Divestitures - ZEE Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands | May 31, 2016 | Aug. 01, 2015 | May 31, 2015 | May 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,291,593 | $ 1,195,612 | $ 1,267,411 | |
ZEE | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 333 | |||
Accounts receivable | 16,705 | |||
Inventory | 5,987 | |||
Other current assets | 1,443 | |||
Property, plant and equipment | 849 | |||
Goodwill | 86,392 | |||
Accounts payable | (7,195) | |||
Accrued liabilities | (4,428) | |||
Deferred income taxes | (4,586) | |||
Total consideration | 134,000 | |||
ZEE | Service Contracts | ||||
Business Acquisition [Line Items] | ||||
Intangible assets other than goodwill | 34,000 | |||
ZEE | Other Intangibles | ||||
Business Acquisition [Line Items] | ||||
Intangible assets other than goodwill | $ 4,500 |
Defined Contribution Plans - Na
Defined Contribution Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
401(k) Savings | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Required years of service for plan eligibility (years) | 1 year | ||
Defined contribution plan, total contributions | $ 43.1 | $ 38.4 | $ 33.7 |
Deferred Profit Sharing Plan (DPSP) | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, total contributions | 1.6 | 1.5 | 1.6 |
Supplemental Executive Retirement Plan (SERP) | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, total contributions | $ 6.6 | $ 6.1 | $ 6 |
Earnings per Share - Computatio
Earnings per Share - Computation of Basic Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | [1] | Feb. 28, 2015 | [1] | Nov. 30, 2014 | [1] | Aug. 31, 2014 | [1],[2] | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Basic Earnings per Share from Continuing Operations | |||||||||||||||
Income from continuing operations | $ 118,011 | $ 117,279 | $ 115,453 | $ 106,198 | $ 100,584 | $ 100,331 | $ 103,701 | $ 105,905 | $ 456,941 | $ 410,521 | $ 337,772 | ||||
Less: income from continuing operations allocated to participating securities | 7,405 | 3,900 | 3,082 | ||||||||||||
Income from continuing operations available to common shareholders | $ 449,536 | $ 406,621 | $ 334,690 | ||||||||||||
Basic weighted average common shares outstanding (shares) | 106,136 | 107,843 | 108,301 | 110,597 | 113,666 | 116,178 | 117,115 | 116,659 | 108,221 | 115,900 | 120,377 | ||||
Basic earnings per share: | |||||||||||||||
Basic earnings (loss) per share, continuing operations (dollars per share) | $ 1.09 | $ 1.07 | $ 1.05 | $ 0.94 | $ 0.87 | $ 0.86 | $ 0.88 | $ 0.90 | $ 4.15 | $ 3.51 | $ 2.78 | ||||
[1] | The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | ||||||||||||||
[2] | During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $13.6 million. |
Earnings per Share - Computat69
Earnings per Share - Computation of Diluted Earnings Per Share For Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | [1] | Feb. 28, 2015 | [1] | Nov. 30, 2014 | [1] | Aug. 31, 2014 | [1],[2] | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Diluted Earnings per Share from Continuing Operations | |||||||||||||||
Income from continuing operations | $ 118,011 | $ 117,279 | $ 115,453 | $ 106,198 | $ 100,584 | $ 100,331 | $ 103,701 | $ 105,905 | $ 456,941 | $ 410,521 | $ 337,772 | ||||
Less: income from continuing operations allocated to participating securities | 7,405 | 3,900 | 3,082 | ||||||||||||
Income from continuing operations available to common shareholders | $ 449,536 | $ 406,621 | $ 334,690 | ||||||||||||
Basic weighted average common shares outstanding (shares) | 106,136 | 107,843 | 108,301 | 110,597 | 113,666 | 116,178 | 117,115 | 116,659 | 108,221 | 115,900 | 120,377 | ||||
Effect of dilutive securities - employee stock options (shares) | 1,735 | 1,643 | 1,263 | ||||||||||||
Diluted weighted average common shares outstanding (shares) | 109,956 | 117,543 | 121,640 | ||||||||||||
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share from continuing operations (dollars per share) | $ 1.08 | $ 1.05 | $ 1.03 | $ 0.93 | $ 0.86 | $ 0.85 | $ 0.86 | $ 0.89 | $ 4.09 | $ 3.46 | $ 2.75 | ||||
[1] | The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | ||||||||||||||
[2] | During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $13.6 million. |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | 10 Months Ended | 12 Months Ended | |||||
Jun. 30, 2016 | May 31, 2016 | May 31, 2016 | May 31, 2015 | May 31, 2014 | Aug. 04, 2015 | Jan. 13, 2015 | Jul. 30, 2013 | |
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Basic earnings (loss) per share, discontinued operations (dollars per share) | $ 2.15 | $ 0.17 | $ 0.30 | |||||
Diluted earnings (loss) per share, discontinued operations (dollars per share) | $ 2.12 | $ 0.17 | $ 0.30 | |||||
Options granted excluded from the computation of diluted earnings per share (shares) | 500 | 600 | 700 | |||||
Stock purchased under share buyback (shares) | 5,700 | |||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 87.89 | |||||||
Total purchase price of shares repurchased | $ 780,151,000 | $ 551,970,000 | $ 370,599,000 | |||||
Employee Payroll Taxes Due on Restricted Stock Awards | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Stock purchased under share buyback (shares) | 200 | 200 | ||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 86.07 | $ 64.58 | ||||||
Total purchase price of shares repurchased | $ 20,900,000 | $ 14,400,000 | ||||||
July 30, 2013 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 500,000,000 | |||||||
Stock purchased under share buyback (shares) | 0 | 3,981 | ||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 0 | $ 75.49 | ||||||
Total purchase price of shares repurchased | $ 0 | $ 300,500,000 | ||||||
January 13, 2015 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 500,000,000 | |||||||
Stock purchased under share buyback (shares) | 3,078 | 2,870 | ||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 85.44 | $ 82.60 | ||||||
Total purchase price of shares repurchased | $ 262,928,000 | $ 237,072,000 | ||||||
August 4, 2015 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||||
Stock purchased under share buyback (shares) | 5,649 | 0 | ||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 87.85 | $ 0 | ||||||
Total purchase price of shares repurchased | $ 496,309,000 | $ 0 | ||||||
August 4, 2015 | Subsequent Event | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Stock purchased under share buyback (shares) | 100 | |||||||
Stock purchased under share buyback, average price per share (dollars per share) | $ 94.09 | |||||||
Total purchase price of shares repurchased | $ 3,700,000 |
Earnings per Share - Summary of
Earnings per Share - Summary of Buyback Activity by Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 10 Months Ended | 12 Months Ended | ||
May 31, 2016 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Shares | 5,700 | |||
Avg. Price per Share (dollars per share) | $ 87.89 | |||
Purchase Price | $ 780,151 | $ 551,970 | $ 370,599 | |
Share Repurchase Programs | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares | 8,727 | 6,851 | ||
Avg. Price per Share (dollars per share) | $ 87 | $ 78.47 | ||
Purchase Price | $ 759,237 | $ 537,572 | ||
July 30, 2013 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares | 0 | 3,981 | ||
Avg. Price per Share (dollars per share) | $ 0 | $ 75.49 | ||
Purchase Price | $ 0 | $ 300,500 | ||
January 13, 2015 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares | 3,078 | 2,870 | ||
Avg. Price per Share (dollars per share) | $ 85.44 | $ 82.60 | ||
Purchase Price | $ 262,928 | $ 237,072 | ||
August 4, 2015 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Shares | 5,649 | 0 | ||
Avg. Price per Share (dollars per share) | $ 87.85 | $ 0 | ||
Purchase Price | $ 496,309 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of stock options granted (dollars per share) | $ 21.60 | $ 20.64 | $ 16.63 |
Intrinsic value of options exercised | $ 48.5 | $ 44.3 | $ 19.8 |
Proceeds from stock options exercised | 28.2 | 40.2 | 41.9 |
Fair value of vested stock options | 11 | 10.9 | 17.7 |
Aggregate intrinsic value of outstanding options | 276.5 | ||
Aggregate intrinsic value of exercisable options | $ 99.7 | ||
Weighted-average remaining contractual term of stock options exercisable | 4 years 8 months 6 days | ||
Unrecognized compensation cost related to unvested stock options and restricted stock | $ 149.4 | ||
Weighted-average period of time unrecognized compensation cost will be recognized | 1 year 11 months 6 days | ||
Stock Compensation Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized under plan (shares) | 21,000,000 | ||
Shares reserved for future issuance (shares) | 7,174,600 | ||
Stock Compensation Plan | Continuing Operations | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation | $ 79.3 | 44.9 | 27.5 |
Stock Compensation Plan | Continuing Operations | Income Taxes | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements | $ 28.9 | $ 16.7 | $ 10.2 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum term after grant options may be exercised | 10 years | ||
Award expiration term | 10 years | ||
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vesting period | 3 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options vesting period | 5 years | ||
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of awards | 3 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Determine Fair Value of Options (Details) - Stock Options | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.00% | 2.00% | 2.00% |
Dividend yield | 1.40% | 1.60% | 1.70% |
Expected volatility of Cintas' common stock | 23.30% | 28.00% | 28.00% |
Expected life of the option in years | 7 years 6 months | 7 years 6 months | 7 years 6 months |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Granted and Outstanding (Details) - $ / shares | 12 Months Ended | |||
May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding, beginning of period (shares) | 7,835,570 | 8,025,794 | 7,885,638 | |
Granted (shares) | 1,739,767 | 1,590,185 | 2,111,649 | |
Canceled (shares) | (235,455) | (486,720) | (699,314) | |
Exercised (shares) | (919,975) | (1,293,689) | (1,272,179) | |
Outstanding, end of period (shares) | 8,419,907 | 7,835,570 | 8,025,794 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Outstanding, beginning of period, Weighted Average Exercise Price (dollars per share) | $ 51.59 | $ 43.12 | $ 37.60 | |
Granted, Weighted Average Exercise Price (dollars per share) | 93.55 | 84.59 | 61.04 | |
Canceled, Weighted Average Exercise Price (dollars per share) | 60.01 | 55.50 | 42.42 | |
Exercised, Weighted Average Exercise Price (dollars per share) | 35.07 | 38.11 | 39.03 | |
Outstanding, end of period, Weighted Average Exercise Price (dollars per share) | $ 61.83 | $ 51.59 | $ 43.12 | |
Number of exercisable options (shares) | 1,649,236 | 1,426,550 | 1,583,413 | 1,815,795 |
Stock-Based Compensation - Info
Stock-Based Compensation - Information Related to Stock Options Outstanding (Details) | 12 Months Ended |
May 31, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 8,419,907 |
Outstanding Options, Average Remaining Option Life | 7 years 6 months 4 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 61.83 |
Exercisable Options, Number Exercisable (shares) | shares | 1,649,236 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 34.32 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 20.29 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 95.09 |
$ 20.29 – $ 37.75 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 1,555,054 |
Outstanding Options, Average Remaining Option Life | 4 years 5 months 8 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 31.22 |
Exercisable Options, Number Exercisable (shares) | shares | 1,122,463 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 29.87 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 20.29 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 37.75 |
37.76 – 47.22 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 2,105,731 |
Outstanding Options, Average Remaining Option Life | 6 years 3 months 29 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 42.33 |
Exercisable Options, Number Exercisable (shares) | shares | 437,534 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 39.91 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 37.76 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 47.22 |
47.23 – 86.09 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 1,824,303 |
Outstanding Options, Average Remaining Option Life | 8 years 2 months 1 day |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 64.90 |
Exercisable Options, Number Exercisable (shares) | shares | 89,239 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 62.96 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 47.23 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 86.09 |
86.10 – 95.09 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 2,934,819 |
Outstanding Options, Average Remaining Option Life | 9 years 6 months 29 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 90.54 |
Exercisable Options, Number Exercisable (shares) | shares | 0 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 0 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 86.10 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 95.09 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards Granted and Outstanding (Details) - Restricted Stock Awards - $ / shares | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Outstanding, beginning of period (shares) | 2,210,113 | 2,158,778 | 2,015,023 |
Granted (shares) | 1,069,748 | 627,033 | 661,514 |
Canceled (shares) | (70,998) | (50,277) | (52,124) |
Vested (shares) | (605,427) | (525,421) | (465,635) |
Outstanding, end of period (shares) | 2,603,436 | 2,210,113 | 2,158,778 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding, Weighted Average Grant Price, beginning of period (dollars per share) | $ 57.60 | $ 45.04 | $ 35.97 |
Granted, Weighted Average Grant Price (dollars per share) | 92.10 | 80.73 | 60.66 |
Canceled, Weighted Average Grant Price (dollars per share) | 65.79 | 49.33 | 37.95 |
Vested, Weighted Average Grant Price (dollars per share) | 38.76 | 34.39 | 28.76 |
Outstanding, Weighted Average Grant Price, end of period (dollars per share) | $ 75.94 | $ 57.60 | $ 45.04 |
Accumulated Other Comprehensi77
Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 1,932,455 | $ 2,192,858 | $ 2,201,492 |
Other comprehensive loss | (16,403) | (36,899) | (9,695) |
Ending Balance | 1,842,659 | 1,932,455 | 2,192,858 |
Foreign Currency | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | 2,987 | 41,525 | |
Other comprehensive loss before reclassifications | (11,933) | (38,538) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 6,472 | 0 | |
Other comprehensive loss | (5,461) | (38,538) | |
Ending Balance | (2,474) | 2,987 | 41,525 |
Unrealized Loss on Derivatives | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (10,626) | (12,615) | |
Other comprehensive loss before reclassifications | (12,156) | 37 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,952 | 1,952 | |
Other comprehensive loss | (10,204) | 1,989 | |
Ending Balance | (20,830) | (10,626) | (12,615) |
Other | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (832) | (482) | |
Other comprehensive loss before reclassifications | (738) | (350) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive loss | (738) | (350) | |
Ending Balance | (1,570) | (832) | (482) |
Other Accumulated Comprehensive Income (Loss) | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (8,471) | 28,428 | 38,123 |
Other comprehensive loss before reclassifications | (24,827) | (38,851) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 8,424 | 1,952 | |
Other comprehensive loss | (16,403) | (36,899) | |
Ending Balance | $ (24,874) | $ (8,471) | $ 28,428 |
Accumulated Other Comprehensi78
Accumulated Other Comprehensive Income (Loss) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - Reclassification out of Accumulated Other Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of interest rate locks | $ (3,130) | $ (3,130) |
Tax benefit | 1,178 | 1,178 |
Amortization of interest rate locks, net of tax | (1,952) | (1,952) |
Cumulative translation adjustment on Shred-it | (10,381) | 0 |
Tax benefit | 3,909 | 0 |
Cumulative translation adjustment on Shred-it | $ (6,472) | $ 0 |
Operating Segment Information79
Operating Segment Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
May 31, 2016USD ($) | Feb. 29, 2016USD ($) | Nov. 30, 2015USD ($) | Aug. 31, 2015USD ($) | May 31, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 30, 2014USD ($) | Aug. 31, 2014USD ($) | May 31, 2016USD ($)segment | May 31, 2015USD ($) | May 31, 2014USD ($) | ||||||
Disclosures related to operating segments | ||||||||||||||||
Number of operating segments | segment | 3 | |||||||||||||||
Revenue | $ 1,271,405 | $ 1,216,083 | $ 1,219,080 | $ 1,198,890 | $ 1,142,583 | $ 1,108,847 | $ 1,123,379 | $ 1,102,077 | $ 4,905,458 | $ 4,476,886 | $ 4,193,844 | |||||
Gross margin | 553,718 | $ 524,608 | $ 527,400 | $ 524,144 | 486,660 | [1] | $ 475,307 | [1] | $ 481,424 | [1] | $ 477,946 | [1],[2] | 2,129,870 | 1,921,337 | 1,749,759 | |
Selling and administrative expenses | 1,348,122 | 1,224,930 | 1,147,039 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | 21,739 | 0 | |||||||||||||
Interest expense, net | 63,626 | 64,822 | 65,593 | |||||||||||||
Income before income taxes | 718,122 | 653,324 | 537,127 | |||||||||||||
Depreciation and amortization | 165,279 | 152,595 | 147,289 | |||||||||||||
Capital expenditures | 275,385 | 217,720 | 145,580 | |||||||||||||
Total assets | 4,104,393 | 4,192,460 | 4,104,393 | 4,192,460 | 4,462,452 | |||||||||||
Operating Segments | Uniform Rental and Facility Services | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 3,777,801 | 3,539,843 | 3,304,635 | |||||||||||||
Gross margin | 1,671,008 | 1,532,211 | 1,382,158 | |||||||||||||
Selling and administrative expenses | 998,069 | 926,176 | 860,311 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 672,939 | 606,035 | 521,847 | |||||||||||||
Depreciation and amortization | 130,822 | 123,577 | 118,828 | |||||||||||||
Capital expenditures | 237,884 | 184,246 | 94,619 | |||||||||||||
Total assets | 3,114,159 | 2,845,326 | 3,114,159 | 2,845,326 | 2,840,809 | |||||||||||
Operating Segments | First Aid and Safety Services | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 461,783 | 326,593 | 294,966 | |||||||||||||
Gross margin | 197,010 | 152,339 | 136,136 | |||||||||||||
Selling and administrative expenses | 147,503 | 107,226 | 96,246 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 49,507 | 45,113 | 39,890 | |||||||||||||
Depreciation and amortization | 16,021 | 9,774 | 8,283 | |||||||||||||
Capital expenditures | 22,364 | 13,589 | 9,195 | |||||||||||||
Total assets | 421,789 | 255,202 | 421,789 | 255,202 | 257,603 | |||||||||||
Operating Segments | All Other | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 665,874 | 610,450 | 594,243 | |||||||||||||
Gross margin | 261,852 | 236,787 | 231,465 | |||||||||||||
Selling and administrative expenses | 202,550 | 191,528 | 190,482 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 59,302 | 45,259 | 40,983 | |||||||||||||
Depreciation and amortization | 18,436 | 19,244 | 20,178 | |||||||||||||
Capital expenditures | 15,137 | 18,983 | 7,370 | |||||||||||||
Total assets | 358,683 | 345,201 | 358,683 | 345,201 | 340,650 | |||||||||||
Corporate | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 0 | 0 | 0 | |||||||||||||
Gross margin | 0 | 0 | 0 | |||||||||||||
Selling and administrative expenses | 0 | 0 | 0 | |||||||||||||
Gain on sale of stock of an equity method investment | 21,739 | |||||||||||||||
Interest expense, net | 63,626 | 64,822 | 65,593 | |||||||||||||
Income before income taxes | (63,626) | (43,083) | (65,593) | |||||||||||||
Depreciation and amortization | 0 | 0 | 0 | |||||||||||||
Capital expenditures | 0 | 902 | 34,396 | |||||||||||||
Total assets | [3] | $ 209,762 | $ 746,731 | $ 209,762 | $ 746,731 | $ 1,023,390 | ||||||||||
[1] | The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | |||||||||||||||
[2] | During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $13.6 million. | |||||||||||||||
[3] | Corporate assets include cash and marketable securities in all periods. Corporate assets as of May 31, 2015 include Shred-it and real estate assets of Storage that were not included in the sale transactions. Corporate assets as of May 31, 2014 include Shred-it and the assets of Storage. |
Quarterly Financial Data (Una80
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |||||
Quarterly Financial Data [Abstract] | |||||||||||||||
Revenue | $ 1,271,405 | $ 1,216,083 | $ 1,219,080 | $ 1,198,890 | $ 1,142,583 | $ 1,108,847 | $ 1,123,379 | $ 1,102,077 | $ 4,905,458 | $ 4,476,886 | $ 4,193,844 | ||||
Gross margin | 553,718 | 524,608 | 527,400 | 524,144 | 486,660 | [1] | 475,307 | [1] | 481,424 | [1] | 477,946 | [1],[2] | 2,129,870 | 1,921,337 | 1,749,759 |
Net income, continuing operations | $ 118,011 | $ 117,279 | $ 115,453 | $ 106,198 | $ 100,584 | [1] | $ 100,331 | [1] | $ 103,701 | [1] | $ 105,905 | [1],[2] | $ 456,941 | $ 410,521 | $ 337,772 |
Basic earnings per share, continuing operations (dollars per share) | $ 1.09 | $ 1.07 | $ 1.05 | $ 0.94 | $ 0.87 | [1] | $ 0.86 | [1] | $ 0.88 | [1] | $ 0.90 | [1],[2] | $ 4.15 | $ 3.51 | $ 2.78 |
Diluted earnings per share from continuing operations (dollars per share) | $ 1.08 | $ 1.05 | $ 1.03 | $ 0.93 | $ 0.86 | [1] | $ 0.85 | [1] | $ 0.86 | [1] | $ 0.89 | [1],[2] | $ 4.09 | $ 3.46 | $ 2.75 |
Weighted average number of shares outstanding (shares) | 106,136 | 107,843 | 108,301 | 110,597 | 113,666 | [1] | 116,178 | [1] | 117,115 | [1] | 116,659 | [1],[2] | 108,221 | 115,900 | 120,377 |
Gain on sale of stock of an equity method investment, net of tax | $ 13,600 | $ 13,600 | |||||||||||||
[1] | The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | ||||||||||||||
[2] | During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $13.6 million. |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2015USD ($) | May 31, 2016USD ($)transaction | May 31, 2015USD ($)transactionbuyer | May 31, 2014USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on Shred-it | $ 378,359 | |||
Equity method investments | $ 225,700 | 14,500 | $ 225,700 | |
Shredding Transaction asset impairment charge | 0 | 0 | $ 16,143 | |
Dividends received on equity method investment | 0 | 5,247 | 0 | |
Proceeds from Shredding transactions, net of cash contributed | 580,837 | 3,344 | 179,359 | |
Gain on disposal of discontinued operations | $ 15,786 | 38,573 | 0 | |
Number of transactions involved in sale of business | transaction | 3 | |||
Proceeds from Storage transactions, net of cash contributed | $ 35,338 | 158,428 | 0 | |
Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on Shred-it | 378,359 | 0 | 0 | |
Gain on disposal of discontinued operations | 15,786 | $ 38,573 | 0 | |
Discontinued Operations | Storage Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on disposal of discontinued operations | 10,900 | |||
Number of transactions involved in sale of business | transaction | 3 | |||
Number of buyers involved in sale of business | buyer | 3 | |||
Proceeds from Storage transactions, net of cash contributed | $ 158,400 | |||
Discontinued Operations, Held-for-sale | Storage Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on disposal of discontinued operations | 4,800 | |||
Proceeds from Storage transactions, net of cash contributed | 24,400 | |||
Shred-it Partnership | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on Shred-it | 4,100 | 106,400 | ||
Fair value of consideration received | 180,000 | |||
Retained non-controlling interest fair value | 339,400 | |||
Equity method investments | 210,100 | 210,100 | $ 413,000 | |
Equtiy method investment ownership (as a percent) | 42.00% | |||
Shredding Transaction asset impairment charge | $ 16,100 | |||
Other transaction costs | 28,500 | |||
Professional and legal fees | 4,700 | |||
Employee termination benefit costs | 700 | |||
Stock compensation expense | 12,400 | |||
Information systems contracts charge | 4,200 | |||
Incremental profit sharing and employee compensation | 6,500 | |||
Equity method investment net gain (loss) | (24,300) | (5,500) | 1,200 | |
Dividends received on equity method investment | 113,400 | 0 | 113,400 | $ 0 |
Equity method investment, difference between carrying value and underlying net assets | $ 94,000 | $ 94,000 | ||
Amortization period | 9 years | |||
Amortization of basis differences | 4,800 | $ 11,000 | ||
Loss related to litigation | $ 1,000 | |||
Proceeds from Shredding transactions, net of cash contributed | 578,300 | |||
Gain on disposal of discontinued operations | 4,300 | |||
Equity method investment, gain contingency | $ 30,000 |
Discontinued Operations - Selec
Discontinued Operations - Selective Unaudited Financial Information for Equity Method Investment (Details) $ in Thousands | 12 Months Ended |
Apr. 30, 2015USD ($) | |
Assets | |
Current assets | $ 150,792 |
Non-current assets | 968,956 |
Liabilities | |
Current liabilities | 73,971 |
Non-current liabilities | 532,673 |
Summary Income Statement Information | |
Net sales | 695,628 |
Gross profit | 432,532 |
Net income | $ 10,385 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on Storage Transactions | $ 15,786 | $ 38,573 | $ 0 | ||
Gain on sale of Shred-it | 378,359 | ||||
Net income from discontinued operations | 236,579 | 20,097 | 36,670 | ||
Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenue | 0 | 31,379 | 357,967 | ||
Income (loss) before income taxes, excluding gains (losses) from sale transactions and investments | 434 | (3,515) | 6,913 | ||
Gain on Storage Transactions | 15,786 | 38,573 | 0 | ||
(Loss) gain on Shred-it | (24,288) | (3,851) | 63,817 | ||
Gain on sale of Shred-it | 378,359 | 0 | 0 | ||
Income tax expense | (133,712) | (11,110) | (34,060) | ||
Net income from discontinued operations | 236,579 | $ 20,097 | [1] | $ 36,670 | [1] |
Discontinued Operations | Storage Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on Storage Transactions | $ 10,900 | ||||
[1] | Results for the fiscal years ended May 31, 2015 and 2014 related to Shred-it and Shredding were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed. |
Supplemental Guarantor Inform84
Supplemental Guarantor Information - Narrative (Details) $ in Millions | May 31, 2016USD ($) |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Long-term senior notes | $ 1,300 |
Supplemental Guarantor Inform85
Supplemental Guarantor Information - Condensed Consolidating Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | May 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |||||
Revenue: | |||||||||||||||
Uniform rental and facility services | $ 3,777,801 | $ 3,539,843 | $ 3,304,635 | ||||||||||||
Other | 1,127,657 | 937,043 | 889,209 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | $ 1,271,405 | $ 1,216,083 | $ 1,219,080 | $ 1,198,890 | $ 1,142,583 | $ 1,108,847 | $ 1,123,379 | $ 1,102,077 | 4,905,458 | 4,476,886 | 4,193,844 | ||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 2,106,793 | 2,007,632 | 1,922,477 | ||||||||||||
Cost of other | 668,795 | 547,917 | 521,608 | ||||||||||||
Selling and administrative expenses | 1,348,122 | 1,224,930 | 1,147,039 | ||||||||||||
Operating income | 781,748 | 696,407 | 602,720 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | 21,739 | 0 | ||||||||||||
Interest income | (896) | (339) | (229) | ||||||||||||
Interest expense (income) | 64,522 | 65,161 | 65,822 | ||||||||||||
Income before income taxes | 718,122 | 653,324 | 537,127 | ||||||||||||
Income taxes | 261,181 | 242,803 | 199,355 | ||||||||||||
Income from continuing operations | $ 118,011 | $ 117,279 | $ 115,453 | $ 106,198 | $ 100,584 | [1] | $ 100,331 | [1] | $ 103,701 | [1] | $ 105,905 | [1],[2] | 456,941 | 410,521 | 337,772 |
Income from discontinued operations, net of tax | 236,579 | 20,097 | 36,670 | ||||||||||||
Net income | 693,520 | 430,618 | 374,442 | ||||||||||||
Eliminations | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | (155,259) | (137,199) | (121,932) | ||||||||||||
Other | (523,233) | (502,037) | (471,688) | ||||||||||||
Equity in net income of affiliates | (456,941) | (410,521) | (337,772) | ||||||||||||
Total revenue | (1,135,433) | (1,049,757) | (931,392) | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | (236,103) | (215,099) | (201,100) | ||||||||||||
Cost of other | (408,046) | (395,355) | (375,971) | ||||||||||||
Selling and administrative expenses | (27,045) | (26,314) | (18,103) | ||||||||||||
Operating income | (464,239) | (412,989) | (336,218) | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | 2 | 2 | 15,271 | ||||||||||||
Interest expense (income) | 0 | 0 | 0 | ||||||||||||
Income before income taxes | (464,241) | (412,991) | (351,489) | ||||||||||||
Income taxes | (116) | (66) | (78) | ||||||||||||
Income from continuing operations | (464,125) | (412,925) | (351,411) | ||||||||||||
Income from discontinued operations, net of tax | (236,579) | (20,097) | (36,670) | ||||||||||||
Net income | (700,704) | (433,022) | (388,081) | ||||||||||||
Cintas Corporation | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 0 | 0 | 0 | ||||||||||||
Other | 0 | 0 | 0 | ||||||||||||
Equity in net income of affiliates | 456,941 | 410,521 | 337,772 | ||||||||||||
Total revenue | 456,941 | 410,521 | 337,772 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 0 | 0 | 0 | ||||||||||||
Cost of other | 0 | 0 | 0 | ||||||||||||
Selling and administrative expenses | 0 | 0 | 0 | ||||||||||||
Operating income | 456,941 | 410,521 | 337,772 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | 0 | 0 | 0 | ||||||||||||
Interest expense (income) | 0 | 0 | 0 | ||||||||||||
Income before income taxes | 456,941 | 410,521 | 337,772 | ||||||||||||
Income taxes | 0 | 0 | 0 | ||||||||||||
Income from continuing operations | 456,941 | 410,521 | 337,772 | ||||||||||||
Income from discontinued operations, net of tax | 236,579 | 20,097 | 36,670 | ||||||||||||
Net income | 693,520 | 430,618 | 374,442 | ||||||||||||
Corp. 2 | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 2,913,812 | 2,699,466 | 2,500,618 | ||||||||||||
Other | 1,576,078 | 1,379,572 | 1,302,715 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 4,489,890 | 4,079,038 | 3,803,333 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 1,709,912 | 1,660,625 | 1,576,226 | ||||||||||||
Cost of other | 1,070,064 | 889,524 | 843,675 | ||||||||||||
Selling and administrative expenses | 1,427,424 | 1,276,745 | 1,172,858 | ||||||||||||
Operating income | 282,490 | 252,144 | 210,574 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | 0 | (12) | (43) | ||||||||||||
Interest expense (income) | 65,534 | 66,298 | 66,461 | ||||||||||||
Income before income taxes | 216,956 | 185,858 | 144,156 | ||||||||||||
Income taxes | 71,323 | 66,498 | 43,327 | ||||||||||||
Income from continuing operations | 145,633 | 119,360 | 100,829 | ||||||||||||
Income from discontinued operations, net of tax | 242,416 | 15,501 | 61,434 | ||||||||||||
Net income | 388,049 | 134,861 | 162,263 | ||||||||||||
Subsidiary Guarantors | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 805,722 | 748,185 | 690,831 | ||||||||||||
Other | 8,542 | 2,159 | 4,192 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 814,264 | 750,344 | 695,023 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 490,383 | 407,505 | 386,556 | ||||||||||||
Cost of other | (41,762) | 16,120 | 16,570 | ||||||||||||
Selling and administrative expenses | (121,514) | (100,024) | (83,765) | ||||||||||||
Operating income | 487,157 | 426,743 | 375,662 | ||||||||||||
Gain on sale of stock of an equity method investment | 21,739 | ||||||||||||||
Interest income | (666) | (250) | (178) | ||||||||||||
Interest expense (income) | (1,027) | (1,134) | (635) | ||||||||||||
Income before income taxes | 488,850 | 449,866 | 376,475 | ||||||||||||
Income taxes | 180,100 | 168,706 | 148,332 | ||||||||||||
Income from continuing operations | 308,750 | 281,160 | 228,143 | ||||||||||||
Income from discontinued operations, net of tax | 0 | 0 | (23,134) | ||||||||||||
Net income | 308,750 | 281,160 | 205,009 | ||||||||||||
Non- Guarantors | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 213,526 | 229,391 | 235,118 | ||||||||||||
Other | 66,270 | 57,349 | 53,990 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 279,796 | 286,740 | 289,108 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 142,601 | 154,601 | 160,795 | ||||||||||||
Cost of other | 48,539 | 37,628 | 37,334 | ||||||||||||
Selling and administrative expenses | 69,257 | 74,523 | 76,049 | ||||||||||||
Operating income | 19,399 | 19,988 | 14,930 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | (232) | (79) | (15,279) | ||||||||||||
Interest expense (income) | 15 | (3) | (4) | ||||||||||||
Income before income taxes | 19,616 | 20,070 | 30,213 | ||||||||||||
Income taxes | 9,874 | 7,665 | 7,774 | ||||||||||||
Income from continuing operations | 9,742 | 12,405 | 22,439 | ||||||||||||
Income from discontinued operations, net of tax | (5,837) | 4,596 | (1,630) | ||||||||||||
Net income | $ 3,905 | $ 17,001 | $ 20,809 | ||||||||||||
[1] | The figures for fiscal 2015 reflect the change in classification of Shred-it to discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | ||||||||||||||
[2] | During the fiscal 2015 first quarter, Cintas recognized a gain on the sale of stock in an equity method investment in the net amount of $13.6 million. |
Supplemental Guarantor Inform86
Supplemental Guarantor Information - Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Condensed Consolidating Financial Statements | |||
Net income | $ 693,520 | $ 430,618 | $ 374,442 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (11,933) | (38,538) | (9,787) |
Cumulative translation adjustment on Shred-it | 6,472 | 0 | 0 |
Change in fair value of derivatives | (12,156) | 37 | (228) |
Amortization of interest rate lock agreements | 1,952 | 1,952 | 1,952 |
Other | (738) | (350) | (1,632) |
Other comprehensive loss | (16,403) | (36,899) | (9,695) |
Comprehensive income | 677,117 | 393,719 | 364,747 |
Eliminations | |||
Condensed Consolidating Financial Statements | |||
Net income | (700,704) | (433,022) | (388,081) |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Cumulative translation adjustment on Shred-it | 0 | ||
Change in fair value of derivatives | 0 | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Other comprehensive loss | 0 | 0 | 0 |
Comprehensive income | (700,704) | (433,022) | (388,081) |
Cintas Corporation | |||
Condensed Consolidating Financial Statements | |||
Net income | 693,520 | 430,618 | 374,442 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Cumulative translation adjustment on Shred-it | 0 | ||
Change in fair value of derivatives | 0 | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Other comprehensive loss | 0 | 0 | 0 |
Comprehensive income | 693,520 | 430,618 | 374,442 |
Corp. 2 | |||
Condensed Consolidating Financial Statements | |||
Net income | 388,049 | 134,861 | 162,263 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Cumulative translation adjustment on Shred-it | 5,875 | ||
Change in fair value of derivatives | (12,156) | 0 | 0 |
Amortization of interest rate lock agreements | 1,952 | 1,952 | 1,952 |
Other | 0 | 0 | 0 |
Other comprehensive loss | (4,329) | 1,952 | 1,952 |
Comprehensive income | 383,720 | 136,813 | 164,215 |
Subsidiary Guarantors | |||
Condensed Consolidating Financial Statements | |||
Net income | 308,750 | 281,160 | 205,009 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 0 | 0 | 0 |
Cumulative translation adjustment on Shred-it | 0 | ||
Change in fair value of derivatives | 0 | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | (730) | (361) | (1,629) |
Other comprehensive loss | (730) | (361) | (1,629) |
Comprehensive income | 308,020 | 280,799 | 203,380 |
Non- Guarantors | |||
Condensed Consolidating Financial Statements | |||
Net income | 3,905 | 17,001 | 20,809 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (11,933) | (38,538) | (9,787) |
Cumulative translation adjustment on Shred-it | 597 | ||
Change in fair value of derivatives | 0 | 37 | (228) |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | (8) | 11 | (3) |
Other comprehensive loss | (11,344) | (38,490) | (10,018) |
Comprehensive income | $ (7,439) | $ (21,489) | $ 10,791 |
Supplemental Guarantor Inform87
Supplemental Guarantor Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | May 31, 2016 | May 31, 2015 | May 31, 2014 | May 31, 2013 |
Current assets: | ||||
Cash and cash equivalents | $ 139,357 | $ 417,073 | ||
Marketable securities | 70,405 | 16,081 | ||
Accounts receivable, net | 563,178 | 496,130 | ||
Inventories, net | 249,362 | 226,211 | ||
Uniforms and other rental items in service | 539,956 | 534,005 | ||
Income taxes, current | 1,712 | 936 | ||
Assets held for sale | 0 | 21,341 | ||
Prepaid expenses and other current assets | 26,065 | 24,030 | ||
Total current assets | 1,590,035 | 1,735,807 | ||
Property and equipment, at cost, net | 994,237 | 871,421 | ||
Investments | 124,952 | 329,692 | ||
Goodwill | 1,291,593 | 1,195,612 | $ 1,267,411 | |
Service contracts, net | 83,715 | 42,434 | ||
Other assets, net | 19,861 | 17,494 | ||
Total assets | 4,104,393 | 4,192,460 | 4,462,452 | |
Current liabilities: | ||||
Accounts payable | 114,514 | 109,607 | ||
Accrued compensation and related liabilities | 101,976 | 88,423 | ||
Accrued liabilities | 349,065 | 309,935 | ||
Liabilities held for sale | 0 | 704 | ||
Long-term debt due within one year | 250,000 | 0 | ||
Total current liabilities | 815,555 | 508,669 | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 1,050,000 | 1,300,000 | ||
Deferred income taxes | 259,475 | 339,327 | ||
Accrued liabilities | 136,704 | 112,009 | ||
Total long-term liabilities | 1,446,179 | 1,751,336 | ||
Total shareholders' equity | 1,842,659 | 1,932,455 | $ 2,192,858 | $ 2,201,492 |
Total liabilities and shareholders' equity | 4,104,393 | 4,192,460 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Marketable securities | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories, net | (3,845) | 2,598 | ||
Uniforms and other rental items in service | (19,722) | (18,963) | ||
Income taxes, current | 0 | 0 | ||
Assets held for sale | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (23,567) | (16,365) | ||
Property and equipment, at cost, net | 0 | 0 | ||
Investments | (3,809,602) | (3,799,565) | ||
Goodwill | (112) | (112) | ||
Service contracts, net | 0 | 0 | ||
Other assets, net | (4,601,168) | (3,894,997) | ||
Total assets | (8,434,449) | (7,711,039) | ||
Current liabilities: | ||||
Accounts payable | 38,005 | 38,021 | ||
Accrued compensation and related liabilities | 0 | 0 | ||
Accrued liabilities | 0 | (724) | ||
Liabilities held for sale | 0 | |||
Long-term debt due within one year | 0 | 0 | ||
Total current liabilities | 38,005 | 37,297 | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 0 | 724 | ||
Deferred income taxes | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Total long-term liabilities | 0 | 724 | ||
Total shareholders' equity | (8,472,454) | (7,749,060) | ||
Total liabilities and shareholders' equity | (8,434,449) | (7,711,039) | ||
Cintas Corporation | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Marketable securities | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Uniforms and other rental items in service | 0 | 0 | ||
Income taxes, current | 0 | 0 | ||
Assets held for sale | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, at cost, net | 0 | 0 | ||
Investments | 321,083 | 321,083 | ||
Goodwill | 0 | 0 | ||
Service contracts, net | 0 | 0 | ||
Other assets, net | 1,081,203 | 1,154,596 | ||
Total assets | 1,402,286 | 1,475,679 | ||
Current liabilities: | ||||
Accounts payable | (465,247) | (465,247) | ||
Accrued compensation and related liabilities | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Liabilities held for sale | 0 | |||
Long-term debt due within one year | 0 | 0 | ||
Total current liabilities | (465,247) | (465,247) | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Total long-term liabilities | 0 | 0 | ||
Total shareholders' equity | 1,867,533 | 1,940,926 | ||
Total liabilities and shareholders' equity | 1,402,286 | 1,475,679 | ||
Corp. 2 | ||||
Current assets: | ||||
Cash and cash equivalents | 55,821 | 74,145 | ||
Marketable securities | 0 | 0 | ||
Accounts receivable, net | 402,846 | 358,560 | ||
Inventories, net | 222,822 | 193,594 | ||
Uniforms and other rental items in service | 410,696 | 399,017 | ||
Income taxes, current | (151) | 1,191 | ||
Assets held for sale | 21,341 | |||
Prepaid expenses and other current assets | 6,668 | 5,514 | ||
Total current assets | 1,098,702 | 1,053,362 | ||
Property and equipment, at cost, net | 577,936 | 523,690 | ||
Investments | 1,770,303 | 1,956,320 | ||
Goodwill | 0 | 0 | ||
Service contracts, net | 81,462 | 42,400 | ||
Other assets, net | 4,665 | 12,373 | ||
Total assets | 3,533,068 | 3,588,145 | ||
Current liabilities: | ||||
Accounts payable | (1,408,002) | (877,042) | ||
Accrued compensation and related liabilities | 70,045 | 59,752 | ||
Accrued liabilities | 82,770 | 65,022 | ||
Liabilities held for sale | 704 | |||
Long-term debt due within one year | 250,000 | 293 | ||
Total current liabilities | (1,005,187) | (751,271) | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 1,049,610 | 1,308,452 | ||
Deferred income taxes | (427) | (304) | ||
Accrued liabilities | 19,628 | 0 | ||
Total long-term liabilities | 1,068,811 | 1,308,148 | ||
Total shareholders' equity | 3,469,444 | 3,031,268 | ||
Total liabilities and shareholders' equity | 3,533,068 | 3,588,145 | ||
Subsidiary Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 57,464 | 249,203 | ||
Marketable securities | 0 | 0 | ||
Accounts receivable, net | 125,005 | 104,964 | ||
Inventories, net | 19,150 | 21,149 | ||
Uniforms and other rental items in service | 112,370 | 117,473 | ||
Income taxes, current | 1,215 | (339) | ||
Assets held for sale | 0 | |||
Prepaid expenses and other current assets | 18,435 | 17,492 | ||
Total current assets | 333,639 | 509,942 | ||
Property and equipment, at cost, net | 342,356 | 275,072 | ||
Investments | 901,772 | 895,393 | ||
Goodwill | 1,256,662 | 1,180,527 | ||
Service contracts, net | 13 | 34 | ||
Other assets, net | 3,526,051 | 2,741,950 | ||
Total assets | 6,360,493 | 5,602,918 | ||
Current liabilities: | ||||
Accounts payable | 1,932,977 | 1,391,999 | ||
Accrued compensation and related liabilities | 26,551 | 23,989 | ||
Accrued liabilities | 252,717 | 232,500 | ||
Liabilities held for sale | 0 | |||
Long-term debt due within one year | 0 | (293) | ||
Total current liabilities | 2,212,245 | 1,648,195 | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 0 | (9,766) | ||
Deferred income taxes | 252,149 | 333,929 | ||
Accrued liabilities | 116,091 | 111,105 | ||
Total long-term liabilities | 368,240 | 435,268 | ||
Total shareholders' equity | 3,780,008 | 3,519,455 | ||
Total liabilities and shareholders' equity | 6,360,493 | 5,602,918 | ||
Non- Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 26,072 | 93,725 | ||
Marketable securities | 70,405 | 16,081 | ||
Accounts receivable, net | 35,327 | 32,606 | ||
Inventories, net | 11,235 | 8,870 | ||
Uniforms and other rental items in service | 36,612 | 36,478 | ||
Income taxes, current | 648 | 84 | ||
Assets held for sale | 0 | |||
Prepaid expenses and other current assets | 962 | 1,024 | ||
Total current assets | 181,261 | 188,868 | ||
Property and equipment, at cost, net | 73,945 | 72,659 | ||
Investments | 941,396 | 956,461 | ||
Goodwill | 35,043 | 15,197 | ||
Service contracts, net | 2,240 | 0 | ||
Other assets, net | 9,110 | 3,572 | ||
Total assets | 1,242,995 | 1,236,757 | ||
Current liabilities: | ||||
Accounts payable | 16,781 | 21,876 | ||
Accrued compensation and related liabilities | 5,380 | 4,682 | ||
Accrued liabilities | 13,578 | 13,137 | ||
Liabilities held for sale | 0 | |||
Long-term debt due within one year | 0 | 0 | ||
Total current liabilities | 35,739 | 39,695 | ||
Long-term liabilities: | ||||
Long-term debt due after one year | 390 | 590 | ||
Deferred income taxes | 7,753 | 5,702 | ||
Accrued liabilities | 985 | 904 | ||
Total long-term liabilities | 9,128 | 7,196 | ||
Total shareholders' equity | 1,198,128 | 1,189,866 | ||
Total liabilities and shareholders' equity | $ 1,242,995 | $ 1,236,757 |
Supplemental Guarantor Inform88
Supplemental Guarantor Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 31, 2015 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Cash flows from operating activities: | ||||
Net income | $ 693,520 | $ 430,618 | $ 374,442 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 149,691 | 140,624 | 168,220 | |
Amortization of intangible assets | 15,588 | 14,458 | 22,642 | |
Stock-based compensation | 79,293 | 47,002 | 29,875 | |
Gain on Storage transactions | (15,786) | (38,573) | 0 | |
Loss (gain) on Shred-it | 24,288 | 3,851 | (108,441) | |
Gain on Shred-it | (378,359) | |||
Shredding Transaction asset impairment charge | 0 | 0 | 16,143 | |
Shredding Transaction costs | 0 | 0 | 26,057 | |
Deferred income taxes | (59,302) | 20,866 | 47,109 | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | (52,762) | (1,443) | (56,231) | |
Inventories, net | (17,917) | 23,785 | (11,062) | |
Uniforms and other rental items in service | (6,306) | (31,994) | (11,435) | |
Prepaid expenses and other current assets | (965) | (3,202) | (2,177) | |
Accounts payable | (564) | (33,445) | 30,446 | |
Accrued compensation and related liabilities | 13,512 | 3,234 | 10,931 | |
Accrued liabilities and other | 22,714 | 33,066 | 54,237 | |
Income taxes, current | (800) | (6,832) | 15,213 | |
Net cash provided by operating activities | 465,845 | 580,276 | 605,969 | |
Cash flows from investing activities: | ||||
Capital expenditures | (275,385) | (217,720) | (145,580) | |
Proceeds from redemption of marketable securities | 434,179 | 161,938 | 54,196 | |
Purchase of marketable securities and investments | (494,146) | (195,471) | (63,858) | |
Proceeds from Storage transactions, net of cash contributed | 35,338 | 158,428 | 0 | |
Proceeds from Shredding transactions, net of cash contributed | 580,837 | 3,344 | 179,359 | |
Proceeds from sale of stock of an equity method investment | 0 | 29,933 | 0 | |
Dividends received on equity method investment | 0 | 5,247 | 0 | |
Acquisitions of businesses, net of cash acquired | (156,579) | (15,495) | (33,441) | |
Other | 4,137 | 1,383 | (5,219) | |
Net cash provided by (used in) investing activities | 128,381 | 44,987 | (14,543) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | 0 | 0 | 0 | |
Repayment of debt | (16) | (518) | (8,187) | |
Proceeds from exercise of stock-based compensation awards | 28,226 | 40,230 | 41,902 | |
Dividends paid | (115,273) | (201,891) | (93,320) | |
Repurchase of common stock | (780,151) | (551,970) | (370,599) | |
Other | 490 | 1,589 | 469 | |
Net cash used in financing activities | (866,724) | (712,560) | (429,735) | |
Effect of exchange rate changes on cash and cash equivalents | (5,218) | (8,918) | (676) | |
Net (decrease) increase in cash and cash equivalents | (277,716) | (96,215) | 161,015 | |
Cash and cash equivalents at beginning of year | 417,073 | 513,288 | 352,273 | |
Cash and cash equivalents at end of year | $ 417,073 | 139,357 | 417,073 | 513,288 |
Shred-it Partnership | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Gain on Storage transactions | (4,300) | |||
Gain on Shred-it | (4,100) | (106,400) | ||
Shredding Transaction asset impairment charge | 16,100 | |||
Cash flows from investing activities: | ||||
Proceeds from Shredding transactions, net of cash contributed | 578,300 | |||
Dividends received on equity method investment | 113,400 | 0 | 113,400 | 0 |
Eliminations | ||||
Cash flows from operating activities: | ||||
Net income | (700,704) | (433,022) | (388,081) | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 0 | 0 | 0 | |
Amortization of intangible assets | 0 | 0 | 0 | |
Stock-based compensation | 0 | 0 | 0 | |
Gain on Storage transactions | 0 | 0 | ||
Loss (gain) on Shred-it | 0 | 0 | 0 | |
Gain on Shred-it | 0 | |||
Shredding Transaction asset impairment charge | 0 | |||
Shredding Transaction costs | 0 | |||
Deferred income taxes | 0 | 0 | 0 | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | 0 | 0 | 0 | |
Inventories, net | 6,443 | 2,272 | (1,616) | |
Uniforms and other rental items in service | 759 | 127 | (15) | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Accounts payable | (16) | 4 | 1 | |
Accrued compensation and related liabilities | 0 | 0 | 0 | |
Accrued liabilities and other | 724 | 22 | 21 | |
Income taxes, current | 0 | 0 | 0 | |
Net cash provided by operating activities | (692,794) | (430,597) | (389,690) | |
Cash flows from investing activities: | ||||
Capital expenditures | 0 | 0 | 0 | |
Proceeds from redemption of marketable securities | 0 | 0 | 0 | |
Purchase of marketable securities and investments | 10,037 | (53,245) | 378,548 | |
Proceeds from Storage transactions, net of cash contributed | 0 | 0 | ||
Proceeds from Shredding transactions, net of cash contributed | 0 | 0 | 0 | |
Proceeds from sale of stock of an equity method investment | 0 | |||
Dividends received on equity method investment | 0 | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | 0 | |
Other | 683,481 | 483,864 | 11,163 | |
Net cash provided by (used in) investing activities | 693,518 | 430,619 | 389,711 | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | 0 | 0 | 0 | |
Repayment of debt | (724) | (22) | (21) | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | |
Dividends paid | 0 | 0 | 0 | |
Repurchase of common stock | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | |
Net cash used in financing activities | (724) | (22) | (21) | |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | |
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 | |
Cash and cash equivalents at beginning of year | 0 | 0 | 0 | |
Cash and cash equivalents at end of year | 0 | 0 | 0 | 0 |
Eliminations | Shred-it Partnership | ||||
Cash flows from investing activities: | ||||
Dividends received on equity method investment | 0 | |||
Cintas Corporation | ||||
Cash flows from operating activities: | ||||
Net income | 693,520 | 430,618 | 374,442 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 0 | 0 | 0 | |
Amortization of intangible assets | 0 | 0 | 0 | |
Stock-based compensation | 79,293 | 47,002 | 29,875 | |
Gain on Storage transactions | 0 | 0 | ||
Loss (gain) on Shred-it | 0 | 0 | 0 | |
Gain on Shred-it | 0 | |||
Shredding Transaction asset impairment charge | 0 | |||
Shredding Transaction costs | 0 | |||
Deferred income taxes | 0 | 0 | 0 | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | 0 | 0 | 0 | |
Inventories, net | 0 | 0 | 0 | |
Uniforms and other rental items in service | 0 | 0 | 0 | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Accounts payable | 0 | 0 | 0 | |
Accrued compensation and related liabilities | 0 | 0 | 0 | |
Accrued liabilities and other | 0 | 0 | 0 | |
Income taxes, current | 0 | 0 | 0 | |
Net cash provided by operating activities | 772,813 | 477,620 | 404,317 | |
Cash flows from investing activities: | ||||
Capital expenditures | 0 | 0 | 0 | |
Proceeds from redemption of marketable securities | 0 | 0 | 0 | |
Purchase of marketable securities and investments | 0 | 0 | 0 | |
Proceeds from Storage transactions, net of cash contributed | 0 | 0 | ||
Proceeds from Shredding transactions, net of cash contributed | 0 | 0 | 0 | |
Proceeds from sale of stock of an equity method investment | 0 | |||
Dividends received on equity method investment | 0 | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | 0 | |
Other | 94,344 | 235,951 | 13,783 | |
Net cash provided by (used in) investing activities | 94,344 | 235,951 | 13,783 | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | 0 | 0 | 0 | |
Repayment of debt | 0 | 0 | 0 | |
Proceeds from exercise of stock-based compensation awards | 28,226 | 40,230 | 41,902 | |
Dividends paid | (115,232) | (201,831) | (93,293) | |
Repurchase of common stock | (780,151) | (551,970) | (370,599) | |
Other | 0 | 0 | 3,890 | |
Net cash used in financing activities | (867,157) | (713,571) | (418,100) | |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | |
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 | |
Cash and cash equivalents at beginning of year | 0 | 0 | 0 | |
Cash and cash equivalents at end of year | 0 | 0 | 0 | 0 |
Cintas Corporation | Shred-it Partnership | ||||
Cash flows from investing activities: | ||||
Dividends received on equity method investment | 0 | |||
Corp. 2 | ||||
Cash flows from operating activities: | ||||
Net income | 388,049 | 134,861 | 162,263 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 96,885 | 87,186 | 110,100 | |
Amortization of intangible assets | 14,830 | 13,972 | 20,547 | |
Stock-based compensation | 0 | 0 | 0 | |
Gain on Storage transactions | (12,547) | (31,113) | ||
Loss (gain) on Shred-it | 22,470 | 3,190 | (113,511) | |
Gain on Shred-it | (388,930) | |||
Shredding Transaction asset impairment charge | 0 | |||
Shredding Transaction costs | 0 | |||
Deferred income taxes | (83,648) | 67 | (2) | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | (30,570) | 4,370 | (53,053) | |
Inventories, net | (23,917) | 22,405 | (14,735) | |
Uniforms and other rental items in service | (10,329) | (24,351) | (11,004) | |
Prepaid expenses and other current assets | (142) | (345) | (386) | |
Accounts payable | (461,203) | (322,461) | 25,573 | |
Accrued compensation and related liabilities | 9,959 | 3,171 | 5,778 | |
Accrued liabilities and other | (2,926) | (15,829) | 50,008 | |
Income taxes, current | 1,342 | 358 | 2,621 | |
Net cash provided by operating activities | (480,677) | (124,519) | 184,199 | |
Cash flows from investing activities: | ||||
Capital expenditures | (151,063) | (110,658) | (123,978) | |
Proceeds from redemption of marketable securities | 0 | 0 | 0 | |
Purchase of marketable securities and investments | (3,333) | (1,827) | (151,063) | |
Proceeds from Storage transactions, net of cash contributed | 32,099 | 93,387 | ||
Proceeds from Shredding transactions, net of cash contributed | 568,223 | 3,344 | 180,000 | |
Proceeds from sale of stock of an equity method investment | 0 | |||
Dividends received on equity method investment | 0 | |||
Acquisitions of businesses, net of cash acquired | (130,786) | (15,495) | (13,199) | |
Other | 154,412 | 42,199 | (50,446) | |
Net cash provided by (used in) investing activities | 469,552 | 124,350 | (158,686) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | 0 | 0 | 0 | |
Repayment of debt | (9,151) | (1,178) | (8,436) | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | |
Dividends paid | 0 | 0 | 0 | |
Repurchase of common stock | 0 | 0 | 0 | |
Other | 1,952 | 1,952 | 1,952 | |
Net cash used in financing activities | (7,199) | 774 | (6,484) | |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | |
Net (decrease) increase in cash and cash equivalents | (18,324) | 605 | 19,029 | |
Cash and cash equivalents at beginning of year | 74,145 | 73,540 | 54,511 | |
Cash and cash equivalents at end of year | 74,145 | 55,821 | 74,145 | 73,540 |
Corp. 2 | Shred-it Partnership | ||||
Cash flows from investing activities: | ||||
Dividends received on equity method investment | 113,400 | |||
Subsidiary Guarantors | ||||
Cash flows from operating activities: | ||||
Net income | 308,750 | 281,160 | 205,009 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 43,441 | 43,013 | 44,856 | |
Amortization of intangible assets | 304 | 60 | 153 | |
Stock-based compensation | 0 | 0 | 0 | |
Gain on Storage transactions | 0 | 0 | ||
Loss (gain) on Shred-it | 0 | 0 | 0 | |
Gain on Shred-it | 0 | |||
Shredding Transaction asset impairment charge | 16,143 | |||
Shredding Transaction costs | 26,057 | |||
Deferred income taxes | 22,025 | 18,565 | 47,373 | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | (20,007) | (7,095) | (1,300) | |
Inventories, net | 2,011 | (405) | 4,839 | |
Uniforms and other rental items in service | 5,104 | (5,006) | 557 | |
Prepaid expenses and other current assets | (939) | (2,740) | (1,844) | |
Accounts payable | 465,539 | 289,110 | 23,246 | |
Accrued compensation and related liabilities | 2,982 | 1,400 | 4,947 | |
Accrued liabilities and other | 24,761 | 42,551 | 4,897 | |
Income taxes, current | (1,565) | (6,155) | 9,902 | |
Net cash provided by operating activities | 852,406 | 632,719 | 384,835 | |
Cash flows from investing activities: | ||||
Capital expenditures | (111,392) | (92,600) | (9,591) | |
Proceeds from redemption of marketable securities | 0 | 0 | 5,659 | |
Purchase of marketable securities and investments | (12,085) | 38,731 | (242,956) | |
Proceeds from Storage transactions, net of cash contributed | 0 | 0 | ||
Proceeds from Shredding transactions, net of cash contributed | 0 | 0 | 0 | |
Proceeds from sale of stock of an equity method investment | 29,933 | |||
Dividends received on equity method investment | 5,247 | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | 0 | |
Other | (929,997) | (764,336) | 8,108 | |
Net cash provided by (used in) investing activities | (1,053,474) | (783,025) | (238,780) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | (165) | (2,615) | (2,445) | |
Repayment of debt | 10,224 | 2,962 | (106) | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | |
Dividends paid | 0 | 0 | 0 | |
Repurchase of common stock | 0 | 0 | 0 | |
Other | (730) | (363) | 8,951 | |
Net cash used in financing activities | 9,329 | (16) | 6,400 | |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | |
Net (decrease) increase in cash and cash equivalents | (191,739) | (150,322) | 152,455 | |
Cash and cash equivalents at beginning of year | 249,203 | 399,525 | 247,070 | |
Cash and cash equivalents at end of year | 249,203 | 57,464 | 249,203 | 399,525 |
Subsidiary Guarantors | Shred-it Partnership | ||||
Cash flows from investing activities: | ||||
Dividends received on equity method investment | 0 | |||
Non- Guarantors | ||||
Cash flows from operating activities: | ||||
Net income | 3,905 | 17,001 | 20,809 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Depreciation | 9,365 | 10,425 | 13,264 | |
Amortization of intangible assets | 454 | 426 | 1,942 | |
Stock-based compensation | 0 | 0 | 0 | |
Gain on Storage transactions | (3,239) | (7,460) | ||
Loss (gain) on Shred-it | 1,818 | 661 | 5,070 | |
Gain on Shred-it | 10,571 | |||
Shredding Transaction asset impairment charge | 0 | |||
Shredding Transaction costs | 0 | |||
Deferred income taxes | 2,321 | 2,234 | (262) | |
Change in current assets and liabilities, net of acquisitions of businesses: | ||||
Accounts receivable, net | (2,185) | 1,282 | (1,878) | |
Inventories, net | (2,454) | (487) | 450 | |
Uniforms and other rental items in service | (1,840) | (2,764) | (973) | |
Prepaid expenses and other current assets | 116 | (117) | 53 | |
Accounts payable | (4,884) | (98) | (18,374) | |
Accrued compensation and related liabilities | 571 | (1,337) | 206 | |
Accrued liabilities and other | 155 | 6,322 | (689) | |
Income taxes, current | (577) | (1,035) | 2,690 | |
Net cash provided by operating activities | 14,097 | 25,053 | 22,308 | |
Cash flows from investing activities: | ||||
Capital expenditures | (12,930) | (14,462) | (12,011) | |
Proceeds from redemption of marketable securities | 434,179 | 161,938 | 48,537 | |
Purchase of marketable securities and investments | (488,765) | (179,130) | (48,387) | |
Proceeds from Storage transactions, net of cash contributed | 3,239 | 65,041 | ||
Proceeds from Shredding transactions, net of cash contributed | 12,614 | 0 | (641) | |
Proceeds from sale of stock of an equity method investment | 0 | |||
Dividends received on equity method investment | 0 | |||
Acquisitions of businesses, net of cash acquired | (25,793) | 0 | (20,242) | |
Other | 1,897 | 3,705 | 12,173 | |
Net cash provided by (used in) investing activities | (75,559) | 37,092 | (20,571) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of debt | 165 | 2,615 | 2,445 | |
Repayment of debt | (365) | (2,280) | 376 | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | |
Dividends paid | (41) | (60) | (27) | |
Repurchase of common stock | 0 | 0 | 0 | |
Other | (732) | 0 | (14,324) | |
Net cash used in financing activities | (973) | 275 | (11,530) | |
Effect of exchange rate changes on cash and cash equivalents | (5,218) | (8,918) | (676) | |
Net (decrease) increase in cash and cash equivalents | (67,653) | 53,502 | (10,469) | |
Cash and cash equivalents at beginning of year | 93,725 | 40,223 | 50,692 | |
Cash and cash equivalents at end of year | $ 93,725 | $ 26,072 | 93,725 | $ 40,223 |
Non- Guarantors | Shred-it Partnership | ||||
Cash flows from investing activities: | ||||
Dividends received on equity method investment | $ 0 |
Schedule II - Valuation and Q89
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2016 | May 31, 2015 | May 31, 2014 | ||
Allowance for Doubtful Accounts | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Year | $ 15,674 | $ 14,906 | $ 15,855 | |
Charged to Costs and Expense | [1] | 8,646 | 5,718 | 5,607 |
Deductions | [2] | 4,716 | 4,950 | 6,556 |
Balance at End of Year | 19,604 | 15,674 | 14,906 | |
Reserve for Obsolete Inventory | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Year | 30,707 | 30,673 | 29,487 | |
Charged to Costs and Expense | [1] | 5,219 | 3,278 | 3,147 |
Deductions | [2] | 3,010 | 3,244 | 1,961 |
Balance at End of Year | $ 32,916 | $ 30,707 | $ 30,673 | |
[1] | Represents amounts charged to expense to increase reserve for estimated future bad debts or to increase reserve for obsolete inventory. Amounts related to inventory are computed by performing a thorough analysis of future marketability by specific inventory item as well as an estimate based on Cintas' historical rates of obsolesence. | |||
[2] | Represents reductions in the balance sheet reserve due to the actual write-off of non-collectible accounts receivable or the physical disposal of obsolete inventory items. These amounts do not impact Cintas' consolidated income statement. |