Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2017 | Jun. 30, 2017 | Nov. 30, 2016 | |
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, 2017 | ||
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 | $ 12,034,116,433 | ||
Entity Common Stock, Shares Outstanding | 105,435,865 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Revenue: | |||
Uniform rental and facility services | $ 4,202,490 | $ 3,759,524 | $ 3,519,199 |
Other | 1,120,891 | 1,036,248 | 850,478 |
Total revenue | 5,323,381 | 4,795,772 | 4,369,677 |
Costs and expenses: | |||
Cost of uniform rental and facility services | 2,307,774 | 2,092,833 | 1,992,665 |
Cost of other | 635,312 | 601,599 | 484,089 |
Selling and administrative expenses | 1,527,380 | 1,332,399 | 1,209,284 |
G&K Services, Inc. transaction and integration expenses | 79,224 | 0 | 0 |
Operating income | 773,691 | 768,941 | 683,639 |
Gain on sale of stock of an equity method investment | 0 | 0 | 21,739 |
Interest income | (237) | (896) | (339) |
Interest expense | 86,524 | 64,522 | 65,161 |
Income before income taxes | 687,404 | 705,315 | 640,556 |
Income taxes | 230,118 | 256,710 | 238,003 |
Income from continuing operations | 457,286 | 448,605 | 402,553 |
Income from discontinued operations, net of tax of $15,057, $138,184 and $15,910, respectively | 23,422 | 244,915 | 28,065 |
Net income | $ 480,708 | $ 693,520 | $ 430,618 |
Basic earnings per share | |||
Basic earnings per share, continuing operations (dollars per share) | $ 4.27 | $ 4.08 | $ 3.44 |
Basic earnings per share, discontinued operations (dollars per share) | 0.22 | 2.22 | 0.24 |
Basic earnings per share (dollars per share) | 4.49 | 6.30 | 3.68 |
Diluted earnings per share | |||
Diluted earnings per share, continuing operations (dollars per share) | 4.17 | 4.02 | 3.39 |
Diluted earnings per share, discontinued operations (dollars per share) | 0.21 | 2.19 | 0.24 |
Diluted earnings per share (dollars per share) | 4.38 | 6.21 | 3.63 |
Dividends declared and paid per share (dollars per share) | $ 1.33 | $ 1.05 | $ 1.70 |
Consolidated Statements of Inc3
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Statement [Abstract] | |||
Discontinued operations, income tax expense | $ 15,057 | $ 138,184 | $ 15,910 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 480,708 | $ 693,520 | $ 430,618 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (10,252) | (11,933) | (38,538) |
Cumulative translation adjustment on Shred-it | 0 | 6,472 | 0 |
Change in fair value of cash flow hedges | 31,136 | (12,156) | 37 |
Amortization of interest rate lock agreements | 1,076 | 1,952 | 1,952 |
Other | (115) | (738) | (350) |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 21,845 | (16,403) | (36,899) |
Comprehensive income (loss) | $ 502,553 | $ 677,117 | $ 393,719 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Other comprehensive income (loss), tax | $ 19,118 | $ (9,813) | $ 1,043 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | ||
Current assets: | ||||
Cash and cash equivalents | $ 169,266 | $ 139,357 | ||
Marketable securities | 22,219 | 70,405 | ||
Accounts receivable, principally trade, less allowance of $20,525 and $19,103, respectively | 736,008 | 546,488 | ||
Inventories, net | 278,218 | 249,362 | ||
Uniforms and other rental items in service | 635,702 | 538,286 | ||
Income taxes, current | 44,320 | 1,712 | ||
Prepaid expenses and other current assets | 30,132 | 25,948 | ||
Assets held for sale | 38,613 | 19,021 | ||
Total current assets | 1,954,478 | 1,590,579 | ||
Property and equipment, at cost, net | 1,323,501 | 993,692 | ||
Investments | 164,788 | [1] | 124,952 | [2] |
Goodwill | 2,782,335 | 1,276,076 | ||
Service contracts, net | 586,988 | 78,194 | ||
Other assets, net | 31,967 | 14,283 | ||
Long-term assets held for sale | 0 | 21,039 | ||
Total assets | 6,844,057 | 4,098,815 | ||
Current liabilities: | ||||
Accounts payable | 177,051 | 110,940 | ||
Accrued compensation and related liabilities | 149,635 | 101,391 | ||
Accrued liabilities | 429,809 | 343,266 | ||
Liabilities held for sale | 11,457 | 9,958 | ||
Debt due within one year | 362,900 | 250,000 | ||
Total current liabilities | 1,130,852 | 815,555 | ||
Long-term liabilities: | ||||
Debt due after one year | 2,770,624 | 1,044,422 | ||
Deferred income taxes | 469,328 | 259,475 | ||
Accrued liabilities | 170,460 | 136,704 | ||
Total long-term liabilities | 3,410,412 | 1,440,601 | ||
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, 2017: 180,992,605 shares issued and 104,213,479 shares outstanding, 2016: 179,598,516 shares issued and 104,213,479 shares outstanding | 485,068 | 409,682 | ||
Paid-in capital | 223,924 | 205,260 | ||
Retained earnings | 5,170,830 | 4,805,867 | ||
Treasury stock: 2017: 75,591,976 shares, 2016: 75,385,037 shares | (3,574,000) | (3,553,276) | ||
Accumulated other comprehensive loss | (3,029) | (24,874) | ||
Total shareholders' equity | 2,302,793 | 1,842,659 | ||
Total liabilities and shareholders' equity | $ 6,844,057 | $ 4,098,815 | ||
[1] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million, respectively, of the $164.8 million consolidated net investments. | |||
[2] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $15.5 million and $109.5 million, respectively, of the $125.0 million consolidated net investments. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 20,525 | $ 19,103 |
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) | 180,992,605 | 179,598,516 |
Common stock, shares outstanding (in shares) | 104,213,479 | 105,400,629 |
Treasury stock, shares (in shares) | 75,591,976 | 75,385,037 |
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, 2014 | 176,378 | 59,341 | ||||
Beginning 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 | $ 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 | $ 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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 480,708 | 480,708 | ||||
Comprehensive income (loss), net of tax | 21,845 | 21,845 | ||||
Dividends | (142,433) | (142,433) | ||||
Stock-based compensation | 88,868 | 88,868 | ||||
Vesting of stock-based compensation awards (shares) | 429 | |||||
Vesting of stock-based compensation awards | 0 | $ 43,516 | (43,516) | |||
Stock options exercised, net of shares surrendered (shares) | 966 | |||||
Stock options exercised, net of shares surrendered | 31,870 | $ 31,870 | ||||
Repurchase of common stock (shares) | (207) | |||||
Repurchase of common stock | (20,724) | $ (20,724) | ||||
Adoption of new accounting guidance | 0 | 26,688 | (26,688) | |||
Balance (shares) at May. 31, 2017 | 180,993 | 75,592 | ||||
Ending Balance at May. 31, 2017 | $ 2,302,793 | $ 485,068 | $ 223,924 | $ 5,170,830 | $ (3,029) | $ (3,574,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 480,708 | $ 693,520 | $ 430,618 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 171,565 | 149,691 | 140,624 |
Amortization of intangible assets | 25,030 | 15,588 | 14,458 |
Stock-based compensation | 88,868 | 79,293 | 47,002 |
Gain on Storage transactions | (1,460) | (15,786) | (38,573) |
(Gain) loss on Shred-it | (25,457) | (354,071) | 3,851 |
Gain on sale of stock of an equity method investment | 0 | 0 | (21,739) |
Asset impairment charge | 23,331 | 0 | 0 |
G&K Services, Inc. transaction costs | 31,445 | 0 | 0 |
Short-term debt financing fees included in net income | 17,062 | 0 | 0 |
Settlement of cash flow hedges | 30,194 | 0 | 0 |
Deferred income taxes | 3,902 | (59,302) | 20,866 |
Change in current assets and liabilities, net of acquisitions of businesses: | |||
Accounts receivable, net | (93,557) | (52,762) | (1,443) |
Inventories, net | (668) | (17,917) | 23,785 |
Uniforms and other rental items in service | (8,732) | (6,306) | (31,994) |
Prepaid expenses and other current assets | 24,201 | (965) | (3,202) |
Accounts payable | 13,726 | (564) | (33,445) |
Accrued compensation and related liabilities | 13,654 | 13,512 | 3,234 |
Accrued liabilities and other | (501) | 22,714 | 33,066 |
Income taxes, current | (29,424) | (800) | (6,832) |
Net cash provided by (used in) operating activities | 763,887 | 465,845 | 580,276 |
Cash flows from investing activities: | |||
Capital expenditures | (273,317) | (275,385) | (217,720) |
Proceeds from redemption of marketable securities | 218,324 | 434,179 | 161,938 |
Purchase of marketable securities and investments | (181,065) | (494,146) | (195,471) |
Proceeds from Storage transactions, net of cash contributed | 2,400 | 35,338 | 158,428 |
Proceeds from Shredding transactions, net of cash contributed | 25,876 | 580,837 | 3,344 |
Proceeds from sale of stock of an equity method investment | 0 | 0 | 29,933 |
Dividends received on equity method investment | 0 | 0 | 5,247 |
Acquisitions of businesses, net of cash acquired | (2,102,371) | (156,579) | (15,495) |
Other | (196) | 4,137 | 1,383 |
Net cash (used in) provided by investing activities | (2,310,349) | 128,381 | 44,987 |
Cash flows from financing activities: | |||
Proceeds from issuance of commercial paper, net | 50,500 | 0 | 0 |
Proceeds from issuance of debt, net | 1,932,229 | 0 | 0 |
Repayment of debt | (250,000) | (16) | (518) |
Payment of short-term debt financing fees | (17,062) | 0 | 0 |
Proceeds from exercise of stock-based compensation awards | 31,870 | 28,226 | 40,230 |
Dividends paid | (142,433) | (115,273) | (201,891) |
Repurchase of common stock | (20,724) | (780,151) | (551,970) |
Other | (5,878) | 490 | 1,589 |
Net cash provided by (used in) financing activities | 1,578,502 | (866,724) | (712,560) |
Effect of exchange rate changes on cash and cash equivalents | (2,131) | (5,218) | (8,918) |
Net increase (decrease) in cash and cash equivalents | 29,909 | (277,716) | (96,215) |
Cash and cash equivalents at beginning of year | 139,357 | 417,073 | 513,288 |
Cash and cash equivalents at end of year | 169,266 | 139,357 | 417,073 |
Shred-it Partnership | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Gain on Storage transactions | (25,500) | ||
(Gain) loss on Shred-it | (4,100) | ||
Cash flows from investing activities: | |||
Proceeds from Shredding transactions, net of cash contributed | 578,300 | ||
Dividends received on equity method investment | $ 0 | $ 0 | $ 113,400 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
May 31, 2017 | |
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 one million businesses of all types and sizes, primarily in North America, as well as Latin America, Europe and Asia, get Ready™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday™. On March 21, 2017, Cintas completed the acquisition of G&K Services, Inc. (G&K) for consideration of approximately $2.1 billion . G&K is now a wholly-owned subsidiary of Cintas that will operate within the Uniform Rental and Facility Services operating segment. To finance the G&K acquisition, Cintas used a combination of new senior notes, a term loan, other borrowings under its existing credit facility and cash on hand. G&K's results of operations are included in Cintas' consolidated financial statements as of and from the date of acquisition. U.S. Generally Accepted Accounting Principles (U. S. GAAP) requires companies to evaluate their reportable operating segments periodically and when certain events occur. As a result of our evaluation in fiscal 2016, 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, which includes G&K, consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies, carpet and tile cleaning services and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of Fire Protection Services and its Uniform Direct Sale business, is included in All Other. Cintas evaluates 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, 2017, 2016 and 2015 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. At May 31, 2017, Cintas has classified a significant business, referred to as "Discontinued Services," as held for sale. Prior to meeting the held for sale criteria, Discontinued Services was primarily included in All Other. 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. In accordance with the applicable accounting guidance for the disposal of long-lived assets and discontinued operations, the results of Discontinued Services, Shredding and Storage have been excluded from both continuing operations and operating segment results for all periods presented. 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. Consolidated Financial statement presentation. We have reclassified certain prior-year amounts, primarily related to discontinued operations, 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. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. These factors and other events could cause actual results to differ from management's 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. G&K transaction and integration expenses. As a result of the acquisition of G&K in fiscal 2017, the Company incurred various transaction and integration expenses which relate primarily to asset impairment charges, legal and professional fees, employee termination expenses, the write-off of excess inventory and other miscellaneous expenses. See Note 17 entitled G&K Transaction and Integration Expenses. 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, 2017 and 2016 , cash and cash equivalents includes $30.6 million and $50.6 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 at May 31: (In thousands) 2017 2016 Raw materials $ 17,528 $ 17,794 Work in process 17,951 14,731 Finished goods 242,739 216,837 $ 278,218 $ 249,362 Inventories are recorded net of reserves for obsolete inventory of $ 38.3 million and $ 32.7 million at May 31, 2017 and 2016 , respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. The increase in the reserve during fiscal 2017 is related to excess inventory obtained in the G&K acquisition. 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. Uniforms acquired in the G&K acquisition will be amortized over 12 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 facility services that are presented in the consolidated financial statements. Property and equipment. Property and equipment is stated at cost, less accumulated depreciation or at fair value upon acquisition. 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, prices of similar assets or third party real estate valuations, as appropriate. As a result of the identification of certain G&K plants and branches for future closure, an indicator of potential impairment was identified. Cintas recognized an impairment loss of $23.3 million during the year ended May 31, 2017, based on the excess of the carrying amount of asset over their respective fair values. The undiscounted cash flows used to test recoverability were performed, using Level 2 inputs based on both the cost and market approaches, at the lowest discernible level, which is at the location level. Cintas did not identify any indicators of impairment for the years ended May 31, 2016 and 2015 . 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 in fiscal 2016 and the acquisition of G&K in fiscal 2017, the composition of Cintas’ reporting units for the evaluation of goodwill impairment has changed. Cintas has identified six reporting units for purposes of evaluating goodwill impairment: Uniform Rental and Facility Services, G&K Services Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other. Given the proximity of the G&K acquisition date to the consolidated balance sheet date, the Company performed a high level qualitative analysis for its G&K reporting unit, which considered indicators of impairment to evaluate whether the fair value was more-likely-than-not in excess of its carrying value. The key indicators considered include macroeconomic conditions, industry/market considerations, financial performance, cash flow, changes in management, and composition of net assets. Based on the results of the annual impairment tests, Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2017 , 2016 or 2015 . 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 generally amortized by use of the straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years. The G&K service contract asset will be amortized over a period of 15 years which represents the estimated life of the economic benefit and the asset amortization is based on the annual economic value of the underlying asset which generally decreases over the 15 -year term. 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, 2017 , 2016 and 2015 . Business Combinations. Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. See Note 9 entitled Acquisitions and Divestitures for a discussion of the G&K and ZEE Acquisitions. Debt Issuance Costs. Debt issuance costs for the revolving credit facility are included in other assets and all other debt issuance costs reduce the carrying amount of long-term debt. 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 at May 31: (In thousands) 2017 2016 General insurance liabilities $ 153,743 $ 128,759 Employee benefit related liabilities 110,104 75,587 Taxes and related liabilities 8,057 5,765 Accrued interest 36,638 26,682 Other 121,267 106,473 $ 429,809 $ 343,266 General insurance liabilities represent the estimated ultimate cost of all asserted and unasserted claims incurred, primarily related to workers' 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. The increase in accrued liabilities from May 31, 2016 to May 31, 2017 is primarily related to the acquisition of G&K. 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 Employee Benefit Plans. Pension Plans. The Company assumed G&K's noncontributory, defined benefit pension plan (the Pension Plan) covering substantially all employees who were employed as of July 1, 2005, except certain employees who are covered by union-administered plans. Benefits are based on the number of years of service and each employee's compensation near retirement. G&K froze the Pension Plan effective December 31, 2006. Future growth in benefits will not occur after this date. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at May 31, the measurement date. The benefit obligation is the projected benefit obligation (PBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the Pension Plan and use participant-specific information such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. We recognize, as of a measurement date, any unrecognized actuarial net gains or losses that exceed 10% of the larger of the projected benefit obligations or the plan assets, defined as the "corridor." Amounts inside the corridor are amortized over the plan participants' life expectancy. We determine the expected return on assets using the fair value of plan assets. 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 actual 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. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of other comprehensive income in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. 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. U.S. 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. There were no transfers between levels for the years ended May 31, 2017 or 2016. The carrying value of accounts receivable and accounts payable, and other current assets and liabilities, approximate fair value because of the short-term maturity of those instruments. 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 April 2014, the FASB issued Accounting Standard Update (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. A cross-functional implementation team has been established consisting of representatives from all of our operating segments. The implementation team is working to analyze the impact of the standard on Cintas' contract portfolio by reviewing current a |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
May 31, 2017 | |
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, 2017 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 169,266 $ — $ — $ 169,266 Marketable securities: Canadian treasury securities — 22,219 — 22,219 Total assets at fair value $ 169,266 $ 22,219 $ — $ 191,485 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 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 are 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, 2017 and 2016 was $22.2 million and $70.4 million , respectively. Purchases of marketable securities were $ 171.3 million , $ 488.8 million and $ 179.2 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. All outstanding marketable securities as of May 31, 2017 and 2016 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. The interest rate lock agreements outstanding at May 31, 2016 were settled during fiscal 2017. 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 dates. In addition to assets and liabilities that are recorded at fair value on a recurring basis, Cintas records assets and liabilities at fair value on a nonrecurring basis as required under U.S. GAAP. Cintas' acquisition of G&K in fiscal 2017 and ZEE in fiscal 2016 were recorded at fair value. See Note 9 entitled Acquisitions and Divestitures for additional information on the measurement of the G&K and ZEE assets acquired and liabilities assumed. |
Property and Equipment
Property and Equipment | 12 Months Ended |
May 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment (In thousands) 2017 2016 Land $ 173,166 $ 117,881 Buildings and improvements 624,615 509,193 Equipment 1,930,018 1,582,793 Leasehold improvements 32,679 28,412 Construction in progress 79,400 173,367 2,839,878 2,411,646 Less: accumulated depreciation 1,516,377 1,417,954 $ 1,323,501 $ 993,692 Interest expense is net of capitalized interest of $2.1 million and $1.1 million for the fiscal years ended May 31, 2017 and 2016 , respectively. |
Investments
Investments | 12 Months Ended |
May 31, 2017 | |
Investments [Abstract] | |
Investments | Investments Investments at May 31, 2017 of $164.8 million include the cash surrender value of insurance policies of $144.0 million , equity method investments of $15.8 million and cost method investments of $5.0 million . 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 . 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 2017 , 2016 and 2015 , no losses due to impairment were recorded. |
Goodwill, Service Contracts and
Goodwill, Service Contracts and Other Assets | 12 Months Ended |
May 31, 2017 | |
Goodwill, Service Contracts and Other Assets [Abstract] | |
Goodwill, Service Contracts and Other Assets | Goodwill, Service Contracts and Other Assets Changes in the carrying amount of goodwill and service contracts by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2015 $ 940,423 $ 154,954 $ 84,717 $ 1,180,094 Goodwill acquired 10,020 86,874 203 97,097 Foreign currency translation (713 ) (380 ) (22 ) (1,115 ) Balance at May 31, 2016 $ 949,730 $ 241,448 $ 84,898 $ 1,276,076 Goodwill acquired 1,499,008 2,265 6,281 1,507,554 Foreign currency translation (668 ) (601 ) (26 ) (1,295 ) Balance as of May 31, 2017 $ 2,448,070 $ 243,112 $ 91,153 $ 2,782,335 Assets held for sale at May 31, 2017 and 2016 include $15.5 million of goodwill associated with Discontinued Services. Service Contracts (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2015 $ 5,078 $ 1,576 $ 28,996 $ 35,650 Service contracts acquired 18,912 34,052 2,730 55,694 Service contracts amortization (4,078 ) (3,355 ) (5,696 ) (13,129 ) Foreign currency translation — (21 ) — (21 ) Balance at May 31, 2016 $ 19,912 $ 32,252 $ 26,030 $ 78,194 Service contracts acquired 521,708 1,632 5,895 529,235 Service contracts amortization (11,636 ) (3,952 ) (4,922 ) (20,510 ) Foreign currency translation (61 ) 130 — 69 Balance as of May 31, 2017 $ 529,923 $ 30,062 $ 27,003 $ 586,988 Information regarding Cintas' service contracts and other assets is as follows: As of May 31, 2017 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 911,273 $ 324,285 $ 586,988 Noncompete and consulting agreements $ 40,743 $ 39,244 $ 1,499 Other 34,890 4,422 30,468 Total $ 75,633 $ 43,666 $ 31,967 As of May 31, 2016 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 382,858 $ 304,664 $ 78,194 Noncompete and consulting agreements $ 40,238 $ 38,788 $ 1,450 Other 15,275 2,442 12,833 Total $ 55,513 $ 41,230 $ 14,283 Amortization expense for continuing operations was $ 22.8 million , $ 14.2 million and $ 12.1 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. Estimated amortization expense for continuing operations, excluding any future acquisitions, for each of the next five years is $ 60.0 million, $ 60.1 million, $ 59.5 million, $ 53.7 million and $ 53.1 million, respectively. The increase in amortization expense in the current year and for the next five years over past fiscal years is the result of the G&K acquisition. |
Debt and Derivatives
Debt and Derivatives | 12 Months Ended |
May 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt and Derivatives | Debt and Derivatives Cintas' debt is summarized as follows at May 31: (In thousands) Interest Rate Fiscal Year Issued Fiscal Year Maturity 2017 2016 Debt due within one year Senior notes 2.85 % 2007 2017 $ — $ 250,000 Senior notes 6.13 % 2008 2018 300,000 — Commercial paper 1.24 % (1) Various Various 50,500 — Current portion of term loan 2.00 % (1) 2017 2018 12,500 — Debt issuance costs (100 ) — Total debt due within one year $ 362,900 $ 250,000 Debt due after one year Senior notes 6.13 % 2008 2018 $ — $ 300,000 Senior notes 4.30 % 2012 2022 250,000 250,000 Senior notes 2.90 % 2017 2022 650,000 — Senior notes 3.25 % 2013 2023 300,000 250,000 Senior notes (2) 2.78 % 2013 2023 52,554 — Senior notes (3) 3.11 % 2015 2025 52,645 — Senior notes 3.70 % 2017 2027 1,000,000 — Senior notes 6.15 % 2007 2037 250,000 250,000 Long-term portion of term loan 2.00 % (1) 2017 2022 237,500 — Debt issuance costs (22,075 ) (5,578 ) Total debt due after one year $ 2,770,624 $ 1,044,422 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2017. (2) Cintas assumed these senior notes with the acquisition of G&K, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73% . (3) Cintas assumed these senior notes with the acquisition of G&K, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88% . The average interest rate for all Cintas debt at May 31, 2017 was 3.8% with maturity dates through fiscal year 2037. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K, and term loan are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of May 31, 2017 were $3,156.0 million and $ 3,296.8 million , respectively, and as of May 31, 2016 were $1,300.0 million and $ 1,416.6 million , respectively. On June 1, 2016, Cintas paid the $250.0 million five -year senior notes that matured on that date with cash on hand and $218.5 million proceeds from the issuance of commercial paper. In June and July 2017, Cintas paid a total of $50.5 million of commercial paper and $150.0 million of the term loan with cash on hand. Letters of credit outstanding were $110.9 million and $ 83.4 million at May 31, 2017 and 2016 , respectively. Maturities of debt during each of the next five years are $363.0 million , $12.5 million , $12.5 million , $12.5 million and $1,100.0 million , respectively. Interest paid was $ 76.6 million , $ 64.5 million and $ 65.3 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. Interest paid in fiscal 2017 included the payment of $17.1 million in short-term debt financing fees, which were related to the acquisition of G&K and are not reoccurring The credit agreement that supports our commercial paper program was amended on September 16, 2016. The amendment increased the capacity of the revolving credit facility from $450.0 million to $600.0 million and added a $250.0 million term loan. The $150.0 million increase in the revolving credit facility took effect upon the consummation of the merger (Merger) contemplated by the merger agreement (Merger Agreement) among the Company, G&K and Bravo Merger Sub, Inc. (Merger Sub), a wholly-owned subsidiary of Cintas. The term loan was funded upon the consummation of the Merger. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan facility of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the agreement is September 15, 2021. As of May 31, 2017 , there was $50.5 million of commercial paper outstanding with a weighted average interest rate of 1.24% and maturity dates less than 30 days and no borrowings on our revolving credit facility. The fair value of the commercial paper is estimated using Level 2 inputs based on general market prices. Given its short-term nature, the carrying value of the outstanding commercial paper approximates fair value. No commercial paper or borrowings on our revolving credit facility were outstanding at May 31, 2016 . Cintas uses interest rate locks to manage its overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2008, fiscal 2011, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in an increase to other comprehensive income of $ 1.1 million , $2.0 million and $2.0 million in the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. 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 a liability of $19.6 million recorded in long-term liabilities and other comprehensive income, net of tax. The interest rate locks had no impact on net income or cash flows from continuing operations for fiscal 2016. As of the third quarter of fiscal 2017, Cintas had multiple interest rate lock agreements in place for forecasted long-term debt issuances. The notional value of the planned debt issuances was $500.0 million of 5 -year senior notes and $1.0 billion of 10 -year senior notes. In conjunction with the issuance of long-term debt in the fourth quarter of fiscal 2017, Cintas settled these interest rate lock agreements, which resulted in a deferred gain of $30.2 million . The effective portion of the gain was recorded in other comprehensive income to be amortized as a reduction to interest expense beginning in the fourth quarter of fiscal 2017 through the remaining life of the debt. 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 2017 , 2016 or 2015 . Cintas had no foreign currency forward contracts as of May 31, 2017 or 2016 . Cintas has certain covenants related to debt agreements. These covenants limit Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all of the debt covenants for all periods presented. |
Leases
Leases | 12 Months Ended |
May 31, 2017 | |
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 $ 43.8 million , $ 35.9 million , $ 28.5 million , $ 22.3 million , $ 17.0 million and $ 28.5 million , respectively. Rent expense for continuing operations under operating leases during the fiscal years ended May 31, 2017 , 2016 and 2015 , was $ 49.6 million , $ 40.8 million and $ 34.2 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes for continuing operations consists of the following components: (In thousands) 2017 2016 2015 U.S. operations $ 673,055 $ 685,167 $ 622,502 Foreign operations 14,349 20,148 18,054 $ 687,404 $ 705,315 $ 640,556 Income tax expense for continuing operations consists of the following components: (In thousands) 2017 2016 2015 Current: Federal $ 194,130 $ 279,134 $ 199,360 State and local 27,197 25,428 24,733 221,327 304,562 224,093 Deferred 8,791 (47,852 ) 13,910 $ 230,118 $ 256,710 $ 238,003 Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows: (In thousands) 2017 2016 2015 Income taxes at the U.S. federal statutory rate $ 240,677 $ 246,881 $ 224,360 State and local income taxes, net of federal benefit 19,210 16,339 16,308 Other (1) (29,769 ) (6,510 ) (2,665 ) $ 230,118 $ 256,710 $ 238,003 (1) The Other category in fiscal 2017 is primarily associated with $29.4 million excess tax benefit for share based compensation under the adoption of ASU 2016-09. The components of deferred income taxes included on the consolidated balance sheets are as follows: (In thousands) 2017 2016 Deferred tax assets: Allowance for doubtful accounts $ 7,707 $ 7,416 Inventory obsolescence 16,096 13,702 Insurance and contingencies 54,489 42,717 Stock-based compensation 73,027 45,720 Net operating loss and foreign related carry-forwards (1) 37,814 17,883 Treasury locks — 12,055 Other 25,891 8,100 215,024 147,593 Valuation allowance (18,088 ) (17,047 ) 196,936 130,546 Deferred tax liabilities: In service inventory 210,766 172,704 Property 126,872 93,784 Intangibles 290,049 104,585 Treasury locks 6,435 — State taxes and other 32,142 18,948 666,264 390,021 Net deferred tax liability $ 469,328 $ 259,475 (1) During fiscal 2017, the net operating loss increased primarily due to the G&K acquisition. The net operating loss related to the G&K acquisition is expected to be utilized by fiscal 2018 and will expire in 2037. 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) 2017 2016 Balance at beginning of year $ (17,047 ) $ (14,690 ) Additions (1,667 ) (3,437 ) Subtractions 626 1,080 Balance at end of year $ (18,088 ) $ (17,047 ) Income taxes paid were $ 269.6 million , $ 452.6 million and $ 236.7 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. Undistributed earnings of foreign subsidiaries were approximately $ 214.8 million , $ 117.2 million and $ 147.1 million as of May 31, 2017 , 2016 and 2015 , 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, 2017 and 2016 , there was $ 12.6 million and $ 12.9 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, 2017 and 2016 , was $ 0.9 million and $ 1.1 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 did not change in fiscal 2017 and increased in fiscal 2016 and fiscal 2015 by $ 0.8 million and $ 1.4 million , respectively. Accrued interest decreased by $0.2 million in fiscal 2017 and increased by $0.2 million in both fiscal 2016 and 2015 . 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, 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 Additions from G&K acquisition (1) 2,084 Additions for tax positions of prior years 2,520 Settlements (2) (1,044 ) Statute expirations (2,734 ) Balance at May 31, 2017 $ 17,357 (1) Increase in unrecognized tax benefit associated with unrecognized benefits assumed in the G&K acquisition. (2) Decrease in unrecognized tax benefit associated with the settlement of a fiscal 2012 Internal Revenue Service audit. 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 ended 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 2013. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2012. Based on the resolution of the various audits and other potential regulatory developments, it is expected that the balance of unrecognized tax benefits will not change for the fiscal year ending May 31, 2018 . |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
May 31, 2017 | |
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 2017 , Cintas acquired three businesses included in the Uniform Rental and Facility Services reportable operating segment, including the G&K acquisition discussed below, four businesses included in the First Aid and Safety Services reportable operating segment and eleven businesses included in All Other. During fiscal 2016 , Cintas acquired two business included in the Uniform Rental and Facility Services reportable operating segment, two businesses included in the First Aid and Safety Services reportable operating segment, including the ZEE acquisition discussed below, and six businesses included in All Other. The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired: (In thousands) 2017 2016 Fair value of tangible assets acquired $ 550,491 $ 26,759 Fair value of service contracts acquired 529,235 55,694 Fair value of other intangibles acquired 17,556 4,639 Net goodwill recognized 1,507,554 97,097 Total fair value of assets acquired 2,604,836 184,189 Fair value of liabilities assumed 502,465 27,610 Total cash paid for acquisitions $ 2,102,371 $ 156,579 G&K Acquisition On March 21, 2017, Cintas completed the acquisition of G&K for consideration of approximately $2.1 billion . Pursuant to the Merger Agreement, each share of common stock of G&K issued and outstanding immediately prior to the effective time of the G&K acquisition was canceled and converted into the right to receive $97.50 in cash. The total purchase price was $2,078.4 million , which was funded using a combination of new senior notes, a term loan, other borrowings under our existing credit facility and cash on hand. The net consideration transferred for G&K consisted of the following items: (In thousands) Cash consideration for common stock $ 1,901,845 (1) Cash consideration for share-based awards 62,257 (2) Cash consideration for G&K revolving debt 124,180 (3) Cash consideration for transaction expenses 24,529 (4) Total consideration 2,112,811 Cash acquired (34,393 ) (5) Net consideration transferred $ 2,078,418 (1) The cash consideration for outstanding shares of G&K common stock is the product of the agreed-upon cash per share price of $97.50 and total G&K outstanding shares of approximately 19.5 million . (2) The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $97.50 and the total number of restricted stock outstanding and the “in the money” stock options net of the weighted average exercise price. (3) The cash consideration for G&K revolving debt reflects the repayment of the outstanding obligation. (4) Represents G&K legal and professional fees that were incurred prior to acquisition and were due upon the closing of the transaction. (5) Represents the G&K cash balance acquired at acquisition. Preliminary Purchase Price Allocation Cintas accounted for the G&K acquisition using the acquisition method. The preliminary allocation of the purchase price was determined by management with the assistance of third-party valuation specialists, and is based on estimates of the fair value of assets acquired and liabilities assumed as of March 21, 2017. Cintas is continuing to obtain information to determine the fair value of acquired assets and liabilities, including tax assets, liabilities and other attributes. The components of the preliminary purchase price allocation, at fair value, are as follows: Assets: March 21, 2017 Accounts receivable $ 95,846 Inventories 30,254 Uniforms and other rental items in service 93,659 Income taxes, current 14,626 Prepaid expenses and other current assets 43,235 Property and equipment 254,035 Goodwill 1,493,211 Service contracts 519,000 Trade names 17,000 Other assets 15,585 Liabilities: Accounts payable (53,220 ) Accrued compensation and related liabilities (9,594 ) Accrued liabilities (115,109 ) Long term accrued liabilities (28,380 ) G&K Senior notes (105,359 ) Deferred income taxes (186,371 ) Total consideration $ 2,078,418 The preliminary fair value of the intangible assets has been estimated using the income approach through a discounted cash flow analysis (except as noted below with respect to the trade names) with the cash flow projections discounted using a rate of 9.5% . The cash flows are based on estimates used to price the G&K acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from Cintas’ pricing model and the weighted average cost of capital. The G&K service contract intangible asset will be amortized over a period of 15 years , which represents the estimated useful life of the economic benefit and the asset amortization is based on the annual economic value of the underlying asset which generally decreases over the 15 -year term. The trade names represent the G&K corporate trade name and all of the branded variations thereof. Cintas applied the income approach through a relief from royalty method analysis to determine the preliminary fair value of the trade name assets. The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets: Identifiable intangible assets: Preliminary Valuation Amortization Period Service contracts $ 519,000 15 years Trade names 17,000 3 years Total $ 536,000 Cintas estimated the preliminary fair value of the acquired property, plant and equipment using a combination of the cost and market approaches, depending on the type of asset. The preliminary fair value of property, plant and equipment consisted of real property of $141.8 million and personal property of $112.2 million . Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. None of the goodwill is expected to be deductible for income tax purposes. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the G&K acquisition. These benefits include improved service capabilities, an enhanced footprint in the markets that we serve, attractive synergy opportunities and value creation. The goodwill is entirely allocated to the Uniform Rental and Facility Services reportable operating segment. The following unaudited pro forma information presents the combined financial results for Cintas and G&K as if the G&K acquisition had been completed at the beginning of Cintas’ prior fiscal year, June 1, 2015. Prior to the acquisition, G&K used a 52-week or 53-week fiscal year ending on the Saturday nearest June 30. The pro forma financial information set forth below for the year ended May 31, 2016 includes G&K's annual results for the period of June 28, 2015 through July 2, 2016 adjusted for number of working days in Cintas' fiscal 2016. The pro forma financial information for the year ended May 31, 2017 includes G&K's publicly reported results for the period of July 2, 2016 through December 31, 2016 annualized and adjusted for the number of work days in the stub period of June 1, 2016 through March 21, 2017 and the actual results from March 22, 2017 through May 31, 2017. Actual net sales and net income of the acquired G&K business included in reported fiscal 2017 results were $187.7 million and $5.7 million , respectively. In thousands except per share data 2017 2016 Net sales $ 6,107,109 $ 5,762,741 Net income $ 488,482 $ 520,224 Earnings per common share - diluted $ 4.45 $ 4.66 The information above does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, and does not reflect future events that may occur after May 31, 2017 or any operating efficiencies or inefficiencies that may result from the G&K acquisition and related financing. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that Cintas will experience going forward. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including business acquisitions). The working capital assets and liabilities, as well as the property and equipment acquired, were valued using Level 2 inputs which included data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets (market approach). Goodwill, service contracts and other intangibles were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flow using a discount rate of 9.5% (income approach). Significant increases (decreases) in any of those unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement. Management utilizes third-party valuation firms to assist in the determination of purchase accounting fair values, and specifically those considered Level 3 measurements. Management ultimately oversees the third-party valuation firms to ensure that the transaction-specific assumptions are appropriate for Cintas. ZEE Acquisition 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. Purchase Price Allocation Cintas accounted for the ZEE acquisition using the acquisition method. The final purchase price allocation was determined by management with the assistance of third-party valuation specialists, and was based on estimates of the fair value of assets acquired and liabilities assumed as of August 1, 2015. The components of the final purchase price allocation, at fair value, are as follows: Assets: Cash and cash equivalents $ 333 Accounts receivable 16,705 Inventory 5,987 Other current assets 1,443 Property, plant and equipment 849 Goodwill 87,442 Service contracts 34,000 Other intangibles 4,500 Liabilities: Accounts payable (7,195 ) Accrued liabilities (4,428 ) Deferred income taxes (5,636 ) Total consideration $ 134,000 The fair value of the intangible assets was estimated using the income approach through a discounted cash flow analysis with the cash flow projections discounted using a rate of 11% . The cash flows are based on estimates used to price the ZEE acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from Cintas’ pricing model and the weighted average cost of capital. The ZEE service contract intangible asset will be amortized over a period of 10 years . 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 factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the ZEE acquisition. These benefits include improved service capabilities, an enhanced footprint in the markets that we serve, attractive synergy opportunities and value creation. The goodwill is entirely allocated to the First Aid and Safety reportable operating segment. 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). Significant increases (decreases) in any of those unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement. Management utilizes third-party valuation firms to assist in the determination of purchase accounting fair values, and specifically those considered Level 3 measurements. Management ultimately oversees the third-party valuation firms to ensure that the transaction-specific assumptions are appropriate for Cintas. 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 pro forma revenue, net income and earnings per share information relating to acquired businesses, excluding G&K, 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. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Pension Plans In conjunction with the acquisition of G&K, Cintas assumed G&K's noncontributory defined benefit pension plan (the Pension Plan) that covers substantially all G&K employees who were employed as of July 1, 2005, except certain employees who were covered by union-administered plans. Benefits are based on the number of years of service and each employee’s compensation near retirement. We will make annual contributions to the Pension Plan consistent with federal funding requirements. The Pension Plan was frozen by G&K effective December 31, 2006. Future growth in benefits will not occur beyond this date. Applicable accounting standards require that the Consolidated Balance Sheet reflect the funded status of the pension plan. The funded status of the Pension Plan is measured as the difference between the plan assets at fair value and the projected benefit obligation. We do not expect to make any contributions to the Pension Plan over the next 12 months that exceed the fair value of plan assets as of May 31, 2017. The net pension liability at May 31, 2017 is included in the Long-Term Accrued Liabilities on the Consolidated Balance Sheet. Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in Accumulated Other Comprehensive Income in our Consolidated Balance Sheet. The difference between actual amounts and estimates based on actuarial assumptions are recognized in other comprehensive income in the period in which they occur. The estimated amortization from accumulated other comprehensive income into net periodic benefit cost during fiscal year 2018 is immaterial. Obligations and Funded Status at May 31, 2017 Change in benefit obligation: Projected benefit obligation, beginning of year $ — Projected benefit obligation acquired in G&K acquisition 84,553 Interest cost 562 Actuarial loss 2,750 Benefits paid (478 ) Projected benefit obligation, end of year $ 87,387 Change in plan assets: Fair value of plan assets, beginning of year $ — Plan assets acquired in G&K acquisition 57,747 Actual return on plan assets 2,127 Benefits paid (478 ) Fair value of plan assets, end of year $ 59,396 Funded status-net amount recognized $ (27,991 ) The accrued benefit liability of $28.0 million was included in long-term accrued liabilities on the Consolidated Balance Sheet as of May 31, 2017. The unrecognized net actuarial loss of $1.2 million related to the Pension Plan was included in accumulated other comprehensive loss on the Consolidated Balance Sheet as of May 31, 2017. Components of Net Periodic Benefit Cost 2017 (1) Interest cost $ 562 Expected return on assets (590 ) Amortization of net loss — Net periodic benefit cost $ (28 ) (1) Represents the net periodic benefit cost for the period subsequent to the acquisition of G&K on March 21, 2017 through May 31, 2017. Assumptions The following weighted average assumptions were used to determine benefit obligations for the Pension Plan at May 31, 2017: Discount rate 3.79 % Rate of compensation increase N/A The following weighted average assumptions were used to determine net periodic benefit cost for the Pension Plan for the fiscal year ended May 31, 2017: Discount rate 4.00 % Expected return on plan assets 5.40 % Rate of compensation increase N/A Plan Assets The target asset allocation and actual asset allocation of the Pension Plan at May 31, 2017 are as follows: Target Asset Allocation Actual Asset Allocation International equity 8.0 % 8.3 % Large cap equity 26.0 % 26.3 % Small cap equity 5.0 % 5.3 % Absolute return strategy funds 16.0 % 16.2 % Fixed income 45.0 % 43.6 % Long/short equity fund — % 0.3 % Total 100 % 100 % Our investment committee, assisted by outside consultants, evaluates the objectives and investment policies concerning our long-term investment goals and asset allocation strategies. Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. To develop the expected long-term rate of return on asset assumptions, we consider the historical returns and future expectations of returns for each asset class, as well as the target asset allocation, changes in investments expenses and investment goals of the pension portfolio. This resulted in the selection of 5.40% expected return on plan assets for fiscal year 2017. The investment goals are (1) to meet or exceed the assumed actuarial rate of return over the long term within reasonable and prudent levels of risk, and (2) to preserve the real purchasing power of assets to meet future obligations. The nature and duration of benefit obligations, along with assumptions concerning asset class returns and return correlations, are considered when determining an appropriate asset allocation to achieve the investment objectives. Pension plan assets for our qualified pension plans are held in a trust for the benefit of the plan participants and are invested in a diversified portfolio of equity investments, fixed income investments and cash. Risk targets are established and monitored against acceptable ranges. All investment policies and procedures are designed to ensure that the plans' investments are in compliance with the Employee Retirement Income Security Act. Guidelines are established defining permitted investments within each asset class. The implementation of the investment strategy discussed above is executed through a variety of investment types, including U.S. government securities, corporate debt and mutual funds. These investments are valued at the closing price reported on the active market on which the individual securities are traded. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our 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 fair value measurement at the reporting date. The following table presents the Pension Plan investments as of May 31, 2017 using the fair value hierarchy discussed in Note 1 entitled Significant Accounting Polices: (Level 1) (Level 2) (Level 3) Total Cash equivalents $ 629 $ — $ — $ 629 U.S. government securities 1,874 3,401 — 5,275 Corporate debt — 20,210 — 20,210 Mutual funds U.S. securities 28,353 — — 28,353 International securities 4,929 — — 4,929 Total $ 35,785 $ 23,611 $ — $ 59,396 We don't expect to make any contributions to the Pension Plan during the next 12 months. Future changes in plan asset returns, assumed discount rates and various other factors related to the Pension Plan will impact future pension expense and liabilities. We cannot predict the impact of these changes in the future and any changes may have a material impact on our results of operations and financial position. Estimated Future Benefit Payments The following Pension Plan benefit payments are expected to be paid: 2018 $ 2,966 2019 3,110 2020 3,317 2021 3,548 2022 3,686 2023 to 2027 20,423 Cintas administers a pension plan that was assumed in a previous acquisition and has historically been deemed immaterial for disclosure purposes. As of May 31, 2017 and 2016, the fair value of this pension plan's total assets was $7.1 million and $6.5 million , respectively and the projected benefit obligation was $7.5 million and $7.7 million , respectively. For the years ended May 31, 2017 and 2016, the net periodic benefit cost recorded for this plan was an expense of $0.1 million and income of $0.1 million , respectively. Non-Contributory Retirement 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 $ 47.5 million , $ 43.1 million and $ 38.4 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , 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 $ 1.8 million , $ 1.6 million and $ 1.5 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , 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 $ 6.9 million , $ 6.6 million and $ 6.1 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. |
Earnings per Share
Earnings per Share | 12 Months Ended |
May 31, 2017 | |
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) 2017 2016 2015 Basic Earnings per Share from Continuing Operations Income from continuing operations $ 457,286 $ 448,605 $ 402,553 Less: income from continuing operations allocated to participating securities 8,168 7,131 3,771 Income from continuing operations available to common shareholders $ 449,118 $ 441,474 $ 398,782 Basic weighted average common shares outstanding 104,964 108,221 115,900 Basic earnings per share from continuing operations $ 4.27 $ 4.08 $ 3.44 (In thousands except per share data) 2017 2016 2015 Diluted Earnings per Share from Continuing Operations Income from continuing operations $ 457,286 $ 448,605 $ 402,553 Less: income from continuing operations allocated to participating securities 8,168 7,131 3,771 Income from continuing operations available to common shareholders $ 449,118 $ 441,474 $ 398,782 Basic weighted average common shares outstanding 104,964 108,221 115,900 Effect of dilutive securities – employee stock options 2,819 1,735 1,643 Diluted weighted average common shares outstanding 107,783 109,956 117,543 Diluted earnings per share from continuing operations $ 4.17 $ 4.02 $ 3.39 Basic and diluted earnings per share from discontinued operations were calculated using the two-class method. Basic earnings per share from discontinued operations were $0.22 , $2.22 and $0.24 for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. Diluted earnings per share from discontinued operations were $0.21 , $2.19 and $0.24 for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. For the fiscal years ended May 31, 2017 , 2016 and 2015 , options granted to purchase 0.6 million , 0.5 million and 0.6 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 $500.0 million share buyback program. This program was completed in June 2016. On August 6, 2016, 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) 2017 2016 2015 Buyback Program Shares Avg. Price per Share Purchase Price 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 39 $ 94.09 $ 3,691 5,649 $ 87.85 $ 496,309 — $ — $ — August 6, 2016 — $ — $ — — $ — $ — — $ — $ — 39 $ 94.09 $ 3,691 8,727 $ 87.00 $ 759,237 6,851 $ 78.47 $ 537,572 There were no share buybacks subsequent to May 31, 2017 through July 31, 2017 . 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, 2017 , Cintas acquired 0.2 million shares at an average price of $101.37 per share for a total purchase price of $17.0 million . 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 . |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
May 31, 2017 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On August, 2, 2016, the Board of Directors approved and adopted the Cintas Corporation 2016 Equity and Incentive Compensation Plan (the 2016 Plan) to replace the Cintas' 2005 Equity Compensation Plan, as amended (the 2005 Plan). The 2016 Plan was approved by Cintas shareholders at its Annual Meeting on October 18, 2016, at which time the 2016 Plan became effective. Under the 2016 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 12,500,000 shares of Cintas' common stock. Any shares of common stock that remained available under the 2005 Plan became part of the total available share balance of 12,500,000 shares under the 2016 Plan. At May 31, 2017 , 12,444,826 shares of common stock are reserved for future issuance under the 2016 Plan. Total compensation cost for stock-based awards for continuing operations was $87.5 million , $77.8 million and $43.8 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements for continuing operations was $ 32.5 million , $ 28.3 million and $ 16.3 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , 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: 2017 2016 2015 Risk-free interest rate 1.2 % 2.0 % 2.0 % Dividend yield 1.3 % 1.4 % 1.6 % Expected volatility of Cintas' common stock 21.6 % 23.3 % 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 2017 , 2016 and 2015 was $ 25.59 , $ 22.20 and $ 20.64 , respectively. The information presented in the following table relates primarily to stock options granted and outstanding under either the 2016 Plan or under previously adopted plans: Shares Weighted Average Exercise Price Outstanding, June 1, 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 Granted 1,500,465 123.20 Canceled (328,105 ) 83.03 Exercised (1,004,217 ) 35.95 Outstanding, May 31, 2017 (1,795,898 shares exercisable) 8,588,050 $ 74.77 The intrinsic value of stock options exercised was $76.5 million , $48.5 million and $44.3 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. The total cash received from employees as a result of employee stock option exercises for the fiscal years ended May 31, 2017 , 2016 and 2015 was $ 31.9 million , $28.2 million and $40.2 million , respectively. The fair value of stock options vested was $ 12.7 million , $ 11.0 million and $ 10.9 million for the fiscal years ended May 31, 2017 , 2016 and 2015 , respectively. The following table summarizes the information related to stock options outstanding at May 31, 2017 : Outstanding Options Exercisable Options Range of Exercise Prices Number Outstanding Average Remaining Option Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 22.42 – $ 46.91 1,972,643 4.37 $ 35.38 1,488,169 $ 34.04 46.92 – 66.27 2,204,240 6.79 58.09 278,065 51.63 66.28 – 89.78 1,604,071 8.12 85.51 15,324 71.17 89.79 – 126.54 2,807,096 9.54 116.29 14,340 90.68 $ 22.42 – $ 126.54 8,588,050 7.38 $ 74.77 1,795,898 $ 37.53 At May 31, 2017 , the aggregate intrinsic value of stock options outstanding and exercisable was $ 419.6 million and $ 158.7 million , respectively. The weighted-average remaining contractual term of stock options exercisable is 4.5 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 2016 Plan or under previously adopted plans: Shares Weighted Average Grant Price Outstanding, unvested grants at June 1, 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 Granted 681,461 125.29 Canceled (114,151 ) 89.28 Vested (428,672 ) 48.67 Outstanding, unvested grants at May 31, 2017 2,742,074 $ 95.09 The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2017 was $ 204.5 million . The weighted-average period of time over which this cost will be recognized is 1.8 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
May 31, 2017 | |
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) Gain on Cash Flow Hedges Other Total 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 ) Other comprehensive (loss) income before reclassifications (10,252 ) 31,136 (115 ) 20,769 Amounts reclassified from accumulated other comprehensive income (loss) — 1,076 — 1,076 Net current period other comprehensive (loss) income (10,252 ) 32,212 (115 ) 21,845 Balance at May 31, 2017 $ (12,726 ) $ 11,382 $ (1,685 ) $ (3,029 ) The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) during the fiscal years ended May 31: Reclassifications out of Accumulated Other Comprehensive Income (Loss) Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line in the Consolidated Statements of Income (in thousands) 2017 2016 Amortization of interest rate locks $ (1,714 ) $ (3,130 ) Interest expense Tax benefit 638 1,178 Income taxes Amortization of interest rate locks, net of tax $ (1,076 ) $ (1,952 ) Net of tax (in thousands) 2017 2016 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 in fiscal 2016. |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
May 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Operating Segment Information U.S. GAAP requires companies to evaluate their reportable operating segments periodically and when certain events occur. As a result of our 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, which includes G&K, consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies, carpet and tile cleaning services and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of Fire Protection Services and its Uniform Direct Sale business, is included in All Other. Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled 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, 2017 Revenue $ 4,202,490 $ 508,233 $ 612,658 $ — $ 5,323,381 Gross margin $ 1,894,716 $ 230,166 $ 255,413 $ — $ 2,380,295 Selling and administrative expenses 1,138,345 177,378 211,657 — 1,527,380 G&K Services, Inc. transaction and integration expenses 79,224 79,224 Interest expense, net — — — 86,287 86,287 Income before income taxes $ 677,147 $ 52,788 $ 43,756 $ (86,287 ) $ 687,404 Depreciation and amortization $ 156,998 $ 19,962 $ 17,905 $ 1,730 $ 196,595 Capital expenditures $ 232,832 $ 26,863 $ 12,645 $ 977 $ 273,317 Total assets $ 5,801,680 $ 444,717 $ 367,562 $ 230,098 $ 6,844,057 May 31, 2016 Revenue $ 3,759,524 $ 461,783 $ 574,465 $ — $ 4,795,772 Gross margin $ 1,666,691 $ 197,010 $ 237,639 $ — $ 2,101,340 Selling and administrative expenses 994,590 147,503 190,306 — 1,332,399 Interest expense, net — — — 63,626 63,626 Income before income taxes $ 672,101 $ 49,507 $ 47,333 $ (63,626 ) $ 705,315 Depreciation and amortization $ 130,421 $ 16,021 $ 16,879 $ 1,958 $ 165,279 Capital expenditures $ 237,871 $ 22,364 $ 14,840 $ 310 $ 275,385 Total assets $ 3,104,822 $ 421,697 $ 322,474 $ 249,822 $ 4,098,815 May 31, 2015 Revenue $ 3,519,199 $ 326,593 $ 523,885 $ — $ 4,369,677 Gross margin $ 1,526,534 $ 152,339 $ 214,050 $ — $ 1,892,923 Selling and administrative expenses 922,582 107,226 179,476 — 1,209,284 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 $ 603,952 $ 45,113 $ 34,574 $ (43,083 ) $ 640,556 Depreciation and amortization $ 123,129 $ 9,774 $ 16,909 $ 2,783 $ 152,595 Capital expenditures $ 184,200 $ 13,589 $ 18,528 $ 1,403 $ 217,720 Total assets $ 2,831,978 $ 254,707 $ 299,885 $ 799,104 $ 4,185,674 (1) Corporate assets include cash and marketable securities in all periods presented. Corporate assets as of May 31, 2017 and 2016 also include the assets of Discontinued Services. Corporate assets as of May 31, 2015 also include assets of Discontinued Services, Shred-it and real estate assets of Storage that were not included in the sale transactions. Corporate depreciation and amortization includes depreciation and amortization of Discontinued Services. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
May 31, 2017 | |
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, 2017 and 2016 : May 31, 2017 (in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,266,650 $ 1,271,077 $ 1,255,367 $ 1,530,287 Gross margin $ 576,427 $ 565,218 $ 559,924 $ 678,726 Net income, continuing operations $ 136,208 $ 121,950 $ 116,954 $ 82,174 Basic earnings per share, continuing operations $ 1.27 $ 1.15 $ 1.09 $ 0.76 Diluted earnings per share, continuing operations $ 1.24 $ 1.12 $ 1.06 $ 0.75 Weighted average number of shares outstanding 104,483 104,957 105,093 105,325 May 31, 2016 (in thousands) (1) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,170,564 $ 1,191,121 $ 1,190,539 $ 1,243,548 Gross margin $ 516,895 $ 520,221 $ 517,853 $ 546,371 Net income, continuing operations $ 104,325 $ 113,447 $ 115,122 $ 115,711 Basic earnings per share, continuing operations $ 0.93 $ 1.03 $ 1.05 $ 1.07 Diluted earnings per share, continuing operations $ 0.92 $ 1.01 $ 1.03 $ 1.06 Weighted average number of shares outstanding 110,597 108,301 107,843 106,136 (1) The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
May 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations At May 31, 2017, Cintas has classified a significant business, referred to as Discontinued Services, as held for sale. Prior to meeting the held for sale criteria, Discontinued Services was primarily included in All Other. Additionally, 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 Discontinued Services, Shredding and Storage have been excluded from both continuing operations and operating segment results for all periods presented. At May 31, 2015, the carrying value of Shred-it was $210.1 million . In the fourth quarter of fiscal 2015, the Company received a dividend from 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 . In conjunction with the Shred-it 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. Cintas provides the following unaudited summary information regarding the Shred-it Partnership's results of operations for the twelve months ended April 30, 2015: 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. 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 of Shred-it, the basis differences no longer exist and Cintas no longer records income or loss from Shred-it. In fiscal 2017, we received additional proceeds related to the sale of Shred-it. Cintas realized a pre-tax gain of $25.5 million as a result of the additional consideration received. Cintas still has the opportunity to receive additional consideration, subject to certain holdback provisions. Because of the uncertainty surrounding the holdback provisions, this opportunity represents a gain contingency that has not been recorded as of May 31, 2017. 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 . In fiscal 2017, Cintas received additional proceeds related to the sale of Storage and recorded a pre-tax gain of $2.4 million . Following is selected financial information included in net income from discontinued operations for the Discontinued Services, Shredding and Storage businesses: (In thousands) 2017 2016 (1) 2015 (1) Revenue $ 105,559 $ 109,686 $ 138,584 Income before income taxes, excluding gains (losses) from sale transactions and investments 10,622 13,242 9,253 Gain on Storage transactions 2,400 15,786 38,573 Gain (loss) on Shred-it 25,457 354,071 (3,851 ) Income tax expense (15,057 ) (138,184 ) (15,910 ) Net income from discontinued operations $ 23,422 $ 244,915 $ 28,065 (1) Results for the fiscal years ended May 31, 2016 and 2015 related to Discontinued Services were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed. |
G & K Services, Inc. Transactio
G & K Services, Inc. Transaction and Integration Expenses | 12 Months Ended |
May 31, 2017 | |
Business Combinations [Abstract] | |
G & K Services, Inc. Transaction and Integration Expenses | G&K Services, Inc. Transaction and Integration Expenses As a result of the acquisition of G&K in fiscal 2017, the Company incurred $79.2 million in transaction and integration expenses. These expenses consisted of asset impairment charges of $23.3 million and other transaction and integration expenses of $55.9 million . These asset impairment charges and other transaction and integration expenses are included in a single line in the Consolidated Statements of Income and are reported by operating segment in Note 14 entitled Operating Segment Information. Our accounting policy for long-lived assets is described in Note 1 entitled Significant Accounting Policies. The asset impairment charges of $23.3 million relate to the write-down of machinery and equipment and other fixed assets to their fair value in G&K plants and branches that were identified by the Company on April 30, 2017 for future closure. The Company has determined that these assets cannot be used for other purposes, and the undiscounted projected future cash flows associated with these assets are less than their carrying value at April 30, 2017. The fair value utilized for purposes of the asset impairment analysis was determined by using Level 2 inputs based on both the cost and market approaches. The other transaction and integration expenses consisted of the following: $17.4 million of legal and professional fees directly related to the acquisition, $31.0 million of employee termination expenses recognized under ASC Topic 712, "Compensation - Nonretirement Postemployment Benefits," $5.5 million write-off of excess inventory and $2.0 million of other miscellaneous integration expenses. The amount of employee termination benefits paid in fiscal 2017 was $6.7 million , resulting in a related liability balance as of May 31, 2017 of $24.3 million . |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 12 Months Ended |
May 31, 2017 | |
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 $ 3,156.0 million aggregate principal amount of outstanding debt, which is 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. During fiscal 2017, the Company merged a legal entity previously included in subsidiary guarantors into Corp. 2. This restructuring has been reflected as of the beginning of the earliest period presented herein. Additionally, in conjunction with the G&K acquisition, the acquired U.S. legal entities are included in Corp. 2 and the acquired Canadian legal entities are included with the Non-guarantors. 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, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 3,511,483 $ 604,679 $ 257,288 $ (170,960 ) $ 4,202,490 Other — 1,604,877 1,810 73,006 (558,802 ) 1,120,891 Equity in net income of affiliates 457,286 — — — (457,286 ) — 457,286 5,116,360 606,489 330,294 (1,187,048 ) 5,323,381 Costs and expenses (income): Cost of uniform rental and facility services — 2,021,365 378,404 164,969 (256,964 ) 2,307,774 Cost of other — 1,070,780 (41,509 ) 56,210 (450,169 ) 635,312 Selling and administrative expenses — 1,686,209 (220,887 ) 87,672 (25,614 ) 1,527,380 G&K Services, Inc. transaction and integration expenses — 51,868 19,060 8,296 — 79,224 Operating income 457,286 286,138 471,421 13,147 (454,301 ) 773,691 Interest income — (26 ) (191 ) (22 ) 2 (237 ) Interest expense (income) — 89,706 (2,978 ) (204 ) — 86,524 Income before income taxes 457,286 196,458 474,590 13,373 (454,303 ) 687,404 Income taxes — 65,829 159,025 5,365 (101 ) 230,118 Income from continuing operations 457,286 130,629 315,565 8,008 (454,202 ) 457,286 Income from discontinued operations, net of tax 23,422 22,287 — 1,135 (23,422 ) 23,422 Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 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 $ — $ 3,147,844 $ 553,414 $ 213,526 $ (155,260 ) $ 3,759,524 Other — 1,484,556 8,540 66,270 (523,118 ) 1,036,248 Equity in net income of affiliates 448,605 — — — (448,605 ) — 448,605 4,632,400 561,954 279,796 (1,126,983 ) 4,795,772 Costs and expenses (income): Cost of uniform rental and facility services — 1,835,835 350,500 142,601 (236,103 ) 2,092,833 Cost of other — 1,001,576 (40,741 ) 48,539 (407,775 ) 601,599 Selling and administrative expenses — 1,497,106 (206,889 ) 69,257 (27,075 ) 1,332,399 Operating income 448,605 297,883 459,084 19,399 (456,030 ) 768,941 Interest income — — (666 ) (232 ) 2 (896 ) Interest expense (income) — 65,534 (1,027 ) 15 — 64,522 Income before income taxes 448,605 232,349 460,777 19,616 (456,032 ) 705,315 Income taxes — 82,783 164,169 9,874 (116 ) 256,710 Income from continuing operations 448,605 149,566 296,608 9,742 (455,916 ) 448,605 Income (loss) from discontinued operations, net of tax 244,915 250,625 — (5,837 ) (244,788 ) 244,915 Net income $ 693,520 $ 400,191 $ 296,608 $ 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 $ — $ 2,919,526 $ 507,481 $ 229,391 $ (137,199 ) $ 3,519,199 Other — 1,303,204 (8,173 ) 57,349 (501,902 ) 850,478 Equity in net income of affiliates 402,553 — — — (402,553 ) — 402,553 4,222,730 499,308 286,740 (1,041,654 ) 4,369,677 Costs and expenses (income): Cost of uniform rental and facility services — 1,781,651 271,512 154,601 (215,099 ) 1,992,665 Cost of other — 830,459 11,028 37,628 (395,026 ) 484,089 Selling and administrative expenses — 1,343,361 (182,290 ) 74,523 (26,310 ) 1,209,284 Operating income 402,553 267,259 399,058 19,988 (405,219 ) 683,639 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 402,553 200,973 422,181 20,070 (405,221 ) 640,556 Income taxes 74,307 156,097 7,665 (66 ) 238,003 Income from continuing operations 402,553 126,666 266,084 12,405 (405,155 ) 402,553 Income from discontinued operations, net of tax 28,065 23,271 — 4,596 (27,867 ) 28,065 Net income $ 430,618 $ 149,937 $ 266,084 $ 17,001 $ (433,022 ) $ 430,618 Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (10,252 ) — — (10,252 ) 10,252 (10,252 ) Change in fair value of cash flow hedges 31,136 31,136 — — (31,136 ) 31,136 Amortization of interest rate lock agreements 1,076 1,076 — — (1,076 ) 1,076 Other (115 ) — (115 ) — 115 (115 ) Other comprehensive income (loss) 21,845 32,212 (115 ) (10,252 ) (21,845 ) 21,845 Comprehensive income (loss) $ 502,553 $ 185,128 $ 315,450 $ (1,109 ) $ (499,469 ) $ 502,553 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 $ 400,191 $ 296,608 $ 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 cash flow hedges — (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 $ 395,862 $ 295,878 $ (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 $ 149,937 $ 266,084 $ 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 cash flow hedges — — — 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 $ 151,889 $ 265,723 $ (21,489 ) $ (433,022 ) $ 393,719 Condensed Consolidating Balance Sheet As of May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 48,658 $ 17,302 $ 103,306 $ — $ 169,266 Marketable securities — — — 22,219 — 22,219 Accounts receivable, net — 543,769 137,881 54,358 — 736,008 Inventories, net — 243,677 21,466 14,461 (1,386 ) 278,218 Uniforms and other rental items in service — 531,295 78,012 45,388 (18,993 ) 635,702 Income taxes, current — 16,173 25,138 3,009 — 44,320 Prepaid expenses and other current assets — 13,234 16,188 710 — 30,132 Assets held for sale — 23,095 15,518 — — 38,613 Total current assets — 1,419,901 311,505 243,451 (20,379 ) 1,954,478 Property and equipment, at cost, net — 851,018 364,724 107,759 — 1,323,501 Investments (1) 321,083 3,605,457 929,657 1,711,070 (6,402,479 ) 164,788 Goodwill — — 2,742,898 39,549 (112 ) 2,782,335 Service contracts, net — 505,698 — 81,290 — 586,988 Other assets, net 1,516,463 14,705 3,489,653 11,983 (5,000,837 ) 31,967 $ 1,837,546 $ 6,396,779 $ 7,838,437 $ 2,195,102 $ (11,423,807 ) $ 6,844,057 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,596,731 ) $ 2,292,388 $ (91,467 ) $ 38,108 $ 177,051 Accrued compensation and related liabilities — 94,505 42,866 12,264 — 149,635 Accrued liabilities — 191,819 219,303 18,687 — 429,809 Liabilities held for sale — 11,457 — — — 11,457 Debt due within one year — 362,900 — — — 362,900 Total current liabilities (465,247 ) (936,050 ) 2,554,557 (60,516 ) 38,108 1,130,852 Long-term liabilities: Debt due after one year — 2,770,234 — 390 — 2,770,624 Deferred income taxes — — 436,613 32,715 — 469,328 Accrued liabilities — 28,384 140,923 1,153 — 170,460 Total long-term liabilities — 2,798,618 577,536 34,258 — 3,410,412 Total shareholders' equity 2,302,793 4,534,211 4,706,344 2,221,360 (11,461,915 ) 2,302,793 $ 1,837,546 $ 6,396,779 $ 7,838,437 $ 2,195,102 $ (11,423,807 ) $ 6,844,057 (1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million , respectively, of the $164.8 million consolidated net investments. 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 $ — $ 57,894 $ 55,391 $ 26,072 $ — $ 139,357 Marketable securities — — — 70,405 — 70,405 Accounts receivable, net — 413,645 97,516 35,327 — 546,488 Inventories, net — 222,822 19,150 11,235 (3,845 ) 249,362 Uniforms and other rental items in service — 448,395 73,001 36,612 (19,722 ) 538,286 Income taxes, current — (151 ) 1,215 648 — 1,712 Prepaid expenses and other current assets — 6,708 18,278 962 — 25,948 Assets held for sale — 19,021 — — — 19,021 Total current assets — 1,168,334 264,551 181,261 (23,567 ) 1,590,579 Property and equipment, at cost, net — 614,111 305,636 73,945 — 993,692 Investments (1) 321,083 1,770,303 901,772 941,396 (3,809,602 ) 124,952 Goodwill — — 1,241,145 35,043 (112 ) 1,276,076 Service contracts, net — 75,941 13 2,240 — 78,194 Other assets, net 1,081,203 — 3,338,742 9,110 (4,414,772 ) 14,283 Long-term assets held for sale — 5,521 15,518 — — 21,039 $ 1,402,286 $ 3,634,210 $ 6,067,377 $ 1,242,995 $ (8,248,053 ) $ 4,098,815 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,775,092 ) $ 2,296,493 $ 16,781 $ 38,005 $ 110,940 Accrued compensation and related liabilities — 72,959 23,052 5,380 — 101,391 Accrued liabilities — 78,471 251,217 13,578 — 343,266 Liabilities held for sale — 9,958 — — — 9,958 Debt due within one year — 250,000 — — — 250,000 Total current liabilities (465,247 ) (1,363,704 ) 2,570,762 35,739 38,005 815,555 Long-term liabilities: Debt due after one year — 1,044,032 — 390 — 1,044,422 Deferred income taxes — (427 ) 252,149 7,753 — 259,475 Accrued liabilities — 19,628 116,091 985 — 136,704 Total long-term liabilities — 1,063,233 368,240 9,128 — 1,440,601 Total shareholders' equity 1,867,533 3,934,681 3,128,375 1,198,128 (8,286,058 ) 1,842,659 $ 1,402,286 $ 3,634,210 $ 6,067,377 $ 1,242,995 $ (8,248,053 ) $ 4,098,815 (1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $15.5 million and $109.5 million , respectively, of the $125.0 million consolidated net investments. Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 117,578 43,660 10,327 — 171,565 Amortization of intangible assets — 21,496 1,178 2,356 — 25,030 Stock-based compensation 88,868 — — — — 88,868 Gain on Storage — (1,460 ) — — — (1,460 ) Gain on Shred-it — (23,516 ) — (1,941 ) — (25,457 ) Asset impairment charge — 20,966 — 2,365 — 23,331 G&K Services, Inc. transaction and integration costs — 26,453 — 4,992 — 31,445 Short-term debt financing fees included in net income — 17,062 — — — 17,062 Settlement of cash flow hedges — 30,194 — — — 30,194 Deferred income taxes — (26,289 ) 26,058 4,133 — 3,902 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (50,012 ) (40,380 ) (3,165 ) — (93,557 ) Inventories, net — 7,787 (2,317 ) (3,679 ) (2,459 ) (668 ) Uniforms and other rental items in service — (4,951 ) (5,011 ) 1,959 (729 ) (8,732 ) Prepaid expenses and other current assets — 21,119 2,775 307 — 24,201 Accounts payable — 1,765,713 (1,509,215 ) (242,875 ) 103 13,726 Accrued compensation and related liabilities — (7,498 ) 19,815 1,337 — 13,654 Accrued liabilities and other — 2,813 (5,675 ) 2,361 — (501 ) Income taxes, current — (5,205 ) (22,445 ) (1,774 ) — (29,424 ) Net cash provided by (used in) operating activities 569,576 2,065,166 (1,175,992 ) (214,154 ) (480,709 ) 763,887 Cash flows from investing activities: Capital expenditures — (153,963 ) (102,682 ) (16,672 ) — (273,317 ) Proceeds from redemption of marketable securities — — — 218,324 — 218,324 Purchase of marketable securities and investments — 18,150 (797,559 ) 598,344 — (181,065 ) Proceeds from sale of Storage — 2,400 — — — 2,400 Proceeds from sale of Shred-it — 23,935 — 1,941 — 25,876 Acquisitions of businesses, net of cash acquired — (2,112,015 ) — 9,644 — (2,102,371 ) Other, net (438,344 ) (1,562,294 ) 2,039,740 (520,007 ) 480,709 (196 ) Net cash (used in) provided by investing activities (438,344 ) (3,783,787 ) 1,139,499 291,574 480,709 (2,310,349 ) Cash flows from financing activities: Proceeds from issuance of commercial paper, net — 50,500 — — — 50,500 Proceeds from issuance of debt, net — 1,932,229 (2,000 ) 2,000 — 1,932,229 Repayment of debt — (250,000 ) — — — (250,000 ) Payment of short-term debt financing fees — (17,062 ) — — — (17,062 ) Proceeds from exercise of stock-based compensation awards 31,870 — — — — 31,870 Dividends paid (142,378 ) — — (55 ) — (142,433 ) Repurchase of common stock (20,724 ) — — — — (20,724 ) Other, net — (6,282 ) 404 — — (5,878 ) Net cash (used in) provided by financing activities (131,232 ) 1,709,385 (1,596 ) 1,945 — 1,578,502 Effect of exchange rate changes on cash and cash equivalents — — — (2,131 ) — (2,131 ) Net (decrease) increase in cash and cash equivalents — (9,236 ) (38,089 ) 77,234 — 29,909 Cash and cash equivalents at beginning of year — 57,894 55,391 26,072 — 139,357 Cash and cash equivalents at end of year $ — $ 48,658 $ 17,302 $ 103,306 $ — $ 169,266 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 693,520 $ 400,191 $ 296,608 $ 3,905 $ (700,704 ) $ 693,520 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 102,443 37,883 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 ) Gain (loss) on Shred-it — (366,460 ) — 12,389 — (354,071 ) 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 — (30,381 ) (20,196 ) (2,185 ) — (52,762 ) Inventories, net — (23,917 ) 2,011 (2,454 ) 6,443 (17,917 ) Uniforms and other rental items in service — (3,193 ) (2,032 ) (1,840 ) 759 (6,306 ) Prepaid expenses and other current assets — (167 ) (914 ) 116 — (965 ) Accounts payable — (487,582 ) 491,918 (4,884 ) (16 ) (564 ) Accrued compensation and related liabilities — 9,838 3,103 571 — 13,512 Accrued liabilities and other — (3,790 ) 25,625 155 724 22,714 Income taxes, current — 895 (1,118 ) (577 ) — (800 ) Net cash provided by (used in) operating activities 772,813 (483,488 ) 855,217 14,097 (692,794 ) 465,845 Cash flows from investing activities: Capital expenditures — (162,075 ) (100,380 ) (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 — 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, net 94,344 169,821 (945,406 ) 1,897 683,481 4,137 Net cash provided by (used in) investing activities 94,344 473,949 (1,057,871 ) (75,559 ) 693,518 128,381 Cash flows from financing activities: Proceeds from the issuance 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, net — 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 — (16,738 ) (193,325 ) (67,653 ) — (277,716 ) Cash and cash equivalents at beginning of year — 74,632 248,716 93,725 — 417,073 Cash and cash equivalents at end of year $ — $ 57,894 $ 55,391 $ 26,072 $ — $ 139,357 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 430,618 $ 149,937 $ 266,084 $ 17,001 $ (433,022 ) $ 430,618 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 92,133 38,066 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 in 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 — 2,416 (5,141 ) 1,282 — (1,443 ) Inventories, net — 22,405 (405 ) (487 ) 2,272 23,785 Uniforms and other rental items in service — (24,203 ) (5,154 ) (2,764 ) 127 (31,994 ) Prepaid expenses and other current assets — (317 ) (2,768 ) (117 ) — (3,202 ) Accounts payable — (343,401 ) 310,050 (98 ) 4 (33,445 ) Accrued compensation and related liabilities — 3,345 1,226 (1,337 ) — 3,234 Accrued liabilities and other — (15,160 ) 41,882 6,322 22 33,066 Income taxes, current — 142 (5,939 ) (1,035 ) — (6,832 ) Net cash provided by (used in) operating activities 477,620 (126,587 ) 634,787 25,053 (430,597 ) 580,276 Cash flows from investing activities: Capital expenditures — (117,545 ) (85,713 ) (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, net 235,951 51,438 (773,575 ) 3,705 483,864 1,383 Net cash provided by (used in) investing activities 235,951 126,702 (785,377 ) 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, net — 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 — 889 (150,606 ) 53,502 — (96,215 ) Cash and cash equivalents at beginning of year — 73,743 399,322 40,223 — 513,288 Cash and cash equivalents at end of year $ — $ 74,632 $ 248,716 $ 93,725 $ — $ 417,073 |
Subsequent Event
Subsequent Event | 12 Months Ended |
May 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On July 11, 2017, Cintas sold Discontinued Services for a total sale price of $130.0 million . Effective May 31, 2017, Discontinued Services was classified as held for sale and was presented in discontinued operations for all periods presented herein. Revenue and diluted earnings per share for Discontinued Services was $105.6 million and $0.07 , respectively, for the fiscal year ended May 31, 2017, $109.7 million and $0.07 , respectively, for the fiscal year ended May 31, 2016, respectively and $107.2 million and $0.07 for the fiscal year ended May 31, 2015, respectively. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
May 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
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, 2015 $ 14,262 $ 5,289 $ 4,054 $ 15,497 May 31, 2016 $ 15,497 $ 8,274 $ 4,668 $ 19,103 May 31, 2017 $ 19,103 $ 6,446 $ 5,024 $ 20,525 Reserve for Obsolete Inventory May 31, 2015 $ 30,459 $ 2,952 $ 2,880 $ 30,531 May 31, 2016 $ 30,531 $ 5,195 $ 3,010 $ 32,716 May 31, 2017 $ 32,716 $ 10,049 $ 4,460 $ 38,305 (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 obsolescence. (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 Polici30
Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2017 | |
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. The Company’s results are affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies and changes in the prices of raw materials, can have a significant effect on operations. These factors and other events could cause actual results to differ from management's 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 services | 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 | The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. 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. |
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. Uniforms acquired in the G&K acquisition will be amortized over 12 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 facility services that are presented in the consolidated financial statements. |
Property and equipment | Property and equipment is stated at cost, less accumulated depreciation or at fair value upon acquisition. 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, prices of similar assets or third party real estate valuations, as appropriate. As a result of the identification of certain G&K plants and branches for future closure, an indicator of potential impairment was identified. Cintas recognized an impairment loss of $23.3 million during the year ended May 31, 2017, based on the excess of the carrying amount of asset over their respective fair values. The undiscounted cash flows used to test recoverability were performed, using Level 2 inputs based on both the cost and market approaches, at the lowest discernible level, which is at the location level. |
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 in fiscal 2016 and the acquisition of G&K in fiscal 2017, the composition of Cintas’ reporting units for the evaluation of goodwill impairment has changed. Cintas has identified six reporting units for purposes of evaluating goodwill impairment: Uniform Rental and Facility Services, G&K Services Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other. Given the proximity of the G&K acquisition date to the consolidated balance sheet date, the Company performed a high level qualitative analysis for its G&K reporting unit, which considered indicators of impairment to evaluate whether the fair value was more-likely-than-not in excess of its carrying value. The key indicators considered include macroeconomic conditions, industry/market considerations, financial performance, cash flow, changes in management, and composition of net assets. Based on the results of the annual impairment tests, Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2017 , 2016 or 2015 . 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 generally amortized by use of the straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years. The G&K service contract asset will be amortized over a period of 15 years which represents the estimated life of the economic benefit and the asset amortization is based on the annual economic value of the underlying asset which generally decreases over the 15 -year term. 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. |
Business Combinations | Accounting for acquisitions requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income. |
Debt Issuance Costs | Debt issuance costs for the revolving credit facility are included in other assets and all other debt issuance costs reduce the carrying amount of long-term debt. |
Accrued liabilities | General insurance liabilities represent the estimated ultimate cost of all asserted and unasserted claims incurred, primarily related to workers' 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. The increase in accrued liabilities from May 31, 2016 to May 31, 2017 is primarily related to the acquisition of G&K. 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 Employee Benefit Plans. Current accrued liabilities are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. |
Pension Plans | The Company assumed G&K's noncontributory, defined benefit pension plan (the Pension Plan) covering substantially all employees who were employed as of July 1, 2005, except certain employees who are covered by union-administered plans. Benefits are based on the number of years of service and each employee's compensation near retirement. G&K froze the Pension Plan effective December 31, 2006. Future growth in benefits will not occur after this date. The Company's funding policy provides for contributions of an amount between the minimum required and maximum amount that can be deducted for federal income tax purposes. The funded status is measured as the difference between the fair value of plan assets and the benefit obligation at May 31, the measurement date. The benefit obligation is the projected benefit obligation (PBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The fair value of plan assets represents the current market value of assets held by an irrevocable trust fund for the sole benefit of participants. These valuations reflect the terms of the Pension Plan and use participant-specific information such as compensation, age and years of service, as well as certain assumptions that require significant judgment, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. |
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 actual 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. For derivative financial instruments that are designated as a hedge, unrealized gains and losses related to the effective portion are either recognized in income immediately to offset the realized gain or loss on the hedged item, or are deferred and reported as a component of other comprehensive income in stockholders' equity and subsequently recognized in net income when the hedged item affects net income. The change in fair value of the ineffective portion of a derivative financial instrument is recognized in net income immediately. |
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. U.S. 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. There were no transfers between levels for the years ended May 31, 2017 or 2016. The carrying value of accounts receivable and accounts payable, and other current assets and liabilities, approximate fair value because of the short-term maturity of those instruments. 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 April 2014, the FASB issued Accounting Standard Update (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. A cross-functional implementation team has been established consisting of representatives from all of our operating segments. The implementation team is working to analyze the impact of the standard on Cintas' contract portfolio by reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. In addition, we are in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard. Cintas plans to adopt the standard as of the first quarter of fiscal year 2019 using the modified retrospective approach and will record a cumulative adjustment to equity for open contracts as of June 1, 2018. Cintas is continuing to evaluate the impact of ASU 2014-09 and an estimate of the impact to the consolidated financial statements cannot be made at this time. 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. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the consolidated condensed balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance is effective for annual and interim periods beginning after December 15, 2015. The guidance is applied retrospectively and early adoption is permitted. Cintas adopted ASU 2015-03 during the quarter ended August 31, 2016 and has applied this amended accounting guidance to its long-term debt and other assets for all periods presented. The impact of this change in accounting principle on balances previously reported as of May 31, 2016 was a reclassification of $5.6 million from other assets to debt due after one year within long-term liabilities. In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments.” This amendment eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a business combination. This amendment became effective for Cintas beginning June 1, 2016, and was adopted prospectively in accordance with the standard. The adoption of this amendment did not have an effect on our consolidated financial statements for the fiscal year ended May 31, 2017. 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. Cintas adopted ASU 2016-09 during the quarter ended August 31, 2016 and elected to make an accounting policy change to recognize forfeitures as they occur. The adoption impact on the consolidated balance sheet was a cumulative-effect adjustment of $26.7 million , increasing opening retained earnings and decreasing paid-in capital. In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs.” ASU 2017-07 continues to require the service component of pension and other postretirement benefit costs to be presented in the same line item as other employee compensation costs on the consolidated statement of income and changes the presentation of other components of net benefit cost so that these items will be presented outside of operating income within the consolidated statements of income. Cintas plans to adopt ASU 2017-07 in fiscal 2018 and apply it prospectively. Cintas does not expect the adoption of ASU 2017-07 to have a material impact 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 Polici31
Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following amounts at May 31: (In thousands) 2017 2016 Raw materials $ 17,528 $ 17,794 Work in process 17,951 14,731 Finished goods 242,739 216,837 $ 278,218 $ 249,362 |
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) 2017 2016 Land $ 173,166 $ 117,881 Buildings and improvements 624,615 509,193 Equipment 1,930,018 1,582,793 Leasehold improvements 32,679 28,412 Construction in progress 79,400 173,367 2,839,878 2,411,646 Less: accumulated depreciation 1,516,377 1,417,954 $ 1,323,501 $ 993,692 |
Current Accrued Liabilities | Current accrued liabilities include the following amounts at May 31: (In thousands) 2017 2016 General insurance liabilities $ 153,743 $ 128,759 Employee benefit related liabilities 110,104 75,587 Taxes and related liabilities 8,057 5,765 Accrued interest 36,638 26,682 Other 121,267 106,473 $ 429,809 $ 343,266 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
May 31, 2017 | |
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, 2017 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 169,266 $ — $ — $ 169,266 Marketable securities: Canadian treasury securities — 22,219 — 22,219 Total assets at fair value $ 169,266 $ 22,219 $ — $ 191,485 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
May 31, 2017 | |
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) 2017 2016 Land $ 173,166 $ 117,881 Buildings and improvements 624,615 509,193 Equipment 1,930,018 1,582,793 Leasehold improvements 32,679 28,412 Construction in progress 79,400 173,367 2,839,878 2,411,646 Less: accumulated depreciation 1,516,377 1,417,954 $ 1,323,501 $ 993,692 |
Goodwill, Service Contracts a34
Goodwill, Service Contracts and Other Assets (Tables) | 12 Months Ended |
May 31, 2017 | |
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 by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2015 $ 940,423 $ 154,954 $ 84,717 $ 1,180,094 Goodwill acquired 10,020 86,874 203 97,097 Foreign currency translation (713 ) (380 ) (22 ) (1,115 ) Balance at May 31, 2016 $ 949,730 $ 241,448 $ 84,898 $ 1,276,076 Goodwill acquired 1,499,008 2,265 6,281 1,507,554 Foreign currency translation (668 ) (601 ) (26 ) (1,295 ) Balance as of May 31, 2017 $ 2,448,070 $ 243,112 $ 91,153 $ 2,782,335 |
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 as of June 1, 2015 $ 5,078 $ 1,576 $ 28,996 $ 35,650 Service contracts acquired 18,912 34,052 2,730 55,694 Service contracts amortization (4,078 ) (3,355 ) (5,696 ) (13,129 ) Foreign currency translation — (21 ) — (21 ) Balance at May 31, 2016 $ 19,912 $ 32,252 $ 26,030 $ 78,194 Service contracts acquired 521,708 1,632 5,895 529,235 Service contracts amortization (11,636 ) (3,952 ) (4,922 ) (20,510 ) Foreign currency translation (61 ) 130 — 69 Balance as of May 31, 2017 $ 529,923 $ 30,062 $ 27,003 $ 586,988 |
Information Regarding Service Contracts and Other Assets | Information regarding Cintas' service contracts and other assets is as follows: As of May 31, 2017 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 911,273 $ 324,285 $ 586,988 Noncompete and consulting agreements $ 40,743 $ 39,244 $ 1,499 Other 34,890 4,422 30,468 Total $ 75,633 $ 43,666 $ 31,967 As of May 31, 2016 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 382,858 $ 304,664 $ 78,194 Noncompete and consulting agreements $ 40,238 $ 38,788 $ 1,450 Other 15,275 2,442 12,833 Total $ 55,513 $ 41,230 $ 14,283 |
Debt and Derivatives (Tables)
Debt and Derivatives (Tables) | 12 Months Ended |
May 31, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | Cintas' debt is summarized as follows at May 31: (In thousands) Interest Rate Fiscal Year Issued Fiscal Year Maturity 2017 2016 Debt due within one year Senior notes 2.85 % 2007 2017 $ — $ 250,000 Senior notes 6.13 % 2008 2018 300,000 — Commercial paper 1.24 % (1) Various Various 50,500 — Current portion of term loan 2.00 % (1) 2017 2018 12,500 — Debt issuance costs (100 ) — Total debt due within one year $ 362,900 $ 250,000 Debt due after one year Senior notes 6.13 % 2008 2018 $ — $ 300,000 Senior notes 4.30 % 2012 2022 250,000 250,000 Senior notes 2.90 % 2017 2022 650,000 — Senior notes 3.25 % 2013 2023 300,000 250,000 Senior notes (2) 2.78 % 2013 2023 52,554 — Senior notes (3) 3.11 % 2015 2025 52,645 — Senior notes 3.70 % 2017 2027 1,000,000 — Senior notes 6.15 % 2007 2037 250,000 250,000 Long-term portion of term loan 2.00 % (1) 2017 2022 237,500 — Debt issuance costs (22,075 ) (5,578 ) Total debt due after one year $ 2,770,624 $ 1,044,422 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2017. (2) Cintas assumed these senior notes with the acquisition of G&K, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73% . (3) Cintas assumed these senior notes with the acquisition of G&K, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88% . |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | Income before income taxes for continuing operations consists of the following components: (In thousands) 2017 2016 2015 U.S. operations $ 673,055 $ 685,167 $ 622,502 Foreign operations 14,349 20,148 18,054 $ 687,404 $ 705,315 $ 640,556 |
Components of Income Taxes | Income tax expense for continuing operations consists of the following components: (In thousands) 2017 2016 2015 Current: Federal $ 194,130 $ 279,134 $ 199,360 State and local 27,197 25,428 24,733 221,327 304,562 224,093 Deferred 8,791 (47,852 ) 13,910 $ 230,118 $ 256,710 $ 238,003 |
Reconciliation of Income Tax Expense Using the Statutory Rate and Actual Income Tax Expense | Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows: (In thousands) 2017 2016 2015 Income taxes at the U.S. federal statutory rate $ 240,677 $ 246,881 $ 224,360 State and local income taxes, net of federal benefit 19,210 16,339 16,308 Other (1) (29,769 ) (6,510 ) (2,665 ) $ 230,118 $ 256,710 $ 238,003 (1) The Other category in fiscal 2017 is primarily associated with $29.4 million excess tax benefit for share based compensation under the adoption of ASU 2016-09. |
Components of Deferred Income Taxes | The components of deferred income taxes included on the consolidated balance sheets are as follows: (In thousands) 2017 2016 Deferred tax assets: Allowance for doubtful accounts $ 7,707 $ 7,416 Inventory obsolescence 16,096 13,702 Insurance and contingencies 54,489 42,717 Stock-based compensation 73,027 45,720 Net operating loss and foreign related carry-forwards (1) 37,814 17,883 Treasury locks — 12,055 Other 25,891 8,100 215,024 147,593 Valuation allowance (18,088 ) (17,047 ) 196,936 130,546 Deferred tax liabilities: In service inventory 210,766 172,704 Property 126,872 93,784 Intangibles 290,049 104,585 Treasury locks 6,435 — State taxes and other 32,142 18,948 666,264 390,021 Net deferred tax liability $ 469,328 $ 259,475 (1) During fiscal 2017, the net operating loss increased primarily due to the G&K acquisition. The net operating loss related to the G&K acquisition is expected to be utilized by fiscal 2018 and w |
Summary of Valuation Allowance | The progression of the valuation allowance is as follows: (In thousands) 2017 2016 Balance at beginning of year $ (17,047 ) $ (14,690 ) Additions (1,667 ) (3,437 ) Subtractions 626 1,080 Balance at end of year $ (18,088 ) $ (17,047 ) |
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, 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 Additions from G&K acquisition (1) 2,084 Additions for tax positions of prior years 2,520 Settlements (2) (1,044 ) Statute expirations (2,734 ) Balance at May 31, 2017 $ 17,357 (1) Increase in unrecognized tax benefit associated with unrecognized benefits assumed in the G&K acquisition. (2) Decrease in unrecognized tax benefit associated with the settlement of a fiscal 2012 Internal Revenue Service audit. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
May 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Aggregate Purchase Price for Businesses Acquired | Assets: Cash and cash equivalents $ 333 Accounts receivable 16,705 Inventory 5,987 Other current assets 1,443 Property, plant and equipment 849 Goodwill 87,442 Service contracts 34,000 Other intangibles 4,500 Liabilities: Accounts payable (7,195 ) Accrued liabilities (4,428 ) Deferred income taxes (5,636 ) Total consideration $ 134,000 The final purchase price allocation was determined by management with the assistance of third-party valuation specialists, and was based on estimates of the fair value of assets acquired and liabilities assumed as of August 1, 2015. The components of the final purchase price allocation, at fair value, are as follows: Assets: Cash and cash equivalents $ 333 Accounts receivable 16,705 Inventory 5,987 Other current assets 1,443 Property, plant and equipment 849 Goodwill 87,442 Service contracts 34,000 Other intangibles 4,500 Liabilities: Accounts payable (7,195 ) Accrued liabilities (4,428 ) Deferred income taxes (5,636 ) Total consideration $ 134,000 The net consideration transferred for G&K consisted of the following items: (In thousands) Cash consideration for common stock $ 1,901,845 (1) Cash consideration for share-based awards 62,257 (2) Cash consideration for G&K revolving debt 124,180 (3) Cash consideration for transaction expenses 24,529 (4) Total consideration 2,112,811 Cash acquired (34,393 ) (5) Net consideration transferred $ 2,078,418 (1) The cash consideration for outstanding shares of G&K common stock is the product of the agreed-upon cash per share price of $97.50 and total G&K outstanding shares of approximately 19.5 million . (2) The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $97.50 and the total number of restricted stock outstanding and the “in the money” stock options net of the weighted average exercise price. (3) The cash consideration for G&K revolving debt reflects the repayment of the outstanding obligation. (4) Represents G&K legal and professional fees that were incurred prior to acquisition and were due upon the closing of the transaction. (5) Represents the G&K cash balance acquired at acquisition. The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired: (In thousands) 2017 2016 Fair value of tangible assets acquired $ 550,491 $ 26,759 Fair value of service contracts acquired 529,235 55,694 Fair value of other intangibles acquired 17,556 4,639 Net goodwill recognized 1,507,554 97,097 Total fair value of assets acquired 2,604,836 184,189 Fair value of liabilities assumed 502,465 27,610 Total cash paid for acquisitions $ 2,102,371 $ 156,579 The components of the preliminary purchase price allocation, at fair value, are as follows: Assets: March 21, 2017 Accounts receivable $ 95,846 Inventories 30,254 Uniforms and other rental items in service 93,659 Income taxes, current 14,626 Prepaid expenses and other current assets 43,235 Property and equipment 254,035 Goodwill 1,493,211 Service contracts 519,000 Trade names 17,000 Other assets 15,585 Liabilities: Accounts payable (53,220 ) Accrued compensation and related liabilities (9,594 ) Accrued liabilities (115,109 ) Long term accrued liabilities (28,380 ) G&K Senior notes (105,359 ) Deferred income taxes (186,371 ) Total consideration $ 2,078,418 |
Schedule of Preliminary Valuation and Amortization Period of Identifiable Intangible Assets | The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets: Identifiable intangible assets: Preliminary Valuation Amortization Period Service contracts $ 519,000 15 years Trade names 17,000 3 years Total $ 536,000 |
Schedule of Pro Forma Financial Information | The following unaudited pro forma information presents the combined financial results for Cintas and G&K as if the G&K acquisition had been completed at the beginning of Cintas’ prior fiscal year, June 1, 2015. Prior to the acquisition, G&K used a 52-week or 53-week fiscal year ending on the Saturday nearest June 30. The pro forma financial information set forth below for the year ended May 31, 2016 includes G&K's annual results for the period of June 28, 2015 through July 2, 2016 adjusted for number of working days in Cintas' fiscal 2016. The pro forma financial information for the year ended May 31, 2017 includes G&K's publicly reported results for the period of July 2, 2016 through December 31, 2016 annualized and adjusted for the number of work days in the stub period of June 1, 2016 through March 21, 2017 and the actual results from March 22, 2017 through May 31, 2017. Actual net sales and net income of the acquired G&K business included in reported fiscal 2017 results were $187.7 million and $5.7 million , respectively. In thousands except per share data 2017 2016 Net sales $ 6,107,109 $ 5,762,741 Net income $ 488,482 $ 520,224 Earnings per common share - diluted $ 4.45 $ 4.66 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
May 31, 2017 | |
Retirement Benefits [Abstract] | |
Obligations and Funded Status | Obligations and Funded Status at May 31, 2017 Change in benefit obligation: Projected benefit obligation, beginning of year $ — Projected benefit obligation acquired in G&K acquisition 84,553 Interest cost 562 Actuarial loss 2,750 Benefits paid (478 ) Projected benefit obligation, end of year $ 87,387 Change in plan assets: Fair value of plan assets, beginning of year $ — Plan assets acquired in G&K acquisition 57,747 Actual return on plan assets 2,127 Benefits paid (478 ) Fair value of plan assets, end of year $ 59,396 Funded status-net amount recognized $ (27,991 ) |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost 2017 (1) Interest cost $ 562 Expected return on assets (590 ) Amortization of net loss — Net periodic benefit cost $ (28 ) (1) Represents the net periodic benefit cost for the period subsequent to the acquisition of G&K on March 21, 2017 through May 31, 2017. |
Weighted Average Assumptions Used to Determine Benefit Obligations | The following weighted average assumptions were used to determine benefit obligations for the Pension Plan at May 31, 2017: Discount rate 3.79 % Rate of compensation increase N/A The following weighted average assumptions were used to determine net periodic benefit cost for the Pension Plan for the fiscal year ended May 31, 2017: Discount rate 4.00 % Expected return on plan assets 5.40 % Rate of compensation increase N/A |
Asset allocations in the pension plan | The target asset allocation and actual asset allocation of the Pension Plan at May 31, 2017 are as follows: Target Asset Allocation Actual Asset Allocation International equity 8.0 % 8.3 % Large cap equity 26.0 % 26.3 % Small cap equity 5.0 % 5.3 % Absolute return strategy funds 16.0 % 16.2 % Fixed income 45.0 % 43.6 % Long/short equity fund — % 0.3 % Total 100 % 100 % |
Pension plan investments using the fair value hierarchy | The following table presents the Pension Plan investments as of May 31, 2017 using the fair value hierarchy discussed in Note 1 entitled Significant Accounting Polices: (Level 1) (Level 2) (Level 3) Total Cash equivalents $ 629 $ — $ — $ 629 U.S. government securities 1,874 3,401 — 5,275 Corporate debt — 20,210 — 20,210 Mutual funds U.S. securities 28,353 — — 28,353 International securities 4,929 — — 4,929 Total $ 35,785 $ 23,611 $ — $ 59,396 |
Benefit Payments Reflecting Expected Future Service | The following Pension Plan benefit payments are expected to be paid: 2018 $ 2,966 2019 3,110 2020 3,317 2021 3,548 2022 3,686 2023 to 2027 20,423 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
May 31, 2017 | |
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) 2017 2016 2015 Basic Earnings per Share from Continuing Operations Income from continuing operations $ 457,286 $ 448,605 $ 402,553 Less: income from continuing operations allocated to participating securities 8,168 7,131 3,771 Income from continuing operations available to common shareholders $ 449,118 $ 441,474 $ 398,782 Basic weighted average common shares outstanding 104,964 108,221 115,900 Basic earnings per share from continuing operations $ 4.27 $ 4.08 $ 3.44 (In thousands except per share data) 2017 2016 2015 Diluted Earnings per Share from Continuing Operations Income from continuing operations $ 457,286 $ 448,605 $ 402,553 Less: income from continuing operations allocated to participating securities 8,168 7,131 3,771 Income from continuing operations available to common shareholders $ 449,118 $ 441,474 $ 398,782 Basic weighted average common shares outstanding 104,964 108,221 115,900 Effect of dilutive securities – employee stock options 2,819 1,735 1,643 Diluted weighted average common shares outstanding 107,783 109,956 117,543 Diluted earnings per share from continuing operations $ 4.17 $ 4.02 $ 3.39 |
Summary of Buyback Activity by Program | The following table summarizes the buyback activity by program and fiscal period: (In thousands except per share data) 2017 2016 2015 Buyback Program Shares Avg. Price per Share Purchase Price 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 39 $ 94.09 $ 3,691 5,649 $ 87.85 $ 496,309 — $ — $ — August 6, 2016 — $ — $ — — $ — $ — — $ — $ — 39 $ 94.09 $ 3,691 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, 2017 | |
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: 2017 2016 2015 Risk-free interest rate 1.2 % 2.0 % 2.0 % Dividend yield 1.3 % 1.4 % 1.6 % Expected volatility of Cintas' common stock 21.6 % 23.3 % 28.0 % Expected life of the option in years 7.5 7.5 7.5 |
Stock Options Granted and Outstanding | The information presented in the following table relates primarily to stock options granted and outstanding under either the 2016 Plan or under previously adopted plans: Shares Weighted Average Exercise Price Outstanding, June 1, 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 Granted 1,500,465 123.20 Canceled (328,105 ) 83.03 Exercised (1,004,217 ) 35.95 Outstanding, May 31, 2017 (1,795,898 shares exercisable) 8,588,050 $ 74.77 |
Summary of Information Related to Stock Options Outstanding | The following table summarizes the information related to stock options outstanding at May 31, 2017 : Outstanding Options Exercisable Options Range of Exercise Prices Number Outstanding Average Remaining Option Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 22.42 – $ 46.91 1,972,643 4.37 $ 35.38 1,488,169 $ 34.04 46.92 – 66.27 2,204,240 6.79 58.09 278,065 51.63 66.28 – 89.78 1,604,071 8.12 85.51 15,324 71.17 89.79 – 126.54 2,807,096 9.54 116.29 14,340 90.68 $ 22.42 – $ 126.54 8,588,050 7.38 $ 74.77 1,795,898 $ 37.53 |
Restricted Stock Awards Granted and Outstanding | The information presented in the following table relates to restricted stock awards granted and outstanding under either the 2016 Plan or under previously adopted plans: Shares Weighted Average Grant Price Outstanding, unvested grants at June 1, 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 Granted 681,461 125.29 Canceled (114,151 ) 89.28 Vested (428,672 ) 48.67 Outstanding, unvested grants at May 31, 2017 2,742,074 $ 95.09 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
May 31, 2017 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Currency Unrealized (Loss) Gain on Cash Flow Hedges Other Total 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 ) Other comprehensive (loss) income before reclassifications (10,252 ) 31,136 (115 ) 20,769 Amounts reclassified from accumulated other comprehensive income (loss) — 1,076 — 1,076 Net current period other comprehensive (loss) income (10,252 ) 32,212 (115 ) 21,845 Balance at May 31, 2017 $ (12,726 ) $ 11,382 $ (1,685 ) $ (3,029 ) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) during the fiscal years ended May 31: Reclassifications out of Accumulated Other Comprehensive Income (Loss) Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line in the Consolidated Statements of Income (in thousands) 2017 2016 Amortization of interest rate locks $ (1,714 ) $ (3,130 ) Interest expense Tax benefit 638 1,178 Income taxes Amortization of interest rate locks, net of tax $ (1,076 ) $ (1,952 ) Net of tax (in thousands) 2017 2016 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 in fiscal 2016. |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
May 31, 2017 | |
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, 2017 Revenue $ 4,202,490 $ 508,233 $ 612,658 $ — $ 5,323,381 Gross margin $ 1,894,716 $ 230,166 $ 255,413 $ — $ 2,380,295 Selling and administrative expenses 1,138,345 177,378 211,657 — 1,527,380 G&K Services, Inc. transaction and integration expenses 79,224 79,224 Interest expense, net — — — 86,287 86,287 Income before income taxes $ 677,147 $ 52,788 $ 43,756 $ (86,287 ) $ 687,404 Depreciation and amortization $ 156,998 $ 19,962 $ 17,905 $ 1,730 $ 196,595 Capital expenditures $ 232,832 $ 26,863 $ 12,645 $ 977 $ 273,317 Total assets $ 5,801,680 $ 444,717 $ 367,562 $ 230,098 $ 6,844,057 May 31, 2016 Revenue $ 3,759,524 $ 461,783 $ 574,465 $ — $ 4,795,772 Gross margin $ 1,666,691 $ 197,010 $ 237,639 $ — $ 2,101,340 Selling and administrative expenses 994,590 147,503 190,306 — 1,332,399 Interest expense, net — — — 63,626 63,626 Income before income taxes $ 672,101 $ 49,507 $ 47,333 $ (63,626 ) $ 705,315 Depreciation and amortization $ 130,421 $ 16,021 $ 16,879 $ 1,958 $ 165,279 Capital expenditures $ 237,871 $ 22,364 $ 14,840 $ 310 $ 275,385 Total assets $ 3,104,822 $ 421,697 $ 322,474 $ 249,822 $ 4,098,815 May 31, 2015 Revenue $ 3,519,199 $ 326,593 $ 523,885 $ — $ 4,369,677 Gross margin $ 1,526,534 $ 152,339 $ 214,050 $ — $ 1,892,923 Selling and administrative expenses 922,582 107,226 179,476 — 1,209,284 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 $ 603,952 $ 45,113 $ 34,574 $ (43,083 ) $ 640,556 Depreciation and amortization $ 123,129 $ 9,774 $ 16,909 $ 2,783 $ 152,595 Capital expenditures $ 184,200 $ 13,589 $ 18,528 $ 1,403 $ 217,720 Total assets $ 2,831,978 $ 254,707 $ 299,885 $ 799,104 $ 4,185,674 (1) Corporate assets include cash and marketable securities in all periods presented. Corporate assets as of May 31, 2017 and 2016 also include the assets of Discontinued Services. Corporate assets as of May 31, 2015 also include assets of Discontinued Services, Shred-it and real estate assets of Storage that were not included in the sale transactions. |
Quarterly Financial Data (Una43
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
May 31, 2017 | |
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, 2017 and 2016 : May 31, 2017 (in thousands) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,266,650 $ 1,271,077 $ 1,255,367 $ 1,530,287 Gross margin $ 576,427 $ 565,218 $ 559,924 $ 678,726 Net income, continuing operations $ 136,208 $ 121,950 $ 116,954 $ 82,174 Basic earnings per share, continuing operations $ 1.27 $ 1.15 $ 1.09 $ 0.76 Diluted earnings per share, continuing operations $ 1.24 $ 1.12 $ 1.06 $ 0.75 Weighted average number of shares outstanding 104,483 104,957 105,093 105,325 May 31, 2016 (in thousands) (1) First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 1,170,564 $ 1,191,121 $ 1,190,539 $ 1,243,548 Gross margin $ 516,895 $ 520,221 $ 517,853 $ 546,371 Net income, continuing operations $ 104,325 $ 113,447 $ 115,122 $ 115,711 Basic earnings per share, continuing operations $ 0.93 $ 1.03 $ 1.05 $ 1.07 Diluted earnings per share, continuing operations $ 0.92 $ 1.01 $ 1.03 $ 1.06 Weighted average number of shares outstanding 110,597 108,301 107,843 106,136 (1) The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
May 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary Information Regarding the Shred-it Partnership's Financial Position | Cintas provides the following unaudited summary information regarding the Shred-it Partnership's results of operations for the twelve months ended April 30, 2015: 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 Discontinued Services, Shredding and Storage businesses: (In thousands) 2017 2016 (1) 2015 (1) Revenue $ 105,559 $ 109,686 $ 138,584 Income before income taxes, excluding gains (losses) from sale transactions and investments 10,622 13,242 9,253 Gain on Storage transactions 2,400 15,786 38,573 Gain (loss) on Shred-it 25,457 354,071 (3,851 ) Income tax expense (15,057 ) (138,184 ) (15,910 ) Net income from discontinued operations $ 23,422 $ 244,915 $ 28,065 (1) Results for the fiscal years ended May 31, 2016 and 2015 related to Discontinued Services were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed. |
Supplemental Guarantor Inform45
Supplemental Guarantor Information (Tables) | 12 Months Ended |
May 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Income Statement | Condensed Consolidating Income Statement Year Ended May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 3,511,483 $ 604,679 $ 257,288 $ (170,960 ) $ 4,202,490 Other — 1,604,877 1,810 73,006 (558,802 ) 1,120,891 Equity in net income of affiliates 457,286 — — — (457,286 ) — 457,286 5,116,360 606,489 330,294 (1,187,048 ) 5,323,381 Costs and expenses (income): Cost of uniform rental and facility services — 2,021,365 378,404 164,969 (256,964 ) 2,307,774 Cost of other — 1,070,780 (41,509 ) 56,210 (450,169 ) 635,312 Selling and administrative expenses — 1,686,209 (220,887 ) 87,672 (25,614 ) 1,527,380 G&K Services, Inc. transaction and integration expenses — 51,868 19,060 8,296 — 79,224 Operating income 457,286 286,138 471,421 13,147 (454,301 ) 773,691 Interest income — (26 ) (191 ) (22 ) 2 (237 ) Interest expense (income) — 89,706 (2,978 ) (204 ) — 86,524 Income before income taxes 457,286 196,458 474,590 13,373 (454,303 ) 687,404 Income taxes — 65,829 159,025 5,365 (101 ) 230,118 Income from continuing operations 457,286 130,629 315,565 8,008 (454,202 ) 457,286 Income from discontinued operations, net of tax 23,422 22,287 — 1,135 (23,422 ) 23,422 Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 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 $ — $ 3,147,844 $ 553,414 $ 213,526 $ (155,260 ) $ 3,759,524 Other — 1,484,556 8,540 66,270 (523,118 ) 1,036,248 Equity in net income of affiliates 448,605 — — — (448,605 ) — 448,605 4,632,400 561,954 279,796 (1,126,983 ) 4,795,772 Costs and expenses (income): Cost of uniform rental and facility services — 1,835,835 350,500 142,601 (236,103 ) 2,092,833 Cost of other — 1,001,576 (40,741 ) 48,539 (407,775 ) 601,599 Selling and administrative expenses — 1,497,106 (206,889 ) 69,257 (27,075 ) 1,332,399 Operating income 448,605 297,883 459,084 19,399 (456,030 ) 768,941 Interest income — — (666 ) (232 ) 2 (896 ) Interest expense (income) — 65,534 (1,027 ) 15 — 64,522 Income before income taxes 448,605 232,349 460,777 19,616 (456,032 ) 705,315 Income taxes — 82,783 164,169 9,874 (116 ) 256,710 Income from continuing operations 448,605 149,566 296,608 9,742 (455,916 ) 448,605 Income (loss) from discontinued operations, net of tax 244,915 250,625 — (5,837 ) (244,788 ) 244,915 Net income $ 693,520 $ 400,191 $ 296,608 $ 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 $ — $ 2,919,526 $ 507,481 $ 229,391 $ (137,199 ) $ 3,519,199 Other — 1,303,204 (8,173 ) 57,349 (501,902 ) 850,478 Equity in net income of affiliates 402,553 — — — (402,553 ) — 402,553 4,222,730 499,308 286,740 (1,041,654 ) 4,369,677 Costs and expenses (income): Cost of uniform rental and facility services — 1,781,651 271,512 154,601 (215,099 ) 1,992,665 Cost of other — 830,459 11,028 37,628 (395,026 ) 484,089 Selling and administrative expenses — 1,343,361 (182,290 ) 74,523 (26,310 ) 1,209,284 Operating income 402,553 267,259 399,058 19,988 (405,219 ) 683,639 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 402,553 200,973 422,181 20,070 (405,221 ) 640,556 Income taxes 74,307 156,097 7,665 (66 ) 238,003 Income from continuing operations 402,553 126,666 266,084 12,405 (405,155 ) 402,553 Income from discontinued operations, net of tax 28,065 23,271 — 4,596 (27,867 ) 28,065 Net income $ 430,618 $ 149,937 $ 266,084 $ 17,001 $ (433,022 ) $ 430,618 |
Condensed Consolidating Statement of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income Year Ended May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (10,252 ) — — (10,252 ) 10,252 (10,252 ) Change in fair value of cash flow hedges 31,136 31,136 — — (31,136 ) 31,136 Amortization of interest rate lock agreements 1,076 1,076 — — (1,076 ) 1,076 Other (115 ) — (115 ) — 115 (115 ) Other comprehensive income (loss) 21,845 32,212 (115 ) (10,252 ) (21,845 ) 21,845 Comprehensive income (loss) $ 502,553 $ 185,128 $ 315,450 $ (1,109 ) $ (499,469 ) $ 502,553 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 $ 400,191 $ 296,608 $ 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 cash flow hedges — (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 $ 395,862 $ 295,878 $ (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 $ 149,937 $ 266,084 $ 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 cash flow hedges — — — 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 $ 151,889 $ 265,723 $ (21,489 ) $ (433,022 ) $ 393,719 |
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet As of May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Assets Current assets: Cash and cash equivalents $ — $ 48,658 $ 17,302 $ 103,306 $ — $ 169,266 Marketable securities — — — 22,219 — 22,219 Accounts receivable, net — 543,769 137,881 54,358 — 736,008 Inventories, net — 243,677 21,466 14,461 (1,386 ) 278,218 Uniforms and other rental items in service — 531,295 78,012 45,388 (18,993 ) 635,702 Income taxes, current — 16,173 25,138 3,009 — 44,320 Prepaid expenses and other current assets — 13,234 16,188 710 — 30,132 Assets held for sale — 23,095 15,518 — — 38,613 Total current assets — 1,419,901 311,505 243,451 (20,379 ) 1,954,478 Property and equipment, at cost, net — 851,018 364,724 107,759 — 1,323,501 Investments (1) 321,083 3,605,457 929,657 1,711,070 (6,402,479 ) 164,788 Goodwill — — 2,742,898 39,549 (112 ) 2,782,335 Service contracts, net — 505,698 — 81,290 — 586,988 Other assets, net 1,516,463 14,705 3,489,653 11,983 (5,000,837 ) 31,967 $ 1,837,546 $ 6,396,779 $ 7,838,437 $ 2,195,102 $ (11,423,807 ) $ 6,844,057 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,596,731 ) $ 2,292,388 $ (91,467 ) $ 38,108 $ 177,051 Accrued compensation and related liabilities — 94,505 42,866 12,264 — 149,635 Accrued liabilities — 191,819 219,303 18,687 — 429,809 Liabilities held for sale — 11,457 — — — 11,457 Debt due within one year — 362,900 — — — 362,900 Total current liabilities (465,247 ) (936,050 ) 2,554,557 (60,516 ) 38,108 1,130,852 Long-term liabilities: Debt due after one year — 2,770,234 — 390 — 2,770,624 Deferred income taxes — — 436,613 32,715 — 469,328 Accrued liabilities — 28,384 140,923 1,153 — 170,460 Total long-term liabilities — 2,798,618 577,536 34,258 — 3,410,412 Total shareholders' equity 2,302,793 4,534,211 4,706,344 2,221,360 (11,461,915 ) 2,302,793 $ 1,837,546 $ 6,396,779 $ 7,838,437 $ 2,195,102 $ (11,423,807 ) $ 6,844,057 (1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million , respectively, of the $164.8 million consolidated net investments. 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 $ — $ 57,894 $ 55,391 $ 26,072 $ — $ 139,357 Marketable securities — — — 70,405 — 70,405 Accounts receivable, net — 413,645 97,516 35,327 — 546,488 Inventories, net — 222,822 19,150 11,235 (3,845 ) 249,362 Uniforms and other rental items in service — 448,395 73,001 36,612 (19,722 ) 538,286 Income taxes, current — (151 ) 1,215 648 — 1,712 Prepaid expenses and other current assets — 6,708 18,278 962 — 25,948 Assets held for sale — 19,021 — — — 19,021 Total current assets — 1,168,334 264,551 181,261 (23,567 ) 1,590,579 Property and equipment, at cost, net — 614,111 305,636 73,945 — 993,692 Investments (1) 321,083 1,770,303 901,772 941,396 (3,809,602 ) 124,952 Goodwill — — 1,241,145 35,043 (112 ) 1,276,076 Service contracts, net — 75,941 13 2,240 — 78,194 Other assets, net 1,081,203 — 3,338,742 9,110 (4,414,772 ) 14,283 Long-term assets held for sale — 5,521 15,518 — — 21,039 $ 1,402,286 $ 3,634,210 $ 6,067,377 $ 1,242,995 $ (8,248,053 ) $ 4,098,815 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ (465,247 ) $ (1,775,092 ) $ 2,296,493 $ 16,781 $ 38,005 $ 110,940 Accrued compensation and related liabilities — 72,959 23,052 5,380 — 101,391 Accrued liabilities — 78,471 251,217 13,578 — 343,266 Liabilities held for sale — 9,958 — — — 9,958 Debt due within one year — 250,000 — — — 250,000 Total current liabilities (465,247 ) (1,363,704 ) 2,570,762 35,739 38,005 815,555 Long-term liabilities: Debt due after one year — 1,044,032 — 390 — 1,044,422 Deferred income taxes — (427 ) 252,149 7,753 — 259,475 Accrued liabilities — 19,628 116,091 985 — 136,704 Total long-term liabilities — 1,063,233 368,240 9,128 — 1,440,601 Total shareholders' equity 1,867,533 3,934,681 3,128,375 1,198,128 (8,286,058 ) 1,842,659 $ 1,402,286 $ 3,634,210 $ 6,067,377 $ 1,242,995 $ (8,248,053 ) $ 4,098,815 (1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $15.5 million and $109.5 million , respectively, of the $125.0 million consolidated net investments. |
Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2017 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 480,708 $ 152,916 $ 315,565 $ 9,143 $ (477,624 ) $ 480,708 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 117,578 43,660 10,327 — 171,565 Amortization of intangible assets — 21,496 1,178 2,356 — 25,030 Stock-based compensation 88,868 — — — — 88,868 Gain on Storage — (1,460 ) — — — (1,460 ) Gain on Shred-it — (23,516 ) — (1,941 ) — (25,457 ) Asset impairment charge — 20,966 — 2,365 — 23,331 G&K Services, Inc. transaction and integration costs — 26,453 — 4,992 — 31,445 Short-term debt financing fees included in net income — 17,062 — — — 17,062 Settlement of cash flow hedges — 30,194 — — — 30,194 Deferred income taxes — (26,289 ) 26,058 4,133 — 3,902 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (50,012 ) (40,380 ) (3,165 ) — (93,557 ) Inventories, net — 7,787 (2,317 ) (3,679 ) (2,459 ) (668 ) Uniforms and other rental items in service — (4,951 ) (5,011 ) 1,959 (729 ) (8,732 ) Prepaid expenses and other current assets — 21,119 2,775 307 — 24,201 Accounts payable — 1,765,713 (1,509,215 ) (242,875 ) 103 13,726 Accrued compensation and related liabilities — (7,498 ) 19,815 1,337 — 13,654 Accrued liabilities and other — 2,813 (5,675 ) 2,361 — (501 ) Income taxes, current — (5,205 ) (22,445 ) (1,774 ) — (29,424 ) Net cash provided by (used in) operating activities 569,576 2,065,166 (1,175,992 ) (214,154 ) (480,709 ) 763,887 Cash flows from investing activities: Capital expenditures — (153,963 ) (102,682 ) (16,672 ) — (273,317 ) Proceeds from redemption of marketable securities — — — 218,324 — 218,324 Purchase of marketable securities and investments — 18,150 (797,559 ) 598,344 — (181,065 ) Proceeds from sale of Storage — 2,400 — — — 2,400 Proceeds from sale of Shred-it — 23,935 — 1,941 — 25,876 Acquisitions of businesses, net of cash acquired — (2,112,015 ) — 9,644 — (2,102,371 ) Other, net (438,344 ) (1,562,294 ) 2,039,740 (520,007 ) 480,709 (196 ) Net cash (used in) provided by investing activities (438,344 ) (3,783,787 ) 1,139,499 291,574 480,709 (2,310,349 ) Cash flows from financing activities: Proceeds from issuance of commercial paper, net — 50,500 — — — 50,500 Proceeds from issuance of debt, net — 1,932,229 (2,000 ) 2,000 — 1,932,229 Repayment of debt — (250,000 ) — — — (250,000 ) Payment of short-term debt financing fees — (17,062 ) — — — (17,062 ) Proceeds from exercise of stock-based compensation awards 31,870 — — — — 31,870 Dividends paid (142,378 ) — — (55 ) — (142,433 ) Repurchase of common stock (20,724 ) — — — — (20,724 ) Other, net — (6,282 ) 404 — — (5,878 ) Net cash (used in) provided by financing activities (131,232 ) 1,709,385 (1,596 ) 1,945 — 1,578,502 Effect of exchange rate changes on cash and cash equivalents — — — (2,131 ) — (2,131 ) Net (decrease) increase in cash and cash equivalents — (9,236 ) (38,089 ) 77,234 — 29,909 Cash and cash equivalents at beginning of year — 57,894 55,391 26,072 — 139,357 Cash and cash equivalents at end of year $ — $ 48,658 $ 17,302 $ 103,306 $ — $ 169,266 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2016 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 693,520 $ 400,191 $ 296,608 $ 3,905 $ (700,704 ) $ 693,520 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 102,443 37,883 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 ) Gain (loss) on Shred-it — (366,460 ) — 12,389 — (354,071 ) 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 — (30,381 ) (20,196 ) (2,185 ) — (52,762 ) Inventories, net — (23,917 ) 2,011 (2,454 ) 6,443 (17,917 ) Uniforms and other rental items in service — (3,193 ) (2,032 ) (1,840 ) 759 (6,306 ) Prepaid expenses and other current assets — (167 ) (914 ) 116 — (965 ) Accounts payable — (487,582 ) 491,918 (4,884 ) (16 ) (564 ) Accrued compensation and related liabilities — 9,838 3,103 571 — 13,512 Accrued liabilities and other — (3,790 ) 25,625 155 724 22,714 Income taxes, current — 895 (1,118 ) (577 ) — (800 ) Net cash provided by (used in) operating activities 772,813 (483,488 ) 855,217 14,097 (692,794 ) 465,845 Cash flows from investing activities: Capital expenditures — (162,075 ) (100,380 ) (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 — 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, net 94,344 169,821 (945,406 ) 1,897 683,481 4,137 Net cash provided by (used in) investing activities 94,344 473,949 (1,057,871 ) (75,559 ) 693,518 128,381 Cash flows from financing activities: Proceeds from the issuance 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, net — 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 — (16,738 ) (193,325 ) (67,653 ) — (277,716 ) Cash and cash equivalents at beginning of year — 74,632 248,716 93,725 — 417,073 Cash and cash equivalents at end of year $ — $ 57,894 $ 55,391 $ 26,072 $ — $ 139,357 Condensed Consolidating Statement of Cash Flows Year Ended May 31, 2015 (in thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 430,618 $ 149,937 $ 266,084 $ 17,001 $ (433,022 ) $ 430,618 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation — 92,133 38,066 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 in 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 — 2,416 (5,141 ) 1,282 — (1,443 ) Inventories, net — 22,405 (405 ) (487 ) 2,272 23,785 Uniforms and other rental items in service — (24,203 ) (5,154 ) (2,764 ) 127 (31,994 ) Prepaid expenses and other current assets — (317 ) (2,768 ) (117 ) — (3,202 ) Accounts payable — (343,401 ) 310,050 (98 ) 4 (33,445 ) Accrued compensation and related liabilities — 3,345 1,226 (1,337 ) — 3,234 Accrued liabilities and other — (15,160 ) 41,882 6,322 22 33,066 Income taxes, current — 142 (5,939 ) (1,035 ) — (6,832 ) Net cash provided by (used in) operating activities 477,620 (126,587 ) 634,787 25,053 (430,597 ) 580,276 Cash flows from investing activities: Capital expenditures — (117,545 ) (85,713 ) (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, net 235,951 51,438 (773,575 ) 3,705 483,864 1,383 Net cash provided by (used in) investing activities 235,951 126,702 (785,377 ) 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, net — 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 — 889 (150,606 ) 53,502 — (96,215 ) Cash and cash equivalents at beginning of year — 73,743 399,322 40,223 — 513,288 Cash and cash equivalents at end of year $ — $ 74,632 $ 248,716 $ 93,725 $ — $ 417,073 |
Significant Accounting Polici46
Significant Accounting Policies - Narrative (Details) | Mar. 21, 2017USD ($) | May 31, 2017USD ($)segment | May 31, 2016USD ($) | May 31, 2015USD ($) | Aug. 31, 2016USD ($) | Apr. 30, 2014 |
Accounting Policies [Line Items] | ||||||
Restricted cash | $ 30,600,000 | $ 50,600,000 | ||||
Impairment losses | $ 23,331,000 | 0 | $ 0 | |||
Number of reporting units | segment | 6 | |||||
Impairment of intangible assets | $ 0 | 0 | $ 0 | |||
Other Assets | Accounting Standards Update 2015-03 | ||||||
Accounting Policies [Line Items] | ||||||
Debt issuance costs | 5,600,000 | |||||
Long-term Liabilities | Accounting Standards Update 2015-03 | ||||||
Accounting Policies [Line Items] | ||||||
Debt issuance costs | $ (5,600,000) | |||||
Retained Earnings | Accounting Standards Update 2016-09 | ||||||
Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment | $ 26,700,000 | |||||
Paid-In Capital | Accounting Standards Update 2016-09 | ||||||
Accounting Policies [Line Items] | ||||||
Cumulative effect adjustment | $ (26,700,000) | |||||
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 | |||||
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] | ||||||
Number of reporting units | segment | 3 | |||||
Shred-it Partnership | ||||||
Accounting Policies [Line Items] | ||||||
Percentage of newly formed partnership owned by Cintas | 42.00% | |||||
Shred-it | Shred-it Partnership | ||||||
Accounting Policies [Line Items] | ||||||
Partnership, ownership percentage by third party | 58.00% | |||||
G & K Services | ||||||
Accounting Policies [Line Items] | ||||||
Consideration transferred | $ 2,112,811,000 | |||||
Impairment losses | $ 23,300,000 | |||||
G & K Services | Service contracts | ||||||
Accounting Policies [Line Items] | ||||||
Service contracts and other assets useful lives (years) | 15 years |
Significant Accounting Polici47
Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 |
Accounting Policies [Abstract] | ||
Raw materials | $ 17,528 | $ 17,794 |
Work in process | 17,951 | 14,731 |
Finished goods | 242,739 | 216,837 |
Inventories, net | 278,218 | 249,362 |
Inventory obsolescence reserve | $ 38,300 | $ 32,700 |
Significant Accounting Polici48
Significant Accounting Policies - Estimated Useful Lives (Details) | 12 Months Ended |
May 31, 2017 | |
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 Polici49
Significant Accounting Policies - Accrued Liabilities (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 |
Accounting Policies [Abstract] | ||
General insurance liabilities | $ 153,743 | $ 128,759 |
Employee benefit related liabilities | 110,104 | 75,587 |
Taxes and related liabilities | 8,057 | 5,765 |
Accrued interest | 36,638 | 26,682 |
Other | 121,267 | 106,473 |
Accrued liabilities | $ 429,809 | $ 343,266 |
Fair Value Disclosures - Financ
Fair Value Disclosures - Financial Instruments on a Recurring Basis (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 22,219 | $ 70,405 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 169,266 | 139,357 |
Total assets at fair value | 191,485 | 209,762 |
Long term accrued liabilities: | ||
Total liabilities at fair value | 19,628 | |
Fair Value, Measurements, Recurring | Canadian treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 22,219 | 70,405 |
Fair Value, Measurements, Recurring | Interest rate lock agreement | ||
Long term accrued liabilities: | ||
Interest rate lock agreement | 19,628 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 169,266 | 139,357 |
Total assets at fair value | 169,266 | 139,357 |
Long term accrued liabilities: | ||
Total liabilities at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Canadian treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Interest rate lock agreement | ||
Long term accrued liabilities: | ||
Interest rate lock agreement | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 22,219 | 70,405 |
Long term accrued liabilities: | ||
Total liabilities at fair value | 19,628 | |
Fair Value, Measurements, Recurring | Level 2 | Canadian treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 22,219 | 70,405 |
Fair Value, Measurements, Recurring | Level 2 | Interest rate lock agreement | ||
Long term accrued liabilities: | ||
Interest rate lock agreement | 19,628 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Long term accrued liabilities: | ||
Total liabilities at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Canadian treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Interest rate lock agreement | ||
Long term accrued liabilities: | ||
Interest rate lock agreement | $ 0 |
Fair Value Disclosures - Narrat
Fair Value Disclosures - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Fair Value Disclosures [Abstract] | |||
Amortized cost basis, marketable securities | $ 22.2 | $ 70.4 | |
Marketable securities purchased | $ 171.3 | $ 488.8 | $ 179.2 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,839,878 | $ 2,411,646 |
Less: accumulated depreciation | 1,516,377 | 1,417,954 |
Property, plant and equipment, net | 1,323,501 | 993,692 |
Capitalized interest | 2,100 | 1,100 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 173,166 | 117,881 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 624,615 | 509,193 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,930,018 | 1,582,793 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 32,679 | 28,412 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 79,400 | $ 173,367 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) | 12 Months Ended | ||||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Investments [Abstract] | |||||
Investments | $ 164,788,000 | [1] | $ 124,952,000 | [2] | |
Cash surrender value of life insurance policies | 144,000,000 | 108,100,000 | |||
Equity method investments | 15,800,000 | 14,500,000 | |||
Cost method investments | 5,000,000 | 2,400,000 | |||
Dividends received on equity method investment | 0 | 0 | $ 5,247,000 | ||
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 | ||||
Losses due to impairment | $ 0 | $ 0 | $ 0 | ||
[1] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million, respectively, of the $164.8 million consolidated net investments. | ||||
[2] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $15.5 million and $109.5 million, respectively, of the $125.0 million consolidated net investments. |
Goodwill, Service Contracts a54
Goodwill, Service Contracts and Other Assets - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 1,276,076 | $ 1,180,094 |
Goodwill acquired | 1,507,554 | 97,097 |
Foreign currency translation | (1,295) | (1,115) |
Balance at the end of the period | 2,782,335 | 1,276,076 |
Operating Segments | Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 949,730 | 940,423 |
Goodwill acquired | 1,499,008 | 10,020 |
Foreign currency translation | (668) | (713) |
Balance at the end of the period | 2,448,070 | 949,730 |
Operating Segments | First Aid and Safety Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 241,448 | 154,954 |
Goodwill acquired | 2,265 | 86,874 |
Foreign currency translation | (601) | (380) |
Balance at the end of the period | 243,112 | 241,448 |
Operating Segments | All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 84,898 | 84,717 |
Goodwill acquired | 6,281 | 203 |
Foreign currency translation | (26) | (22) |
Balance at the end of the period | $ 91,153 | $ 84,898 |
Goodwill, Service Contracts a55
Goodwill, Service Contracts and Other Assets - Changes in Carrying Amount of Service Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | $ 78,194 | $ 35,650 |
Service contracts acquired | 529,235 | 55,694 |
Service contracts amortization | (20,510) | (13,129) |
Foreign currency translation | 69 | (21) |
Balance at the end of the period | 586,988 | 78,194 |
Operating Segments | Uniform Rental and Facility Services | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 19,912 | 5,078 |
Service contracts acquired | 521,708 | 18,912 |
Service contracts amortization | (11,636) | (4,078) |
Foreign currency translation | (61) | 0 |
Balance at the end of the period | 529,923 | 19,912 |
Operating Segments | First Aid and Safety Services | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 32,252 | 1,576 |
Service contracts acquired | 1,632 | 34,052 |
Service contracts amortization | (3,952) | (3,355) |
Foreign currency translation | 130 | (21) |
Balance at the end of the period | 30,062 | 32,252 |
Operating Segments | All Other | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 26,030 | 28,996 |
Service contracts acquired | 5,895 | 2,730 |
Service contracts amortization | (4,922) | (5,696) |
Foreign currency translation | 0 | 0 |
Balance at the end of the period | $ 27,003 | $ 26,030 |
Goodwill, Service Contracts a56
Goodwill, Service Contracts and Other Assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,782,335 | $ 1,276,076 | $ 1,180,094 |
Continuing Operations | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | 22,800 | 14,200 | $ 12,100 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Estimated amortization expense, year one | 60,000 | ||
Estimated amortization expense, year two | 60,100 | ||
Estimated amortization expense, year three | 59,500 | ||
Estimated amortization expense, year four | 53,700 | ||
Estimated amortization expense, year five | 53,100 | ||
Discontinued Operations, Held-for-sale | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 15,500 | $ 15,500 |
Goodwill, Service Contracts a57
Goodwill, Service Contracts and Other Assets - Information Regarding Segment Realignment (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Goodwill [Line Items] | |||
Goodwill | $ 2,782,335 | $ 1,276,076 | $ 1,180,094 |
Operating Segments | Uniform Rental and Facility Services | |||
Goodwill [Line Items] | |||
Goodwill | 2,448,070 | 949,730 | 940,423 |
Operating Segments | First Aid and Safety Services | |||
Goodwill [Line Items] | |||
Goodwill | 243,112 | 241,448 | 154,954 |
Operating Segments | All Other | |||
Goodwill [Line Items] | |||
Goodwill | $ 91,153 | $ 84,898 | $ 84,717 |
Goodwill, Service Contracts a58
Goodwill, Service Contracts and Other Assets - Information Regarding Service Contracts and Other Assets (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Information regarding service contracts and other assets | |||
Service contracts, net | $ 586,988 | $ 78,194 | $ 35,650 |
Other assets, carrying amount | 75,633 | 55,513 | |
Other assets, accumulated amortization | 43,666 | 41,230 | |
Other assets, net | 31,967 | 14,283 | |
Noncompete and consulting agreements | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 40,743 | 40,238 | |
Other assets, accumulated amortization | 39,244 | 38,788 | |
Other assets, net | 1,499 | 1,450 | |
Other | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 34,890 | 15,275 | |
Other assets, accumulated amortization | 4,422 | 2,442 | |
Other assets, net | 30,468 | 12,833 | |
Service contracts | |||
Information regarding service contracts and other assets | |||
Service contracts, carrying amount | 911,273 | 382,858 | |
Service contracts, accumulated amortization | 324,285 | 304,664 | |
Service contracts, net | $ 586,988 | $ 78,194 |
Debt and Derivatives - Summary
Debt and Derivatives - Summary of Outstanding Debt (Details) - USD ($) | May 31, 2017 | May 31, 2016 |
Debt due within one year | ||
Debt issuance costs | $ (100,000) | $ 0 |
Total debt due within one year | 362,900,000 | 250,000,000 |
Debt due after one year | ||
Debt issuance costs | (22,075,000) | (5,578,000) |
Total debt due after one year | 2,770,624,000 | 1,044,422,000 |
Senior Notes, 2.85%, 2017 Maturity | Senior notes | ||
Debt due within one year | ||
Long-term Debt, current | $ 0 | 250,000,000 |
Debt due after one year | ||
Stated interest rate (as a percent) | 2.85% | |
Senior Notes, 6.13%, 2018 Maturity | Senior notes | ||
Debt due within one year | ||
Long-term Debt, current | $ 300,000,000 | 0 |
Debt due after one year | ||
Long-term Debt, non-current | $ 0 | 300,000,000 |
Stated interest rate (as a percent) | 6.13% | |
Commercial Paper, 1.24% | Commercial paper | ||
Debt due within one year | ||
Long-term Debt, current | $ 50,500,000 | 0 |
Debt due after one year | ||
Interest Rate (as a percent) | 1.24% | |
Term Loan Facility | Line of Credit | ||
Debt due within one year | ||
Long-term Debt, current | $ 12,500,000 | 0 |
Debt due after one year | ||
Long-term Debt, non-current | $ 237,500,000 | 0 |
Interest Rate (as a percent) | 2.00% | |
Senior Notes 4.30%, 2022 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 250,000,000 | 250,000,000 |
Stated interest rate (as a percent) | 4.30% | |
Senior Notes, 2.90%, 2022 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 650,000,000 | 0 |
Stated interest rate (as a percent) | 2.90% | |
Senior Notes, 3.25%, 2023 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 300,000,000 | 250,000,000 |
Stated interest rate (as a percent) | 3.25% | |
Senior Notes, 2.78%, 2023 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 52,554,000 | 0 |
Interest Rate (as a percent) | 2.78% | |
Senior Notes, 2.78%, 2023 Maturity | Senior notes | G & K Services | ||
Debt due after one year | ||
Face value | $ 50,000,000 | |
Stated interest rate (as a percent) | 3.73% | |
Senior Notes, 3.11%, 2025 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 52,645,000 | 0 |
Interest Rate (as a percent) | 3.11% | |
Senior Notes, 3.11%, 2025 Maturity | Senior notes | G & K Services | ||
Debt due after one year | ||
Face value | $ 50,000,000 | |
Stated interest rate (as a percent) | 3.88% | |
Senior Notes, 3.70%, 2027 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 1,000,000,000 | 0 |
Stated interest rate (as a percent) | 3.70% | |
Senior Notes, 6.15%, 2037 Maturity | Senior notes | ||
Debt due after one year | ||
Long-term Debt, non-current | $ 250,000,000 | $ 250,000,000 |
Stated interest rate (as a percent) | 6.15% |
Debt and Derivatives - Narrativ
Debt and Derivatives - Narrative (Details) | Sep. 16, 2016USD ($) | Jun. 01, 2016USD ($) | Jul. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Feb. 28, 2017USD ($) | May 31, 2017USD ($)contract | May 31, 2016USD ($)contract | May 31, 2015USD ($) | Sep. 15, 2016USD ($) | Feb. 29, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||||
Average interest rate | 3.80% | |||||||||
Long-term debt, carrying amount | $ 2,770,624,000 | $ 1,044,422,000 | ||||||||
Proceeds from issuance of commercial paper | 50,500,000 | 0 | $ 0 | |||||||
Letters of credit outstanding, amount | 110,900,000 | 83,400,000 | ||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Maturities of long term debt, next twelve months | 363,000,000 | |||||||||
Maturities of long term debt, year two | 12,500,000 | |||||||||
Maturities of long term debt, year three | 12,500,000 | |||||||||
Maturities of long term debt, year four | 12,500,000 | |||||||||
Maturities of long term debt, year five | 1,100,000,000 | |||||||||
Interest paid | 76,600,000 | 64,500,000 | 65,300,000 | |||||||
Payments of Financing Costs | 17,062,000 | 0 | 0 | |||||||
Commercial paper | $ 50,500,000 | 0 | ||||||||
Borrowings on revolving credit facility | $ 0 | |||||||||
Foreign Currency Forward Contracts | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Number of derivative instruments held | contract | 0 | 0 | ||||||||
Other comprehensive Income | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Amortization of interest rate lock agreements | $ 1,100,000 | $ 2,000,000 | $ 2,000,000 | |||||||
Commercial paper | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Weighted average interest rate (as a percent) | 1.24% | |||||||||
G & K Services | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Payments of Financing Costs | $ 17,100,000 | |||||||||
Senior notes | Treasury Lock | Designated as Hedging Instrument | Cash Flow Hedging | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Notional amount | $ 550,000,000 | |||||||||
Derivative liability fair value | 19,600,000 | |||||||||
Deferred gain on derivatives | 30,200,000 | |||||||||
Term Notes Due Through 2036 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt, carrying amount | 3,156,000,000 | 1,300,000,000 | ||||||||
Long-term debt, fair value | 3,296,800,000 | $ 1,416,600,000 | ||||||||
June 2016 Senior Notes | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 250,000,000 | |||||||||
Debt instrument term | 5 years | |||||||||
Commercial Paper, 1.24% | Commercial paper | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of commercial paper | $ 218,500,000 | |||||||||
Debt Amendment June 2016 | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Commercial paper program availability | $ 450,000,000 | |||||||||
Debt Amendment September 2016 | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Revolving credit facility, maximum borrowing capacity with accordion feature | $ 600,000,000 | |||||||||
Increase in borrowing capacity | 150,000,000 | |||||||||
Line of credit facility, accordion feature, increase limit (up to) | 250,000,000 | |||||||||
Debt Amendment September 2016 | Revolving Credit Facility | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Revolving credit facility, maximum borrowing capacity with accordion feature | $ 250,000,000 | |||||||||
Borrowings on revolving credit facility | $ 0 | |||||||||
Senior Notes, 5-Year Maturity | Senior notes | Treasury Lock | Designated as Hedging Instrument | Cash Flow Hedging | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument term | 5 years | |||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Notional amount | $ 500,000,000 | |||||||||
Senior Notes, 10-Year Maturity | Senior notes | Treasury Lock | Designated as Hedging Instrument | Cash Flow Hedging | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument term | 10 years | |||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Notional amount | $ 1,000,000,000 | |||||||||
Subsequent Event | Term Loan Facility | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 150,000,000 | |||||||||
Subsequent Event | Commercial Paper, 1.24% | Commercial paper | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of commercial paper |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating leases minimum payments due, due in year one | $ 43.8 | ||
Operating leases minimum payments due, due in two years | 35.9 | ||
Operating leases minimum payments due, due in three years | 28.5 | ||
Operating leases minimum payments due, due in four years | 22.3 | ||
Operating leases minimum payments due, due in five years | 17 | ||
Operating leases minimum payments due, due thereafter | 28.5 | ||
Continuing Operations | |||
Operating Leased Assets [Line Items] | |||
Operating lease rent expense | $ 49.6 | $ 40.8 | $ 34.2 |
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, 2017 | May 31, 2016 | May 31, 2015 | |
Income before income taxes for continuing operations consists of the following components: | |||
U.S. operations | $ 673,055 | $ 685,167 | $ 622,502 |
Foreign operations | 14,349 | 20,148 | 18,054 |
Income before income taxes from continuing operations | $ 687,404 | $ 705,315 | $ 640,556 |
Income Taxes - Components of 63
Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income tax expense for continuing operations consists of the following components: | |||
Federal | $ 194,130 | $ 279,134 | $ 199,360 |
State and local | 27,197 | 25,428 | 24,733 |
Current income tax expense | 221,327 | 304,562 | 224,093 |
Deferred | 8,791 | (47,852) | 13,910 |
Income taxes | $ 230,118 | $ 256,710 | $ 238,003 |
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, 2017 | May 31, 2016 | May 31, 2015 | |
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 | $ 240,677 | $ 246,881 | $ 224,360 |
State and local income taxes, net of federal benefit | 19,210 | 16,339 | 16,308 |
Other | (29,769) | (6,510) | (2,665) |
Income taxes | 230,118 | $ 256,710 | $ 238,003 |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements | $ 29,400 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Deferred tax assets: | |||
Allowance for doubtful accounts | $ 7,707 | $ 7,416 | |
Inventory obsolescence | 16,096 | 13,702 | |
Insurance and contingencies | 54,489 | 42,717 | |
Stock-based compensation | 73,027 | 45,720 | |
Net operating loss and foreign related carry-forwards | 37,814 | 17,883 | |
Treasury locks | 0 | 12,055 | |
Other | 25,891 | 8,100 | |
Deferred tax assets, gross | 215,024 | 147,593 | |
Valuation allowance | (18,088) | (17,047) | $ (14,690) |
Deferred tax assets, net | 196,936 | 130,546 | |
Deferred tax liabilities: | |||
In service inventory | 210,766 | 172,704 | |
Property | 126,872 | 93,784 | |
Intangibles | 290,049 | 104,585 | |
Treasury locks | 6,435 | 0 | |
State taxes and other | 32,142 | 18,948 | |
Deferred tax liabilities | 666,264 | 390,021 | |
Net deferred tax liability | $ 469,328 | $ 259,475 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Movement in Valuation Allowance [Roll Forward] | ||
Balance at beginning of period | $ (17,047) | $ (14,690) |
Additions | (1,667) | (3,437) |
Subtractions | 626 | 1,080 |
Balance at end of period | $ (18,088) | $ (17,047) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 269.6 | $ 452.6 | $ 236.7 |
Undistributed earnings of foreign subsidiaries | 214.8 | 117.2 | 147.1 |
Unrecognized tax benefits that would impact effective tax rates if recognized | 12.6 | 12.9 | |
Unrecognized tax benefits, interest and penalties accrued | 0.9 | 1.1 | |
Unrecognized tax benefits period increase (decrease) | 0.8 | 1.4 | |
Unrecognized tax benefits, increase (decrease) in accrued interest | $ 0.2 | $ 0.2 | $ 0.2 |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Balance at beginning of period | $ 16,531 | $ 15,412 | $ 13,062 |
Additions from G&K acquisition | 2,084 | ||
Additions for tax positions of prior years | 2,520 | 3,259 | 4,001 |
Statute expirations | (2,734) | (2,092) | (1,603) |
Settlements | (1,044) | (48) | (48) |
Balance at end of period | $ 17,357 | $ 16,531 | $ 15,412 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) | Mar. 21, 2017USD ($)$ / shares | Aug. 01, 2015USD ($) | May 31, 2017segment_business | May 31, 2016segment_business | May 31, 2015transactionbuyer |
Storage Business | Discontinued Operations, Held-for-sale | |||||
Business Acquisition [Line Items] | |||||
Number of transactions involved in sale of business | transaction | 3 | ||||
Number of buyers involved in sale of business | buyer | 3 | ||||
Series of Business Acquisitions | Uniform Rental and Facility Services | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | segment_business | 3 | 2 | |||
Series of Business Acquisitions | First Aid and Safety Services | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | segment_business | 4 | 2 | |||
Series of Business Acquisitions | All Other | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | segment_business | 11 | 6 | |||
G & K Services | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 2,112,811,000 | ||||
Share price of acquisition (in dollars per share) | $ / shares | $ 97.50 | ||||
Net consideration transferred | $ 2,078,418,000 | ||||
Goodwill deductible for tax purposes | 0 | ||||
Cash consideration | $ 1,901,845,000 | ||||
G & K Services | Service contracts | |||||
Business Acquisition [Line Items] | |||||
Amortization Period (in years) | 15 years | ||||
G & K Services | Level 3 | |||||
Business Acquisition [Line Items] | |||||
Discount rate (as a percent) | 9.50% | ||||
ZEE | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 134,000,000 | ||||
Cash consideration | 120,600,000 | ||||
Liabilities acquired | $ 13,400,000 | ||||
ZEE | Service contracts | |||||
Business Acquisition [Line Items] | |||||
Amortization Period (in years) | 10 years | ||||
ZEE | Level 3 | |||||
Business Acquisition [Line Items] | |||||
Discount rate (as a percent) | 11.00% | ||||
Real Property | G & K Services | |||||
Business Acquisition [Line Items] | |||||
Fair value of property plant and equipment | $ 141,800,000 | ||||
Personal Property | G & K Services | |||||
Business Acquisition [Line Items] | |||||
Fair value of property plant and equipment | $ 112,200,000 |
Acquisitions and Divestitures70
Acquisitions and Divestitures - Aggregate Purchase Price for Businesses Acquired (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Business Acquisition [Line Items] | |||
Net goodwill recognized | $ 2,782,335 | $ 1,276,076 | $ 1,180,094 |
Series of Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Fair value of tangible assets acquired | 550,491 | 26,759 | |
Net goodwill recognized | 1,507,554 | 97,097 | |
Total fair value of assets acquired | 2,604,836 | 184,189 | |
Fair value of liabilities assumed | 502,465 | 27,610 | |
Total cash paid for acquisitions | 2,102,371 | 156,579 | |
Service contracts | Series of Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | 529,235 | 55,694 | |
Other intangibles | Series of Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Fair value of intangible assets acquired | $ 17,556 | $ 4,639 |
Acquisitions and Divestitures71
Acquisitions and Divestitures - Purchase Price Allocation (Details) - G & K Services $ / shares in Units, $ in Thousands, shares in Millions | Mar. 21, 2017USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Cash consideration for common stock | $ 1,901,845 |
Cash consideration for share-based awards | 62,257 |
Cash consideration for G&K revolving debt | 124,180 |
Cash consideration for transaction expenses | 24,529 |
Total consideration | 2,112,811 |
Cash acquired | (34,393) |
Net consideration transferred | $ 2,078,418 |
Share price of acquisition (in dollars per share) | $ / shares | $ 97.50 |
Shares acquired in acquisition (in shares) | shares | 19.5 |
Acquisitions and Divestitures72
Acquisitions and Divestitures - Schedule of Assets Acquired and Liabilities Assumed G&K Transaction (Details) - USD ($) $ in Thousands | May 31, 2017 | Mar. 21, 2017 | May 31, 2016 | May 31, 2015 |
Assets: | ||||
Goodwill | $ 2,782,335 | $ 1,276,076 | $ 1,180,094 | |
G & K Services | ||||
Assets: | ||||
Accounts receivable | $ 95,846 | |||
Inventory | 30,254 | |||
Other current assets | 93,659 | |||
Income taxes, current | 14,626 | |||
Prepaid expenses and other current assets | 43,235 | |||
Property, plant and equipment | 254,035 | |||
Goodwill | 1,493,211 | |||
Other assets | 15,585 | |||
Liabilities: | ||||
Accounts payable | (53,220) | |||
Accrued compensation and related liabilities | (9,594) | |||
Accrued liabilities | (115,109) | |||
Long term accrued liabilities | (28,380) | |||
G&K Senior notes | (105,359) | |||
Deferred income taxes | (186,371) | |||
Total consideration | 2,078,418 | |||
G & K Services | Service contracts | ||||
Assets: | ||||
Intangible assets | 519,000 | |||
G & K Services | Trade names | ||||
Assets: | ||||
Intangible assets | $ 17,000 |
Acquisitions and Divestitures73
Acquisitions and Divestitures - Schedule of Valuation and Amortization Period of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Preliminary Valuation | $ 529,235 | $ 55,694 |
G & K Services | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Preliminary Valuation | 536,000 | |
G & K Services | Service contracts | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Preliminary Valuation | $ 519,000 | |
Amortization Period (in years) | 15 years | |
G & K Services | Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Preliminary Valuation | $ 17,000 | |
Amortization Period (in years) | 3 years |
Acquisitions and Divestitures74
Acquisitions and Divestitures - Pro Forma Financial Information (Details) - G & K Services - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Business Acquisition [Line Items] | ||
Actual sales of acquired entity included in fiscal 2017 results | $ 187,700 | |
Actual net income of acquired entity included in fiscal 2017 results | 5,700 | |
Net sales | 6,107,109 | $ 5,762,741 |
Net income | $ 488,482 | $ 520,224 |
Earnings per common share - Diluted (in dollars per share) | $ 4.45 | $ 4.66 |
Acquisitions and Divestitures75
Acquisitions and Divestitures - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | Aug. 01, 2015 | May 31, 2015 |
Assets: | ||||
Goodwill | $ 2,782,335 | $ 1,276,076 | $ 1,180,094 | |
ZEE | ||||
Assets: | ||||
Cash and cash equivalents | $ 333 | |||
Accounts receivable | 16,705 | |||
Inventory | 5,987 | |||
Other current assets | 1,443 | |||
Property, plant and equipment | 849 | |||
Goodwill | 87,442 | |||
Liabilities: | ||||
Accounts payable | (7,195) | |||
Accrued liabilities | (4,428) | |||
Deferred income taxes | (5,636) | |||
Total consideration | 134,000 | |||
ZEE | Service contracts | ||||
Assets: | ||||
Intangible assets | 34,000 | |||
ZEE | Other intangibles | ||||
Assets: | ||||
Intangible assets | $ 4,500 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Estimated contribution to pension plan | $ 0 | ||
Accrued benefit liability | 28,000,000 | ||
Unrecognized net actuarial loss | 1,200,000 | ||
Fair value of plan assets | 59,396,000 | $ 0 | |
Projected benefit obligation | 87,387,000 | 0 | |
Net periodic benefit cost | $ (28,000) | ||
Expected return on plan assets (as a percent) | 5.40% | ||
Supplemental Executive Retirement Plan (SERP) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 6,900,000 | 6,600,000 | $ 6,100,000 |
Domestic Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Required years of service for plan eligibility (years) | 1 year | ||
Employer contributions | $ 47,500,000 | 43,100,000 | 38,400,000 |
Deferred Profit Sharing Plan (DPSP) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 1,800,000 | 1,600,000 | $ 1,500,000 |
Pension Plan of Immaterial Acquisitions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 7,100,000 | 6,500,000 | |
Projected benefit obligation | 7,500,000 | 7,700,000 | |
Net periodic benefit cost | $ 100,000 | $ 100,000 |
Employee Benefit Plans - Obliga
Employee Benefit Plans - Obligations and Funded Status (Details) $ in Thousands | 12 Months Ended |
May 31, 2017USD ($) | |
Change in benefit obligation: | |
Projected benefit obligation, beginning of year | $ 0 |
Projected benefit obligation acquired in G&K acquisition | 84,553 |
Interest cost | 562 |
Actuarial loss | 2,750 |
Benefits paid | (478) |
Projected benefit obligation, end of year | 87,387 |
Change in plan assets: | |
Fair value of plan assets, beginning of year | 0 |
Plan assets acquired in G&K acquisition | 57,747 |
Actual return on plan assets | 2,127 |
Benefits paid | (478) |
Fair value of plan assets, end of year | 59,396 |
Funded status-net amount recognized | $ (27,991) |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) $ in Thousands | 12 Months Ended |
May 31, 2017USD ($) | |
Retirement Benefits [Abstract] | |
Interest cost | $ 562 |
Expected return on assets | (590) |
Amortization of net loss | 0 |
Net periodic benefit cost | $ (28) |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Assumptions Used to Determine Benefit Obligations (Details) | 12 Months Ended |
May 31, 2017 | |
Retirement Benefits [Abstract] | |
Discount rate (as a percent) | 3.79% |
Discount rate (as a percent) | 4.00% |
Expected return on plan assets (as a percent) | 5.40% |
Employee Benefit Plans - Asset
Employee Benefit Plans - Asset allocations in the pension plan (Details) | May 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 100.00% |
Actual Asset Allocations (as a percent) | 100.00% |
International equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 8.00% |
Actual Asset Allocations (as a percent) | 8.30% |
Large cap equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 26.00% |
Actual Asset Allocations (as a percent) | 26.30% |
Small cap equity | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 5.00% |
Actual Asset Allocations (as a percent) | 5.30% |
Absolute return strategy funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 16.00% |
Actual Asset Allocations (as a percent) | 16.20% |
Fixed income | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 45.00% |
Actual Asset Allocations (as a percent) | 43.60% |
Long/short equity fund | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocations (as a percent) | 0.00% |
Actual Asset Allocations (as a percent) | 0.30% |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension plan investments using the fair value hierarchy (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | $ 59,396 | $ 0 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 35,785 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 23,611 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
Cash equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 629 | |
Cash equivalents | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 629 | |
Cash equivalents | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
Cash equivalents | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
U.S. government securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 5,275 | |
U.S. government securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 1,874 | |
U.S. government securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 3,401 | |
U.S. government securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
Corporate debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 20,210 | |
Corporate debt | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
Corporate debt | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 20,210 | |
Corporate debt | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
U.S. securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 28,353 | |
U.S. securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 28,353 | |
U.S. securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
U.S. securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
International securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 4,929 | |
International securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 4,929 | |
International securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | 0 | |
International securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of plan assets | $ 0 |
Employee Benefit Plans - Benefi
Employee Benefit Plans - Benefit Payments Reflecting Expected Future Service (Details) $ in Thousands | May 31, 2017USD ($) |
Retirement Benefits [Abstract] | |
2,018 | $ 2,966 |
2,019 | 3,110 |
2,020 | 3,317 |
2,021 | 3,548 |
2,022 | 3,686 |
2023-2027 | $ 20,423 |
Earnings per Share - Computatio
Earnings per Share - Computation of Basic Earnings Per Share For Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | [1] | Feb. 29, 2016 | [1] | Nov. 30, 2015 | [1] | Aug. 31, 2015 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Basic Earnings per Share from Continuing Operations | |||||||||||||||
Income from continuing operations | $ 82,174 | $ 116,954 | $ 121,950 | $ 136,208 | $ 115,711 | $ 115,122 | $ 113,447 | $ 104,325 | $ 457,286 | $ 448,605 | $ 402,553 | ||||
Less: income from continuing operations allocated to participating securities | 8,168 | 7,131 | 3,771 | ||||||||||||
Income from continuing operations available to common shareholders | $ 449,118 | $ 441,474 | $ 398,782 | ||||||||||||
Basic weighted average common shares outstanding (shares) | 105,325 | 105,093 | 104,957 | 104,483 | 106,136 | 107,843 | 108,301 | 110,597 | 104,964 | 108,221 | 115,900 | ||||
Basic earnings per share: | |||||||||||||||
Basic earnings per share, continuing operations (dollars per share) | $ 0.76 | $ 1.09 | $ 1.15 | $ 1.27 | $ 1.07 | $ 1.05 | $ 1.03 | $ 0.93 | $ 4.27 | $ 4.08 | $ 3.44 | ||||
[1] | The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Earnings per Share - Computat84
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, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | [1] | Feb. 29, 2016 | [1] | Nov. 30, 2015 | [1] | Aug. 31, 2015 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Diluted Earnings per Share from Continuing Operations | |||||||||||||||
Income from continuing operations | $ 82,174 | $ 116,954 | $ 121,950 | $ 136,208 | $ 115,711 | $ 115,122 | $ 113,447 | $ 104,325 | $ 457,286 | $ 448,605 | $ 402,553 | ||||
Less: income from continuing operations allocated to participating securities | 8,168 | 7,131 | 3,771 | ||||||||||||
Income from continuing operations available to common shareholders | $ 449,118 | $ 441,474 | $ 398,782 | ||||||||||||
Basic weighted average common shares outstanding (shares) | 105,325 | 105,093 | 104,957 | 104,483 | 106,136 | 107,843 | 108,301 | 110,597 | 104,964 | 108,221 | 115,900 | ||||
Effect of dilutive securities - employee stock options (shares) | 2,819 | 1,735 | 1,643 | ||||||||||||
Diluted weighted average common shares outstanding (shares) | 107,783 | 109,956 | 117,543 | ||||||||||||
Diluted earnings per share: | |||||||||||||||
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.75 | $ 1.06 | $ 1.12 | $ 1.24 | $ 1.06 | $ 1.03 | $ 1.01 | $ 0.92 | $ 4.17 | $ 4.02 | $ 3.39 | ||||
[1] | The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||||||
May 31, 2017 | May 31, 2016 | May 31, 2015 | Aug. 06, 2016 | Aug. 04, 2015 | Jan. 13, 2015 | Jul. 30, 2013 | |
Earnings Per Share, Basic and Diluted [Line Items] | |||||||
Basic earnings per share, discontinued operations (dollars per share) | $ 0.22 | $ 2.22 | $ 0.24 | ||||
Diluted earnings per share, discontinued operations (dollars per share) | $ 0.21 | $ 2.19 | $ 0.24 | ||||
Options granted excluded from the computation of diluted earnings per share (shares) | 600 | 500 | 600 | ||||
Total purchase price of shares repurchased | $ 20,724,000 | $ 780,151,000 | $ 551,970,000 | ||||
Employee Payroll Taxes Due on Restricted Stock Awards | |||||||
Earnings Per Share, Basic and Diluted [Line Items] | |||||||
Stock purchased under share buyback | 200 | 200 | |||||
Avg. Price per Share (in dollars per share) | $ 101.37 | $ 86.07 | |||||
Total purchase price of shares repurchased | $ 17,000,000 | $ 20,900,000 | |||||
July 30, 2013 | |||||||
Earnings Per Share, Basic and Diluted [Line Items] | |||||||
Share buyback program, authorized amount | $ 500,000,000 | ||||||
Stock purchased under share buyback | 0 | 0 | 3,981 | ||||
Avg. Price per Share (in dollars per share) | $ 0 | $ 0 | $ 75.49 | ||||
Total purchase price of shares repurchased | $ 0 | $ 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 | 0 | 3,078 | 2,870 | ||||
Avg. Price per Share (in dollars per share) | $ 0 | $ 85.44 | $ 82.60 | ||||
Total purchase price of shares repurchased | $ 0 | $ 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 | ||||||
Stock purchased under share buyback | 39 | 5,649 | 0 | ||||
Avg. Price per Share (in dollars per share) | $ 94.09 | $ 87.85 | $ 0 | ||||
Total purchase price of shares repurchased | $ 3,691,000 | $ 496,309,000 | $ 0 | ||||
August 6, 2016 | |||||||
Earnings Per Share, Basic and Diluted [Line Items] | |||||||
Share buyback program, authorized amount | $ 500,000,000 | ||||||
Stock purchased under share buyback | 0 | 0 | 0 | ||||
Avg. Price per Share (in dollars per share) | $ 0 | $ 0 | $ 0 | ||||
Total purchase price of shares repurchased | $ 0 | $ 0 | $ 0 |
Earnings per Share - Summary of
Earnings per Share - Summary of Buyback Activity by Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||
Purchase Price | $ 20,724 | $ 780,151 | $ 551,970 |
Share Repurchase Programs | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares | 39 | 8,727 | 6,851 |
Avg. Price per Share (in dollars per share) | $ 94.09 | $ 87 | $ 78.47 |
Purchase Price | $ 3,691 | $ 759,237 | $ 537,572 |
July 30, 2013 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares | 0 | 0 | 3,981 |
Avg. Price per Share (in dollars per share) | $ 0 | $ 0 | $ 75.49 |
Purchase Price | $ 0 | $ 0 | $ 300,500 |
January 13, 2015 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares | 0 | 3,078 | 2,870 |
Avg. Price per Share (in dollars per share) | $ 0 | $ 85.44 | $ 82.60 |
Purchase Price | $ 0 | $ 262,928 | $ 237,072 |
August 4, 2015 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares | 39 | 5,649 | 0 |
Avg. Price per Share (in dollars per share) | $ 94.09 | $ 87.85 | $ 0 |
Purchase Price | $ 3,691 | $ 496,309 | $ 0 |
August 6, 2016 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares | 0 | 0 | 0 |
Avg. Price per Share (in dollars per share) | $ 0 | $ 0 | $ 0 |
Purchase Price | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | Aug. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average fair value of stock options granted (dollars per share) | $ 25.59 | $ 22.20 | $ 20.64 | |
Intrinsic value of options exercised | $ 76.5 | $ 48.5 | $ 44.3 | |
Proceeds from stock options exercised | 31.9 | 28.2 | 40.2 | |
Fair value of vested stock options | 12.7 | 11 | 10.9 | |
Aggregate intrinsic value of outstanding options | 419.6 | |||
Aggregate intrinsic value of exercisable options | $ 158.7 | |||
Weighted-average remaining contractual term of stock options exercisable | 4 years 6 months 6 days | |||
Unrecognized compensation cost related to unvested stock options and restricted stock | $ 204.5 | |||
Weighted-average period of time unrecognized compensation cost will be recognized | 1 year 9 months 18 days | |||
Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized under plan (shares) | 12,500,000 | |||
Shares reserved for future issuance (shares) | 12,444,826 | |||
Stock Compensation Plan | Continuing Operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 87.5 | 77.8 | 43.8 | |
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 | $ 32.5 | $ 28.3 | $ 16.3 | |
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, 2017 | May 31, 2016 | May 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 1.20% | 2.00% | 2.00% |
Dividend yield (as a percent) | 1.30% | 1.40% | 1.60% |
Expected volatility of Cintas' common stock (as a percent) | 21.60% | 23.30% | 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, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Shares | ||||
Outstanding, beginning of period (shares) | 8,419,907 | 7,835,570 | 8,025,794 | |
Granted (shares) | 1,500,465 | 1,739,767 | 1,590,185 | |
Canceled (shares) | (328,105) | (235,455) | (486,720) | |
Exercised (shares) | (1,004,217) | (919,975) | (1,293,689) | |
Outstanding, end of period (shares) | 8,588,050 | 8,419,907 | 7,835,570 | |
Weighted Average Exercise Price | ||||
Outstanding, beginning of period, Weighted Average Exercise Price (dollars per share) | $ 61.83 | $ 51.59 | $ 43.12 | |
Granted, Weighted Average Exercise Price (dollars per share) | 123.20 | 93.55 | 84.59 | |
Canceled, Weighted Average Exercise Price (dollars per share) | 83.03 | 60.01 | 55.50 | |
Exercised, Weighted Average Exercise Price (dollars per share) | 35.95 | 35.07 | 38.11 | |
Outstanding, end of period, Weighted Average Exercise Price (dollars per share) | $ 74.77 | $ 61.83 | $ 51.59 | |
Number of exercisable options (shares) | 1,795,898 | 1,649,236 | 1,426,550 | 1,583,413 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Information Related to Stock Options Outstanding (Details) | 12 Months Ended |
May 31, 2017$ / sharesshares | |
$ 22.42 – $ 126.54 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 8,588,050 |
Outstanding Options, Average Remaining Option Life | 7 years 4 months 18 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 74.77 |
Exercisable Options, Number Exercisable (shares) | shares | 1,795,898 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 37.53 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 22.42 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 126.54 |
$ 22.42 – $ 46.91 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 1,972,643 |
Outstanding Options, Average Remaining Option Life | 4 years 4 months 12 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 35.38 |
Exercisable Options, Number Exercisable (shares) | shares | 1,488,169 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 34.04 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 22.42 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 46.91 |
46.92 – 66.27 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 2,204,240 |
Outstanding Options, Average Remaining Option Life | 6 years 8 months 45 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 58.09 |
Exercisable Options, Number Exercisable (shares) | shares | 278,065 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 51.63 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 46.92 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 66.27 |
66.28 – 89.78 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 1,604,071 |
Outstanding Options, Average Remaining Option Life | 8 years 1 month 15 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 85.51 |
Exercisable Options, Number Exercisable (shares) | shares | 15,324 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 71.17 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 66.28 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 89.78 |
89.79 – 126.54 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number Outstanding (shares) | shares | 2,807,096 |
Outstanding Options, Average Remaining Option Life | 9 years 6 months 15 days |
Outstanding Options, Weighted Average Exercise Price (dollars per share) | $ 116.29 |
Exercisable Options, Number Exercisable (shares) | shares | 14,340 |
Exercisable Options, Weighted Average Exercise Price (dollars per share) | $ 90.68 |
Range of Exercise Prices, Lower Range Limit (dollars per share) | 89.79 |
Range of Exercise Prices, Upper Range Limit (dollars per share) | $ 126.54 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards Granted and Outstanding (Details) - Restricted Stock Awards - $ / shares | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Shares | |||
Outstanding, beginning of period (shares) | 2,603,436 | 2,210,113 | 2,158,778 |
Granted (shares) | 681,461 | 1,069,748 | 627,033 |
Canceled (shares) | (114,151) | (70,998) | (50,277) |
Vested (shares) | (428,672) | (605,427) | (525,421) |
Outstanding, end of period (shares) | 2,742,074 | 2,603,436 | 2,210,113 |
Weighted Average Grant Price | |||
Outstanding, Weighted Average Grant Price, beginning of period (dollars per share) | $ 75.94 | $ 57.60 | $ 45.04 |
Granted, Weighted Average Grant Price (dollars per share) | 125.29 | 92.10 | 80.73 |
Canceled, Weighted Average Grant Price (dollars per share) | 89.28 | 65.79 | 49.33 |
Vested, Weighted Average Grant Price (dollars per share) | 48.67 | 38.76 | 34.39 |
Outstanding, Weighted Average Grant Price, end of period (dollars per share) | $ 95.09 | $ 75.94 | $ 57.60 |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive Income (Loss) - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 1,842,659 | $ 1,932,455 | $ 2,192,858 |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 21,845 | (16,403) | (36,899) |
Ending Balance | 2,302,793 | 1,842,659 | 1,932,455 |
Foreign Currency | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (2,474) | 2,987 | |
Other comprehensive (loss) income before reclassifications | (10,252) | (11,933) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 6,472 | |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | (10,252) | (5,461) | |
Ending Balance | (12,726) | (2,474) | 2,987 |
Unrealized (Loss) Gain on Cash Flow Hedges | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (20,830) | (10,626) | |
Other comprehensive (loss) income before reclassifications | 31,136 | (12,156) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,076 | 1,952 | |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 32,212 | (10,204) | |
Ending Balance | 11,382 | (20,830) | (10,626) |
Other | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (1,570) | (832) | |
Other comprehensive (loss) income before reclassifications | (115) | (738) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | (115) | (738) | |
Ending Balance | (1,685) | (1,570) | (832) |
Other Accumulated Comprehensive Income (Loss) | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning Balance | (24,874) | (8,471) | 28,428 |
Other comprehensive (loss) income before reclassifications | 20,769 | (24,827) | |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,076 | 8,424 | |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 21,845 | (16,403) | |
Ending Balance | $ (3,029) | $ (24,874) | $ (8,471) |
Accumulated Other Comprehensi93
Accumulated Other Comprehensive Income (Loss) - Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Equity [Abstract] | ||
Amortization of interest rate locks | $ (1,714) | $ (3,130) |
Tax benefit | 638 | 1,178 |
Amortization of interest rate locks, net of tax | (1,076) | (1,952) |
Cumulative translation adjustment on Shred-it | 0 | (10,381) |
Tax benefit | 0 | 3,909 |
Cumulative translation adjustment on Shred-it, net of tax | $ 0 | $ (6,472) |
Operating Segment Information94
Operating Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | Feb. 29, 2016 | [1] | Nov. 30, 2015 | [1] | Aug. 31, 2015 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Disclosures related to operating segments | ||||||||||||||||
Revenue | $ 1,530,287 | $ 1,255,367 | $ 1,271,077 | $ 1,266,650 | $ 1,243,548 | [1] | $ 1,190,539 | $ 1,191,121 | $ 1,170,564 | $ 5,323,381 | $ 4,795,772 | $ 4,369,677 | ||||
Gross margin | 678,726 | $ 559,924 | $ 565,218 | $ 576,427 | 546,371 | [1] | $ 517,853 | $ 520,221 | $ 516,895 | 2,380,295 | 2,101,340 | 1,892,923 | ||||
Selling and administrative expenses | 1,527,380 | 1,332,399 | 1,209,284 | |||||||||||||
G&K Services, Inc. transaction and integration expenses | 79,224 | |||||||||||||||
Gain on sale of stock of an equity method investment | 0 | 0 | 21,739 | |||||||||||||
Interest expense, net | 86,287 | 63,626 | 64,822 | |||||||||||||
Income before income taxes | 687,404 | 705,315 | 640,556 | |||||||||||||
Depreciation and amortization | 196,595 | 165,279 | 152,595 | |||||||||||||
Capital expenditures | 273,317 | 275,385 | 217,720 | |||||||||||||
Total assets | 6,844,057 | 4,098,815 | 6,844,057 | 4,098,815 | 4,185,674 | |||||||||||
Operating Segments | Uniform Rental and Facility Services | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 4,202,490 | 3,759,524 | 3,519,199 | |||||||||||||
Gross margin | 1,894,716 | 1,666,691 | 1,526,534 | |||||||||||||
Selling and administrative expenses | 1,138,345 | 994,590 | 922,582 | |||||||||||||
G&K Services, Inc. transaction and integration expenses | 79,224 | |||||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 677,147 | 672,101 | 603,952 | |||||||||||||
Depreciation and amortization | 156,998 | 130,421 | 123,129 | |||||||||||||
Capital expenditures | 232,832 | 237,871 | 184,200 | |||||||||||||
Total assets | 5,801,680 | 3,104,822 | 5,801,680 | 3,104,822 | 2,831,978 | |||||||||||
Operating Segments | First Aid and Safety Services | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 508,233 | 461,783 | 326,593 | |||||||||||||
Gross margin | 230,166 | 197,010 | 152,339 | |||||||||||||
Selling and administrative expenses | 177,378 | 147,503 | 107,226 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 52,788 | 49,507 | 45,113 | |||||||||||||
Depreciation and amortization | 19,962 | 16,021 | 9,774 | |||||||||||||
Capital expenditures | 26,863 | 22,364 | 13,589 | |||||||||||||
Total assets | 444,717 | 421,697 | 444,717 | 421,697 | 254,707 | |||||||||||
Operating Segments | All Other | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | 612,658 | 574,465 | 523,885 | |||||||||||||
Gross margin | 255,413 | 237,639 | 214,050 | |||||||||||||
Selling and administrative expenses | 211,657 | 190,306 | 179,476 | |||||||||||||
Gain on sale of stock of an equity method investment | 0 | |||||||||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||||||
Income before income taxes | 43,756 | 47,333 | 34,574 | |||||||||||||
Depreciation and amortization | 17,905 | 16,879 | 16,909 | |||||||||||||
Capital expenditures | 12,645 | 14,840 | 18,528 | |||||||||||||
Total assets | 367,562 | 322,474 | 367,562 | 322,474 | 299,885 | |||||||||||
Corporate | ||||||||||||||||
Disclosures related to operating segments | ||||||||||||||||
Revenue | [2] | 0 | 0 | 0 | ||||||||||||
Gross margin | [2] | 0 | 0 | 0 | ||||||||||||
Selling and administrative expenses | [2] | 0 | 0 | 0 | ||||||||||||
Gain on sale of stock of an equity method investment | 21,739 | |||||||||||||||
Interest expense, net | [2] | 86,287 | 63,626 | 64,822 | ||||||||||||
Income before income taxes | [2] | (86,287) | (63,626) | (43,083) | ||||||||||||
Depreciation and amortization | [2] | 1,730 | 1,958 | 2,783 | ||||||||||||
Capital expenditures | [2] | 977 | 310 | 1,403 | ||||||||||||
Total assets | [2] | $ 230,098 | $ 249,822 | $ 230,098 | $ 249,822 | $ 799,104 | ||||||||||
[1] | The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. | |||||||||||||||
[2] | Corporate assets include cash and marketable securities in all periods presented. Corporate assets as of May 31, 2017 and 2016 also include the assets of Discontinued Services. Corporate assets as of May 31, 2015 also include assets of Discontinued Services, Shred-it and real estate assets of Storage that were not included in the sale transactions. Corporate depreciation and amortization includes depreciation and amortization of Discontinued Services. |
Quarterly Financial Data (Una95
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | [1] | Feb. 29, 2016 | [1] | Nov. 30, 2015 | [1] | Aug. 31, 2015 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||||||
Revenue | $ 1,530,287 | $ 1,255,367 | $ 1,271,077 | $ 1,266,650 | $ 1,243,548 | $ 1,190,539 | $ 1,191,121 | $ 1,170,564 | $ 5,323,381 | $ 4,795,772 | $ 4,369,677 | ||||
Gross margin | 678,726 | 559,924 | 565,218 | 576,427 | 546,371 | 517,853 | 520,221 | 516,895 | 2,380,295 | 2,101,340 | 1,892,923 | ||||
Net income, continuing operations | $ 82,174 | $ 116,954 | $ 121,950 | $ 136,208 | $ 115,711 | $ 115,122 | $ 113,447 | $ 104,325 | $ 457,286 | $ 448,605 | $ 402,553 | ||||
Basic earnings per share, continuing operations (dollars per share) | $ 0.76 | $ 1.09 | $ 1.15 | $ 1.27 | $ 1.07 | $ 1.05 | $ 1.03 | $ 0.93 | $ 4.27 | $ 4.08 | $ 3.44 | ||||
Diluted earnings per share from continuing operations (in dollars per share) | $ 0.75 | $ 1.06 | $ 1.12 | $ 1.24 | $ 1.06 | $ 1.03 | $ 1.01 | $ 0.92 | $ 4.17 | $ 4.02 | $ 3.39 | ||||
Weighted average number of shares outstanding (shares) | 105,325 | 105,093 | 104,957 | 104,483 | 106,136 | 107,843 | 108,301 | 110,597 | 104,964 | 108,221 | 115,900 | ||||
[1] | The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
May 31, 2015USD ($) | May 31, 2016USD ($) | May 31, 2017USD ($) | May 31, 2016USD ($) | May 31, 2015USD ($)transactionbuyer | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Equity method investments | $ 14,500 | $ 15,800 | $ 14,500 | ||
Dividends received on equity method investment | 0 | 0 | $ 5,247 | ||
Gain (loss) on Shred-it | 25,457 | 354,071 | (3,851) | ||
Proceeds from Shredding transactions, net of cash contributed | 25,876 | 580,837 | 3,344 | ||
Income tax expense | 1,460 | 15,786 | 38,573 | ||
Proceeds from Storage transactions, net of cash contributed | 2,400 | 35,338 | 158,428 | ||
Discontinued Operations | Storage Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on Shred-it | 25,457 | 354,071 | (3,851) | ||
Income tax expense | 2,400 | 15,786 | 38,573 | ||
Proceeds from Storage transactions, net of cash contributed | $ 158,400 | ||||
Realized gain as a result of contingent consideration received | 10,900 | ||||
Discontinued Operations, Held-for-sale | Storage Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income tax expense | 4,800 | ||||
Proceeds from Storage transactions, net of cash contributed | 24,400 | ||||
Number of transactions involved in sale of business | transaction | 3 | ||||
Number of buyers involved in sale of business | buyer | 3 | ||||
Shred-it Partnership | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Equity method investments | $ 210,100 | $ 210,100 | |||
Dividends received on equity method investment | 113,400 | 0 | 0 | 113,400 | |
Equity method investment, difference between carrying amount and underlying net assets | $ 94,000 | $ 94,000 | |||
Amortization period | 9 years | ||||
Equity method investment net gain (loss) | 24,300 | $ 5,500 | |||
Amortization of basis difference | 4,800 | 11,000 | |||
Gain (loss) on Shred-it | 4,100 | ||||
Litigation settlement expense | $ 1,000 | ||||
Proceeds from Shredding transactions, net of cash contributed | $ 578,300 | ||||
Income tax expense | $ 4,300 | $ 25,500 |
Discontinued Operations - Summa
Discontinued Operations - Summary Information Regarding the Shred-it Partnership's Financial Position (Details) $ in Thousands | 12 Months Ended |
Apr. 30, 2015USD ($) | |
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, 2017 | May 31, 2016 | May 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income tax expense | $ 1,460 | $ 15,786 | $ 38,573 |
Gain (loss) on Shred-it | 25,457 | 354,071 | (3,851) |
Net income from discontinued operations | 23,422 | 244,915 | 28,065 |
Discontinued Operations | Storage Business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 105,559 | 109,686 | 138,584 |
Income before income taxes, excluding gains (losses) from sale transactions and investments | 10,622 | 13,242 | 9,253 |
Income tax expense | 2,400 | 15,786 | 38,573 |
Gain (loss) on Shred-it | 25,457 | 354,071 | (3,851) |
Income tax expense | (15,057) | (138,184) | (15,910) |
Net income from discontinued operations | $ 23,422 | $ 244,915 | $ 28,065 |
G & K Services, Inc. Transact99
G & K Services, Inc. Transaction and Integration Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||
G&K Services, Inc. transaction and integration expenses | $ 79,224 | $ 0 | $ 0 |
Asset impairment charge | 23,331 | $ 0 | $ 0 |
G & K Services | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
G&K Services, Inc. transaction and integration expenses | 79,200 | ||
Business acquisition and integration expenses | 55,900 | ||
Asset impairment charge | 23,300 | ||
Legal and professional fees | 17,400 | ||
Employee termination benefits | 31,000 | ||
Inventory write-down | 5,500 | ||
Other expenses | 2,000 | ||
Employee termination benefits | 6,700 | ||
Related severance liability | $ 24,300 |
Supplemental Guarantor Infor100
Supplemental Guarantor Information - Narrative (Details) $ in Millions | May 31, 2017USD ($) |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Long-term senior notes | $ 3,156 |
Supplemental Guarantor Infor101
Supplemental Guarantor Information - Condensed Consolidating Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2016 | [1] | Feb. 29, 2016 | [1] | Nov. 30, 2015 | [1] | Aug. 31, 2015 | [1] | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Revenue: | |||||||||||||||
Uniform rental and facility services | $ 4,202,490 | $ 3,759,524 | $ 3,519,199 | ||||||||||||
Other | 1,120,891 | 1,036,248 | 850,478 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | $ 1,530,287 | $ 1,255,367 | $ 1,271,077 | $ 1,266,650 | $ 1,243,548 | $ 1,190,539 | $ 1,191,121 | $ 1,170,564 | 5,323,381 | 4,795,772 | 4,369,677 | ||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 2,307,774 | 2,092,833 | 1,992,665 | ||||||||||||
Cost of other | 635,312 | 601,599 | 484,089 | ||||||||||||
Selling and administrative expenses | 1,527,380 | 1,332,399 | 1,209,284 | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 79,224 | 0 | 0 | ||||||||||||
Operating income | 773,691 | 768,941 | 683,639 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | 0 | 21,739 | ||||||||||||
Interest income | (237) | (896) | (339) | ||||||||||||
Interest expense (income) | 86,524 | 64,522 | 65,161 | ||||||||||||
Income before income taxes | 687,404 | 705,315 | 640,556 | ||||||||||||
Income taxes | 230,118 | 256,710 | 238,003 | ||||||||||||
Income from continuing operations | $ 82,174 | $ 116,954 | $ 121,950 | $ 136,208 | $ 115,711 | $ 115,122 | $ 113,447 | $ 104,325 | 457,286 | 448,605 | 402,553 | ||||
Income (loss) from discontinued operations, net of tax | 23,422 | 244,915 | 28,065 | ||||||||||||
Net income | 480,708 | 693,520 | 430,618 | ||||||||||||
Eliminations | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | (170,960) | (155,260) | (137,199) | ||||||||||||
Other | (558,802) | (523,118) | (501,902) | ||||||||||||
Equity in net income of affiliates | (457,286) | (448,605) | (402,553) | ||||||||||||
Total revenue | (1,187,048) | (1,126,983) | (1,041,654) | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | (256,964) | (236,103) | (215,099) | ||||||||||||
Cost of other | (450,169) | (407,775) | (395,026) | ||||||||||||
Selling and administrative expenses | (25,614) | (27,075) | (26,310) | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 0 | ||||||||||||||
Operating income | (454,301) | (456,030) | (405,219) | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | 2 | 2 | 2 | ||||||||||||
Interest expense (income) | 0 | 0 | 0 | ||||||||||||
Income before income taxes | (454,303) | (456,032) | (405,221) | ||||||||||||
Income taxes | (101) | (116) | (66) | ||||||||||||
Income from continuing operations | (454,202) | (455,916) | (405,155) | ||||||||||||
Income (loss) from discontinued operations, net of tax | (23,422) | (244,788) | (27,867) | ||||||||||||
Net income | (477,624) | (700,704) | (433,022) | ||||||||||||
Cintas Corporation | Reportable Legal Entities | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 0 | 0 | 0 | ||||||||||||
Other | 0 | 0 | 0 | ||||||||||||
Equity in net income of affiliates | 457,286 | 448,605 | 402,553 | ||||||||||||
Total revenue | 457,286 | 448,605 | 402,553 | ||||||||||||
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 | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 0 | ||||||||||||||
Operating income | 457,286 | 448,605 | 402,553 | ||||||||||||
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 | 457,286 | 448,605 | 402,553 | ||||||||||||
Income taxes | 0 | 0 | |||||||||||||
Income from continuing operations | 457,286 | 448,605 | 402,553 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 23,422 | 244,915 | 28,065 | ||||||||||||
Net income | 480,708 | 693,520 | 430,618 | ||||||||||||
Corp. 2 | Reportable Legal Entities | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 3,511,483 | 3,147,844 | 2,919,526 | ||||||||||||
Other | 1,604,877 | 1,484,556 | 1,303,204 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 5,116,360 | 4,632,400 | 4,222,730 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 2,021,365 | 1,835,835 | 1,781,651 | ||||||||||||
Cost of other | 1,070,780 | 1,001,576 | 830,459 | ||||||||||||
Selling and administrative expenses | 1,686,209 | 1,497,106 | 1,343,361 | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 51,868 | ||||||||||||||
Operating income | 286,138 | 297,883 | 267,259 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | (26) | 0 | (12) | ||||||||||||
Interest expense (income) | 89,706 | 65,534 | 66,298 | ||||||||||||
Income before income taxes | 196,458 | 232,349 | 200,973 | ||||||||||||
Income taxes | 65,829 | 82,783 | 74,307 | ||||||||||||
Income from continuing operations | 130,629 | 149,566 | 126,666 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 22,287 | 250,625 | 23,271 | ||||||||||||
Net income | 152,916 | 400,191 | 149,937 | ||||||||||||
Subsidiary Guarantors | Reportable Legal Entities | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 604,679 | 553,414 | 507,481 | ||||||||||||
Other | 1,810 | 8,540 | (8,173) | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 606,489 | 561,954 | 499,308 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 378,404 | 350,500 | 271,512 | ||||||||||||
Cost of other | (41,509) | (40,741) | 11,028 | ||||||||||||
Selling and administrative expenses | (220,887) | (206,889) | (182,290) | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 19,060 | ||||||||||||||
Operating income | 471,421 | 459,084 | 399,058 | ||||||||||||
Gain on sale of stock of an equity method investment | 21,739 | ||||||||||||||
Interest income | (191) | (666) | (250) | ||||||||||||
Interest expense (income) | (2,978) | (1,027) | (1,134) | ||||||||||||
Income before income taxes | 474,590 | 460,777 | 422,181 | ||||||||||||
Income taxes | 159,025 | 164,169 | 156,097 | ||||||||||||
Income from continuing operations | 315,565 | 296,608 | 266,084 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | ||||||||||||
Net income | 315,565 | 296,608 | 266,084 | ||||||||||||
Non- Guarantors | Reportable Legal Entities | |||||||||||||||
Revenue: | |||||||||||||||
Uniform rental and facility services | 257,288 | 213,526 | 229,391 | ||||||||||||
Other | 73,006 | 66,270 | 57,349 | ||||||||||||
Equity in net income of affiliates | 0 | 0 | 0 | ||||||||||||
Total revenue | 330,294 | 279,796 | 286,740 | ||||||||||||
Costs and expenses (income): | |||||||||||||||
Cost of uniform rental and facility services | 164,969 | 142,601 | 154,601 | ||||||||||||
Cost of other | 56,210 | 48,539 | 37,628 | ||||||||||||
Selling and administrative expenses | 87,672 | 69,257 | 74,523 | ||||||||||||
G&K Services, Inc. transaction and integration expenses | 8,296 | ||||||||||||||
Operating income | 13,147 | 19,399 | 19,988 | ||||||||||||
Gain on sale of stock of an equity method investment | 0 | ||||||||||||||
Interest income | (22) | (232) | (79) | ||||||||||||
Interest expense (income) | (204) | 15 | (3) | ||||||||||||
Income before income taxes | 13,373 | 19,616 | 20,070 | ||||||||||||
Income taxes | 5,365 | 9,874 | 7,665 | ||||||||||||
Income from continuing operations | 8,008 | 9,742 | 12,405 | ||||||||||||
Income (loss) from discontinued operations, net of tax | 1,135 | (5,837) | 4,596 | ||||||||||||
Net income | $ 9,143 | $ 3,905 | $ 17,001 | ||||||||||||
[1] | The figures for fiscal 2016 reflect the change in classification of Discontinued Services as discontinued operations within the Consolidated Statements of Income. See Note 16 entitled Discontinued Operations for additional information. |
Supplemental Guarantor Infor102
Supplemental Guarantor Information - Condensed Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Condensed Consolidating Financial Statements | |||
Net income | $ 480,708 | $ 693,520 | $ 430,618 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (10,252) | (11,933) | (38,538) |
Cumulative translation adjustment on Shred-it | 0 | 6,472 | 0 |
Change in fair value of cash flow hedges | 31,136 | (12,156) | 37 |
Amortization of interest rate lock agreements | 1,076 | 1,952 | 1,952 |
Other | (115) | (738) | (350) |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 21,845 | (16,403) | (36,899) |
Comprehensive income (loss) | 502,553 | 677,117 | 393,719 |
Eliminations | |||
Condensed Consolidating Financial Statements | |||
Net income | (477,624) | (700,704) | (433,022) |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | 10,252 | 0 | 0 |
Cumulative translation adjustment on Shred-it | 0 | ||
Change in fair value of cash flow hedges | (31,136) | 0 | 0 |
Amortization of interest rate lock agreements | (1,076) | 0 | 0 |
Other | 115 | 0 | 0 |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | (21,845) | 0 | 0 |
Comprehensive income (loss) | (499,469) | (700,704) | (433,022) |
Cintas Corporation | Reportable Legal Entities | |||
Condensed Consolidating Financial Statements | |||
Net income | 480,708 | 693,520 | 430,618 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (10,252) | 0 | 0 |
Cumulative translation adjustment on Shred-it | 0 | ||
Change in fair value of cash flow hedges | 31,136 | 0 | 0 |
Amortization of interest rate lock agreements | 1,076 | 0 | 0 |
Other | (115) | 0 | 0 |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 21,845 | 0 | 0 |
Comprehensive income (loss) | 502,553 | 693,520 | 430,618 |
Corp. 2 | Reportable Legal Entities | |||
Condensed Consolidating Financial Statements | |||
Net income | 152,916 | 400,191 | 149,937 |
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 cash flow hedges | 31,136 | (12,156) | 0 |
Amortization of interest rate lock agreements | 1,076 | 1,952 | 1,952 |
Other | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | 32,212 | (4,329) | 1,952 |
Comprehensive income (loss) | 185,128 | 395,862 | 151,889 |
Subsidiary Guarantors | Reportable Legal Entities | |||
Condensed Consolidating Financial Statements | |||
Net income | 315,565 | 296,608 | 266,084 |
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 cash flow hedges | 0 | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | (115) | (730) | (361) |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | (115) | (730) | (361) |
Comprehensive income (loss) | 315,450 | 295,878 | 265,723 |
Non- Guarantors | Reportable Legal Entities | |||
Condensed Consolidating Financial Statements | |||
Net income | 9,143 | 3,905 | 17,001 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (10,252) | (11,933) | (38,538) |
Cumulative translation adjustment on Shred-it | 597 | ||
Change in fair value of cash flow hedges | 0 | 0 | 37 |
Amortization of interest rate lock agreements | 0 | 0 | 0 |
Other | 0 | (8) | 11 |
Other comprehensive income (loss), net of tax expense (benefit) of $19,118, ($9,813), and $1,043, respectively | (10,252) | (11,344) | (38,490) |
Comprehensive income (loss) | $ (1,109) | $ (7,439) | $ (21,489) |
Supplemental Guarantor Infor103
Supplemental Guarantor Information - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | ||
Current assets: | ||||||
Cash and cash equivalents | $ 169,266 | $ 139,357 | $ 417,073 | $ 513,288 | ||
Marketable securities | 22,219 | 70,405 | ||||
Accounts receivable, net | 736,008 | 546,488 | ||||
Inventories, net | 278,218 | 249,362 | ||||
Uniforms and other rental items in service | 635,702 | 538,286 | ||||
Income taxes, current | 44,320 | 1,712 | ||||
Prepaid expenses and other current assets | 30,132 | 25,948 | ||||
Assets held for sale | 38,613 | 19,021 | ||||
Total current assets | 1,954,478 | 1,590,579 | ||||
Property and equipment, at cost, net | 1,323,501 | 993,692 | ||||
Goodwill | 2,782,335 | 1,276,076 | 1,180,094 | |||
Service contracts, net | 586,988 | 78,194 | ||||
Other assets, net | 31,967 | 14,283 | ||||
Long-term assets held for sale | 0 | 21,039 | ||||
Total assets | 6,844,057 | 4,098,815 | 4,185,674 | |||
Current liabilities: | ||||||
Accounts payable | 177,051 | 110,940 | ||||
Accrued compensation and related liabilities | 149,635 | 101,391 | ||||
Accrued liabilities | 429,809 | 343,266 | ||||
Liabilities held for sale | 11,457 | 9,958 | ||||
Debt due within one year | 362,900 | 250,000 | ||||
Total current liabilities | 1,130,852 | 815,555 | ||||
Long-term liabilities: | ||||||
Debt due after one year | 2,770,624 | 1,044,422 | ||||
Deferred income taxes | 469,328 | 259,475 | ||||
Accrued liabilities | 170,460 | 136,704 | ||||
Total long-term liabilities | 3,410,412 | 1,440,601 | ||||
Total shareholders' equity | 2,302,793 | 1,842,659 | 1,932,455 | 2,192,858 | ||
Total liabilities and shareholders' equity | 6,844,057 | 4,098,815 | ||||
Investments | 164,788 | [1] | 124,952 | [2] | ||
Eliminations | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | ||
Marketable securities | 0 | 0 | ||||
Accounts receivable, net | 0 | 0 | ||||
Inventories, net | (1,386) | (3,845) | ||||
Uniforms and other rental items in service | (18,993) | (19,722) | ||||
Income taxes, current | 0 | 0 | ||||
Prepaid expenses and other current assets | 0 | 0 | ||||
Assets held for sale | 0 | 0 | ||||
Total current assets | (20,379) | (23,567) | ||||
Property and equipment, at cost, net | 0 | 0 | ||||
Goodwill | (112) | (112) | ||||
Service contracts, net | 0 | 0 | ||||
Other assets, net | (5,000,837) | (4,414,772) | ||||
Long-term assets held for sale | 0 | |||||
Total assets | (11,423,807) | (8,248,053) | ||||
Current liabilities: | ||||||
Accounts payable | 38,108 | 38,005 | ||||
Accrued compensation and related liabilities | 0 | 0 | ||||
Accrued liabilities | 0 | 0 | ||||
Liabilities held for sale | 0 | 0 | ||||
Debt due within one year | 0 | 0 | ||||
Total current liabilities | 38,108 | 38,005 | ||||
Long-term liabilities: | ||||||
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 | (11,461,915) | (8,286,058) | ||||
Total liabilities and shareholders' equity | (11,423,807) | (8,248,053) | ||||
Investments | (6,402,479) | [1] | (3,809,602) | [2] | ||
Cintas Corporation | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | 0 | 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 | ||||
Prepaid expenses and other current assets | 0 | 0 | ||||
Assets held for sale | 0 | 0 | ||||
Total current assets | 0 | 0 | ||||
Property and equipment, at cost, net | 0 | 0 | ||||
Goodwill | 0 | 0 | ||||
Service contracts, net | 0 | 0 | ||||
Other assets, net | 1,516,463 | 1,081,203 | ||||
Long-term assets held for sale | 0 | |||||
Total assets | 1,837,546 | 1,402,286 | ||||
Current liabilities: | ||||||
Accounts payable | (465,247) | (465,247) | ||||
Accrued compensation and related liabilities | 0 | 0 | ||||
Accrued liabilities | 0 | 0 | ||||
Liabilities held for sale | 0 | 0 | ||||
Debt due within one year | 0 | 0 | ||||
Total current liabilities | (465,247) | (465,247) | ||||
Long-term liabilities: | ||||||
Debt due after one year | 0 | 0 | ||||
Deferred income taxes | 0 | 0 | ||||
Accrued liabilities | 0 | 0 | ||||
Total long-term liabilities | 0 | 0 | ||||
Total shareholders' equity | 2,302,793 | 1,867,533 | ||||
Total liabilities and shareholders' equity | 1,837,546 | 1,402,286 | ||||
Investments | 321,083 | [1] | 321,083 | [2] | ||
Corp. 2 | ||||||
Long-term liabilities: | ||||||
Investments | 29,000 | 15,500 | ||||
Corp. 2 | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 48,658 | 57,894 | 74,632 | 73,743 | ||
Marketable securities | 0 | 0 | ||||
Accounts receivable, net | 543,769 | 413,645 | ||||
Inventories, net | 243,677 | 222,822 | ||||
Uniforms and other rental items in service | 531,295 | 448,395 | ||||
Income taxes, current | 16,173 | (151) | ||||
Prepaid expenses and other current assets | 13,234 | 6,708 | ||||
Assets held for sale | 23,095 | 19,021 | ||||
Total current assets | 1,419,901 | 1,168,334 | ||||
Property and equipment, at cost, net | 851,018 | 614,111 | ||||
Goodwill | 0 | 0 | ||||
Service contracts, net | 505,698 | 75,941 | ||||
Other assets, net | 14,705 | 0 | ||||
Long-term assets held for sale | 5,521 | |||||
Total assets | 6,396,779 | 3,634,210 | ||||
Current liabilities: | ||||||
Accounts payable | (1,596,731) | (1,775,092) | ||||
Accrued compensation and related liabilities | 94,505 | 72,959 | ||||
Accrued liabilities | 191,819 | 78,471 | ||||
Liabilities held for sale | 11,457 | 9,958 | ||||
Debt due within one year | 362,900 | 250,000 | ||||
Total current liabilities | (936,050) | (1,363,704) | ||||
Long-term liabilities: | ||||||
Debt due after one year | 2,770,234 | 1,044,032 | ||||
Deferred income taxes | 0 | (427) | ||||
Accrued liabilities | 28,384 | 19,628 | ||||
Total long-term liabilities | 2,798,618 | 1,063,233 | ||||
Total shareholders' equity | 4,534,211 | 3,934,681 | ||||
Total liabilities and shareholders' equity | 6,396,779 | 3,634,210 | ||||
Investments | 3,605,457 | [1] | 1,770,303 | [2] | ||
Subsidiary Guarantors | ||||||
Long-term liabilities: | ||||||
Investments | 135,800 | 109,500 | ||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 17,302 | 55,391 | 248,716 | 399,322 | ||
Marketable securities | 0 | 0 | ||||
Accounts receivable, net | 137,881 | 97,516 | ||||
Inventories, net | 21,466 | 19,150 | ||||
Uniforms and other rental items in service | 78,012 | 73,001 | ||||
Income taxes, current | 25,138 | 1,215 | ||||
Prepaid expenses and other current assets | 16,188 | 18,278 | ||||
Assets held for sale | 15,518 | 0 | ||||
Total current assets | 311,505 | 264,551 | ||||
Property and equipment, at cost, net | 364,724 | 305,636 | ||||
Goodwill | 2,742,898 | 1,241,145 | ||||
Service contracts, net | 0 | 13 | ||||
Other assets, net | 3,489,653 | 3,338,742 | ||||
Long-term assets held for sale | 15,518 | |||||
Total assets | 7,838,437 | 6,067,377 | ||||
Current liabilities: | ||||||
Accounts payable | 2,292,388 | 2,296,493 | ||||
Accrued compensation and related liabilities | 42,866 | 23,052 | ||||
Accrued liabilities | 219,303 | 251,217 | ||||
Liabilities held for sale | 0 | 0 | ||||
Debt due within one year | 0 | 0 | ||||
Total current liabilities | 2,554,557 | 2,570,762 | ||||
Long-term liabilities: | ||||||
Debt due after one year | 0 | 0 | ||||
Deferred income taxes | 436,613 | 252,149 | ||||
Accrued liabilities | 140,923 | 116,091 | ||||
Total long-term liabilities | 577,536 | 368,240 | ||||
Total shareholders' equity | 4,706,344 | 3,128,375 | ||||
Total liabilities and shareholders' equity | 7,838,437 | 6,067,377 | ||||
Investments | 929,657 | [1] | 901,772 | [2] | ||
Non- Guarantors | Reportable Legal Entities | ||||||
Current assets: | ||||||
Cash and cash equivalents | 103,306 | 26,072 | $ 93,725 | $ 40,223 | ||
Marketable securities | 22,219 | 70,405 | ||||
Accounts receivable, net | 54,358 | 35,327 | ||||
Inventories, net | 14,461 | 11,235 | ||||
Uniforms and other rental items in service | 45,388 | 36,612 | ||||
Income taxes, current | 3,009 | 648 | ||||
Prepaid expenses and other current assets | 710 | 962 | ||||
Assets held for sale | 0 | 0 | ||||
Total current assets | 243,451 | 181,261 | ||||
Property and equipment, at cost, net | 107,759 | 73,945 | ||||
Goodwill | 39,549 | 35,043 | ||||
Service contracts, net | 81,290 | 2,240 | ||||
Other assets, net | 11,983 | 9,110 | ||||
Long-term assets held for sale | 0 | |||||
Total assets | 2,195,102 | 1,242,995 | ||||
Current liabilities: | ||||||
Accounts payable | (91,467) | 16,781 | ||||
Accrued compensation and related liabilities | 12,264 | 5,380 | ||||
Accrued liabilities | 18,687 | 13,578 | ||||
Liabilities held for sale | 0 | 0 | ||||
Debt due within one year | 0 | 0 | ||||
Total current liabilities | (60,516) | 35,739 | ||||
Long-term liabilities: | ||||||
Debt due after one year | 390 | 390 | ||||
Deferred income taxes | 32,715 | 7,753 | ||||
Accrued liabilities | 1,153 | 985 | ||||
Total long-term liabilities | 34,258 | 9,128 | ||||
Total shareholders' equity | 2,221,360 | 1,198,128 | ||||
Total liabilities and shareholders' equity | 2,195,102 | 1,242,995 | ||||
Investments | $ 1,711,070 | [1] | $ 941,396 | [2] | ||
[1] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million, respectively, of the $164.8 million consolidated net investments. | |||||
[2] | Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $15.5 million and $109.5 million, respectively, of the $125.0 million consolidated net investments. |
Supplemental Guarantor Infor104
Supplemental Guarantor Information - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
May 31, 2015 | May 31, 2016 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Cash flows from operating activities: | |||||
Net income | $ 480,708 | $ 693,520 | $ 430,618 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation | 171,565 | 149,691 | 140,624 | ||
Amortization of intangible assets | 25,030 | 15,588 | 14,458 | ||
Stock-based compensation | 88,868 | 79,293 | 47,002 | ||
Gain on Storage transactions | (1,460) | (15,786) | (38,573) | ||
Gain on Shred-it | (25,457) | (354,071) | 3,851 | ||
Asset impairment charge | 23,331 | 0 | 0 | ||
G&K Services, Inc. transaction costs | 31,445 | 0 | 0 | ||
Gain on sale of stock of an equity method investment | 0 | 0 | (21,739) | ||
Short-term debt financing fees included in net income | 17,062 | 0 | 0 | ||
Settlement of cash flow hedges | 30,194 | 0 | 0 | ||
Deferred income taxes | 3,902 | (59,302) | 20,866 | ||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||
Accounts receivable, net | (93,557) | (52,762) | (1,443) | ||
Inventories, net | (668) | (17,917) | 23,785 | ||
Uniforms and other rental items in service | (8,732) | (6,306) | (31,994) | ||
Prepaid expenses and other current assets | 24,201 | (965) | (3,202) | ||
Accounts payable | 13,726 | (564) | (33,445) | ||
Accrued compensation and related liabilities | 13,654 | 13,512 | 3,234 | ||
Accrued liabilities and other | (501) | 22,714 | 33,066 | ||
Income taxes, current | (29,424) | (800) | (6,832) | ||
Net cash provided by (used in) operating activities | 763,887 | 465,845 | 580,276 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (273,317) | (275,385) | (217,720) | ||
Proceeds from redemption of marketable securities | 218,324 | 434,179 | 161,938 | ||
Purchase of marketable securities and investments | (181,065) | (494,146) | (195,471) | ||
Proceeds from Storage transactions, net of cash contributed | 2,400 | 35,338 | 158,428 | ||
Proceeds from sale of Shred-it | 25,876 | 580,837 | 3,344 | ||
Proceeds from sale of stock of an equity method investment | 0 | 0 | 29,933 | ||
Dividends received on equity method investment | 0 | 0 | 5,247 | ||
Acquisitions of businesses, net of cash acquired | (2,102,371) | (156,579) | (15,495) | ||
Other | (196) | 4,137 | 1,383 | ||
Net cash (used in) provided by investing activities | (2,310,349) | 128,381 | 44,987 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 50,500 | 0 | 0 | ||
Proceeds from issuance of debt, net | 1,932,229 | 0 | 0 | ||
Repayment of debt | (250,000) | (16) | (518) | ||
Payment of short-term debt financing fees | (17,062) | 0 | 0 | ||
Proceeds from exercise of stock-based compensation awards | 31,870 | 28,226 | 40,230 | ||
Dividends paid | (142,433) | (115,273) | (201,891) | ||
Repurchase of common stock | (20,724) | (780,151) | (551,970) | ||
Other | (5,878) | 490 | 1,589 | ||
Net cash provided by (used in) financing activities | 1,578,502 | (866,724) | (712,560) | ||
Effect of exchange rate changes on cash and cash equivalents | (2,131) | (5,218) | (8,918) | ||
Net increase (decrease) in cash and cash equivalents | 29,909 | (277,716) | (96,215) | ||
Cash and cash equivalents at beginning of year | 139,357 | 417,073 | 513,288 | ||
Cash and cash equivalents at end of year | $ 417,073 | $ 139,357 | 169,266 | 139,357 | 417,073 |
Shred-it Partnership | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Gain on Storage transactions | (4,300) | (25,500) | |||
Gain on Shred-it | (4,100) | ||||
Cash flows from investing activities: | |||||
Proceeds from sale of Shred-it | 578,300 | ||||
Dividends received on equity method investment | 113,400 | 0 | 0 | 113,400 | |
Eliminations | |||||
Cash flows from operating activities: | |||||
Net income | (477,624) | (700,704) | (433,022) | ||
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 | 0 | ||
Gain on Shred-it | 0 | 0 | 0 | ||
Asset impairment charge | 0 | ||||
G&K Services, Inc. transaction costs | 0 | ||||
Gain on sale of stock of an equity method investment | 0 | ||||
Short-term debt financing fees included in net income | 0 | ||||
Settlement of cash flow hedges | 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 | (2,459) | 6,443 | 2,272 | ||
Uniforms and other rental items in service | (729) | 759 | 127 | ||
Prepaid expenses and other current assets | 0 | 0 | 0 | ||
Accounts payable | 103 | (16) | 4 | ||
Accrued compensation and related liabilities | 0 | 0 | 0 | ||
Accrued liabilities and other | 0 | 724 | 22 | ||
Income taxes, current | 0 | 0 | 0 | ||
Net cash provided by (used in) operating activities | (480,709) | (692,794) | (430,597) | ||
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 | 10,037 | (53,245) | ||
Proceeds from Storage transactions, net of cash contributed | 0 | 0 | 0 | ||
Proceeds from sale of Shred-it | 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 | 480,709 | 683,481 | 483,864 | ||
Net cash (used in) provided by investing activities | 480,709 | 693,518 | 430,619 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 0 | ||||
Proceeds from issuance of debt, net | 0 | 0 | 0 | ||
Repayment of debt | 0 | (724) | (22) | ||
Payment of short-term debt financing fees | 0 | ||||
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 provided by (used in) financing activities | 0 | (724) | (22) | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | ||
Net increase (decrease) 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 | 0 |
Eliminations | Shred-it Partnership | |||||
Cash flows from investing activities: | |||||
Dividends received on equity method investment | 0 | ||||
Cintas Corporation | Reportable Legal Entities | |||||
Cash flows from operating activities: | |||||
Net income | 480,708 | 693,520 | 430,618 | ||
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 | 88,868 | 79,293 | 47,002 | ||
Gain on Storage transactions | 0 | 0 | 0 | ||
Gain on Shred-it | 0 | 0 | 0 | ||
Asset impairment charge | 0 | ||||
G&K Services, Inc. transaction costs | 0 | ||||
Gain on sale of stock of an equity method investment | 0 | ||||
Short-term debt financing fees included in net income | 0 | ||||
Settlement of cash flow hedges | 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 (used in) operating activities | 569,576 | 772,813 | 477,620 | ||
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 | 0 | ||
Proceeds from sale of Shred-it | 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 | (438,344) | 94,344 | 235,951 | ||
Net cash (used in) provided by investing activities | (438,344) | 94,344 | 235,951 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 0 | ||||
Proceeds from issuance of debt, net | 0 | 0 | 0 | ||
Repayment of debt | 0 | 0 | 0 | ||
Payment of short-term debt financing fees | 0 | ||||
Proceeds from exercise of stock-based compensation awards | 31,870 | 28,226 | 40,230 | ||
Dividends paid | (142,378) | (115,232) | (201,831) | ||
Repurchase of common stock | (20,724) | (780,151) | (551,970) | ||
Other | 0 | 0 | 0 | ||
Net cash provided by (used in) financing activities | (131,232) | (867,157) | (713,571) | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | ||
Net increase (decrease) 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 | 0 |
Cintas Corporation | Reportable Legal Entities | Shred-it Partnership | |||||
Cash flows from investing activities: | |||||
Dividends received on equity method investment | 0 | ||||
Corp. 2 | Reportable Legal Entities | |||||
Cash flows from operating activities: | |||||
Net income | 152,916 | 400,191 | 149,937 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation | 117,578 | 102,443 | 92,133 | ||
Amortization of intangible assets | 21,496 | 14,830 | 13,972 | ||
Stock-based compensation | 0 | 0 | 0 | ||
Gain on Storage transactions | (1,460) | (12,547) | (31,113) | ||
Gain on Shred-it | (23,516) | (366,460) | 3,190 | ||
Asset impairment charge | 20,966 | ||||
G&K Services, Inc. transaction costs | 26,453 | ||||
Gain on sale of stock of an equity method investment | 0 | ||||
Short-term debt financing fees included in net income | 17,062 | ||||
Settlement of cash flow hedges | 30,194 | ||||
Deferred income taxes | (26,289) | (83,648) | 67 | ||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||
Accounts receivable, net | (50,012) | (30,381) | 2,416 | ||
Inventories, net | 7,787 | (23,917) | 22,405 | ||
Uniforms and other rental items in service | (4,951) | (3,193) | (24,203) | ||
Prepaid expenses and other current assets | 21,119 | (167) | (317) | ||
Accounts payable | 1,765,713 | (487,582) | (343,401) | ||
Accrued compensation and related liabilities | (7,498) | 9,838 | 3,345 | ||
Accrued liabilities and other | 2,813 | (3,790) | (15,160) | ||
Income taxes, current | (5,205) | 895 | 142 | ||
Net cash provided by (used in) operating activities | 2,065,166 | (483,488) | (126,587) | ||
Cash flows from investing activities: | |||||
Capital expenditures | (153,963) | (162,075) | (117,545) | ||
Proceeds from redemption of marketable securities | 0 | 0 | 0 | ||
Purchase of marketable securities and investments | 18,150 | (3,333) | (1,827) | ||
Proceeds from Storage transactions, net of cash contributed | 2,400 | 32,099 | 93,387 | ||
Proceeds from sale of Shred-it | 23,935 | 568,223 | 3,344 | ||
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 | (2,112,015) | (130,786) | (15,495) | ||
Other | (1,562,294) | 169,821 | 51,438 | ||
Net cash (used in) provided by investing activities | (3,783,787) | 473,949 | 126,702 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 50,500 | ||||
Proceeds from issuance of debt, net | 1,932,229 | 0 | 0 | ||
Repayment of debt | (250,000) | (9,151) | (1,178) | ||
Payment of short-term debt financing fees | (17,062) | ||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | ||
Dividends paid | 0 | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | 0 | ||
Other | (6,282) | 1,952 | 1,952 | ||
Net cash provided by (used in) financing activities | 1,709,385 | (7,199) | 774 | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | (9,236) | (16,738) | 889 | ||
Cash and cash equivalents at beginning of year | 57,894 | 74,632 | 73,743 | ||
Cash and cash equivalents at end of year | 74,632 | 57,894 | 48,658 | 57,894 | 74,632 |
Corp. 2 | Reportable Legal Entities | Shred-it Partnership | |||||
Cash flows from investing activities: | |||||
Dividends received on equity method investment | 113,400 | ||||
Subsidiary Guarantors | Reportable Legal Entities | |||||
Cash flows from operating activities: | |||||
Net income | 315,565 | 296,608 | 266,084 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation | 43,660 | 37,883 | 38,066 | ||
Amortization of intangible assets | 1,178 | 304 | 60 | ||
Stock-based compensation | 0 | 0 | 0 | ||
Gain on Storage transactions | 0 | 0 | 0 | ||
Gain on Shred-it | 0 | 0 | 0 | ||
Asset impairment charge | 0 | ||||
G&K Services, Inc. transaction costs | 0 | ||||
Gain on sale of stock of an equity method investment | (21,739) | ||||
Short-term debt financing fees included in net income | 0 | ||||
Settlement of cash flow hedges | 0 | ||||
Deferred income taxes | 26,058 | 22,025 | 18,565 | ||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||
Accounts receivable, net | (40,380) | (20,196) | (5,141) | ||
Inventories, net | (2,317) | 2,011 | (405) | ||
Uniforms and other rental items in service | (5,011) | (2,032) | (5,154) | ||
Prepaid expenses and other current assets | 2,775 | (914) | (2,768) | ||
Accounts payable | (1,509,215) | 491,918 | 310,050 | ||
Accrued compensation and related liabilities | 19,815 | 3,103 | 1,226 | ||
Accrued liabilities and other | (5,675) | 25,625 | 41,882 | ||
Income taxes, current | (22,445) | (1,118) | (5,939) | ||
Net cash provided by (used in) operating activities | (1,175,992) | 855,217 | 634,787 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (102,682) | (100,380) | (85,713) | ||
Proceeds from redemption of marketable securities | 0 | 0 | 0 | ||
Purchase of marketable securities and investments | (797,559) | (12,085) | 38,731 | ||
Proceeds from Storage transactions, net of cash contributed | 0 | 0 | 0 | ||
Proceeds from sale of Shred-it | 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 | 2,039,740 | (945,406) | (773,575) | ||
Net cash (used in) provided by investing activities | 1,139,499 | (1,057,871) | (785,377) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 0 | ||||
Proceeds from issuance of debt, net | (2,000) | (165) | (2,615) | ||
Repayment of debt | 0 | 10,224 | 2,962 | ||
Payment of short-term debt financing fees | 0 | ||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | ||
Dividends paid | 0 | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | 0 | ||
Other | 404 | (730) | (363) | ||
Net cash provided by (used in) financing activities | (1,596) | 9,329 | (16) | ||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 | ||
Net increase (decrease) in cash and cash equivalents | (38,089) | (193,325) | (150,606) | ||
Cash and cash equivalents at beginning of year | 55,391 | 248,716 | 399,322 | ||
Cash and cash equivalents at end of year | 248,716 | 55,391 | 17,302 | 55,391 | 248,716 |
Subsidiary Guarantors | Reportable Legal Entities | Shred-it Partnership | |||||
Cash flows from investing activities: | |||||
Dividends received on equity method investment | 0 | ||||
Non- Guarantors | Reportable Legal Entities | |||||
Cash flows from operating activities: | |||||
Net income | 9,143 | 3,905 | 17,001 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation | 10,327 | 9,365 | 10,425 | ||
Amortization of intangible assets | 2,356 | 454 | 426 | ||
Stock-based compensation | 0 | 0 | 0 | ||
Gain on Storage transactions | 0 | (3,239) | (7,460) | ||
Gain on Shred-it | (1,941) | 12,389 | 661 | ||
Asset impairment charge | 2,365 | ||||
G&K Services, Inc. transaction costs | 4,992 | ||||
Gain on sale of stock of an equity method investment | 0 | ||||
Short-term debt financing fees included in net income | 0 | ||||
Settlement of cash flow hedges | 0 | ||||
Deferred income taxes | 4,133 | 2,321 | 2,234 | ||
Change in current assets and liabilities, net of acquisitions of businesses: | |||||
Accounts receivable, net | (3,165) | (2,185) | 1,282 | ||
Inventories, net | (3,679) | (2,454) | (487) | ||
Uniforms and other rental items in service | 1,959 | (1,840) | (2,764) | ||
Prepaid expenses and other current assets | 307 | 116 | (117) | ||
Accounts payable | (242,875) | (4,884) | (98) | ||
Accrued compensation and related liabilities | 1,337 | 571 | (1,337) | ||
Accrued liabilities and other | 2,361 | 155 | 6,322 | ||
Income taxes, current | (1,774) | (577) | (1,035) | ||
Net cash provided by (used in) operating activities | (214,154) | 14,097 | 25,053 | ||
Cash flows from investing activities: | |||||
Capital expenditures | (16,672) | (12,930) | (14,462) | ||
Proceeds from redemption of marketable securities | 218,324 | 434,179 | 161,938 | ||
Purchase of marketable securities and investments | 598,344 | (488,765) | (179,130) | ||
Proceeds from Storage transactions, net of cash contributed | 0 | 3,239 | 65,041 | ||
Proceeds from sale of Shred-it | 1,941 | 12,614 | 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 | 9,644 | (25,793) | 0 | ||
Other | (520,007) | 1,897 | 3,705 | ||
Net cash (used in) provided by investing activities | 291,574 | (75,559) | 37,092 | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of commercial paper, net | 0 | ||||
Proceeds from issuance of debt, net | 2,000 | 165 | 2,615 | ||
Repayment of debt | 0 | (365) | (2,280) | ||
Payment of short-term debt financing fees | 0 | ||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | 0 | ||
Dividends paid | (55) | (41) | (60) | ||
Repurchase of common stock | 0 | 0 | 0 | ||
Other | 0 | (732) | 0 | ||
Net cash provided by (used in) financing activities | 1,945 | (973) | 275 | ||
Effect of exchange rate changes on cash and cash equivalents | (2,131) | (5,218) | (8,918) | ||
Net increase (decrease) in cash and cash equivalents | 77,234 | (67,653) | 53,502 | ||
Cash and cash equivalents at beginning of year | 26,072 | 93,725 | 40,223 | ||
Cash and cash equivalents at end of year | $ 93,725 | $ 26,072 | $ 103,306 | $ 26,072 | 93,725 |
Non- Guarantors | Reportable Legal Entities | Shred-it Partnership | |||||
Cash flows from investing activities: | |||||
Dividends received on equity method investment | $ 0 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Service Line and Business Unit - Discontinued Operations, Held-for-sale or Disposed of by Sale - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | Jul. 11, 2017 | |
Subsequent Event [Line Items] | ||||
Revenue | $ 105.6 | $ 109.7 | $ 107.2 | |
Diluted earnings per share (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.07 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Sale price | $ 130 |
Schedule II - Valuation and 106
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Allowance for Doubtful Accounts | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Year | $ 19,103 | $ 15,497 | $ 14,262 | |
Additions | [1] | 6,446 | 8,274 | 5,289 |
Deductions | [2] | 5,024 | 4,668 | 4,054 |
Balance at End of Year | 20,525 | 19,103 | 15,497 | |
Reserve for Obsolete Inventory | ||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at Beginning of Year | 32,716 | 30,531 | 30,459 | |
Additions | [1] | 10,049 | 5,195 | 2,952 |
Deductions | [2] | 4,460 | 3,010 | 2,880 |
Balance at End of Year | $ 38,305 | $ 32,716 | $ 30,531 | |
[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 obsolescence. (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. | |||
[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. |