Cover
Cover - USD ($) | 12 Months Ended | ||
May 31, 2022 | Jun. 30, 2022 | Nov. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | May 31, 2022 | ||
Current Fiscal Year End Date | --05-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-11399 | ||
Entity Registrant Name | Cintas Corp | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 31-1188630 | ||
Entity Address, Address Line One | 6800 Cintas Boulevard | ||
Entity Address, Address Line Two | P.O. Box 625737 | ||
Entity Address, City or Town | Cincinnati, | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 45262-5737 | ||
City Area Code | (513) | ||
Local Phone Number | 459-1200 | ||
Title of 12(b) Security | Common stock, no par value | ||
Trading Symbol | CTAS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 43,766,089,501 | ||
Entity Common Stock, Shares Outstanding | 101,188,086 | ||
Documents Incorporated by Reference | Portions of the Registrant's Proxy Statement to be filed with the Commission for its 2022 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K. | ||
Amendment Flag | false | ||
Entity CIK | 0000723254 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
May 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Auditor Location | Cincinnati, Ohio |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Revenue: | |||
Revenue | $ 7,854,459 | $ 7,116,340 | $ 7,085,120 |
Costs and expenses: | |||
Selling and administrative expenses | 2,044,876 | 1,929,159 | 2,071,052 |
Operating income | 1,587,370 | 1,385,492 | 1,162,696 |
Interest income | (242) | (467) | (988) |
Interest expense | 88,844 | 98,210 | 105,393 |
Income before income taxes | 1,498,768 | 1,287,749 | 1,058,291 |
Income taxes | 263,011 | 176,781 | 181,931 |
Income from continuing operations | 1,235,757 | 1,110,968 | 876,360 |
Loss from discontinued operations, net of tax benefit of $0, $0 and $(107), respectively | 0 | 0 | (323) |
Net income | $ 1,235,757 | $ 1,110,968 | $ 876,037 |
Basic earnings per share: | |||
Continuing operations (in dollars per share) | $ 11.92 | $ 10.52 | $ 8.36 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 |
Basic earnings per share (in dollars per share) | 11.92 | 10.52 | 8.36 |
Diluted earnings per share: | |||
Continuing operations (in dollars per share) | 11.65 | 10.24 | 8.11 |
Discontinued operations (in dollars per share) | 0 | 0 | 0 |
Diluted earnings per share (in dollars per share) | 11.65 | 10.24 | 8.11 |
Dividends declared and paid per share (in dollars per share) | $ 3.80 | $ 5.01 | $ 2.55 |
Uniform rental and facility services | |||
Revenue: | |||
Revenue | $ 6,226,980 | $ 5,689,632 | $ 5,643,494 |
Costs and expenses: | |||
Cost of revenue | 3,316,433 | 2,983,514 | 3,055,145 |
Other | |||
Revenue: | |||
Revenue | 1,627,479 | 1,426,708 | 1,441,626 |
Costs and expenses: | |||
Cost of revenue | $ 905,780 | $ 818,175 | $ 796,227 |
Consolidated Statements of In_2
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Income Statement [Abstract] | |||
Discontinued operations, income tax (benefit) expense | $ 0 | $ 0 | $ (107) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,235,757 | $ 1,110,968 | $ 876,037 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (24,833) | 68,182 | (11,321) |
Change in fair value of interest rate lock agreements, net of tax expense (benefit) of $34,932, $36,172 and $(32,793), respectively | 102,057 | 106,843 | (94,954) |
Amortization of interest rate lock agreement, net of tax benefit of $672, $463 and $463, respectively | (2,061) | (1,433) | (1,433) |
Other, net of tax expense (benefit) of $638, $3,578 and $(2,802), respectively | 1,866 | 10,676 | (8,495) |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | 77,029 | 184,268 | (116,203) |
Comprehensive income | $ 1,312,786 | $ 1,295,236 | $ 759,834 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Change in fair value of interest rate lock agreements, tax expense (benefit) | $ 34,932 | $ 36,172 | $ (32,793) |
Amortization of interest rate lock agreement, tax benefit | 672 | 463 | 463 |
Other, tax expense (benefit) | 638 | 3,578 | (2,802) |
Other comprehensive income (loss), tax expense | $ 36,242 | $ 40,213 | $ (35,132) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 90,471 | $ 493,640 |
Accounts receivable, principally trade, less allowance of $12,918 and $12,097, respectively | 1,006,220 | 901,710 |
Inventories, net | 472,150 | 481,797 |
Uniforms and other rental items in service | 916,706 | 810,104 |
Income taxes, current | 21,708 | 22,282 |
Prepaid expenses and other current assets | 124,728 | 133,776 |
Total current assets | 2,631,983 | 2,843,309 |
Property and equipment, net | 1,323,673 | 1,318,438 |
Investments | 242,873 | 274,616 |
Goodwill | 3,042,976 | 2,913,069 |
Service contracts, net | 391,638 | 408,445 |
Operating lease right-of-use assets, net | 170,003 | 168,532 |
Other assets, net | 344,110 | 310,414 |
Total assets | 8,147,256 | 8,236,823 |
Current liabilities: | ||
Accounts payable | 251,504 | 230,786 |
Accrued compensation and related liabilities | 236,992 | 241,469 |
Accrued liabilities | 588,948 | 518,910 |
Operating lease liabilities, current | 43,872 | 43,850 |
Debt due within one year | 311,574 | 899,070 |
Total current liabilities | 1,432,890 | 1,934,085 |
Long-term liabilities: | ||
Debt due after one year | 2,483,932 | 1,642,833 |
Deferred income taxes | 473,777 | 386,647 |
Operating lease liabilities | 129,064 | 130,774 |
Accrued liabilities | 319,397 | 454,637 |
Total long-term liabilities | 3,406,170 | 2,614,891 |
Shareholders' equity: | ||
Preferred stock, no par value: 100,000 shares authorized, none outstanding | 0 | 0 |
Common stock, no par value, and paid-in capital: 425,000,000 shares authorized 2022: 190,837,921 shares issued and 101,711,215 shares outstanding 2021: 189,071,185 shares issued and 104,061,391 shares outstanding | 1,771,917 | 1,516,202 |
Retained earnings | 8,719,163 | 7,877,015 |
Treasury stock: 2022: 89,126,706 shares 2021: 85,009,794 shares | (7,290,801) | (5,736,258) |
Accumulated other comprehensive income | 107,917 | 30,888 |
Total shareholders' equity | 3,308,196 | 3,687,847 |
Total liabilities and shareholders' equity | $ 8,147,256 | $ 8,236,823 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 12,918 | $ 12,097 |
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) | 190,837,921 | 189,071,185 |
Common stock, shares outstanding (in shares) | 101,711,215 | 104,061,391 |
Treasury stock, shares (in shares) | 89,126,706 | 85,009,794 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative effect of change in accounting principle | Common Stock and Paid-In Capital | Retained Earnings | Retained Earnings Cumulative effect of change in accounting principle | Other Accumulated Comprehensive (Loss) Income | Other Accumulated Comprehensive (Loss) Income Cumulative effect of change in accounting principle | Treasury Stock |
Beginning balance (in shares) at May. 31, 2019 | 184,791,000 | |||||||
Beginning balance at May. 31, 2019 | $ 3,002,721 | $ (833) | $ 1,068,256 | $ 6,691,236 | $ (2,808) | $ (39,152) | $ 1,975 | $ (4,717,619) |
Beginning balance (in shares) at May. 31, 2019 | (81,506,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 876,037 | 876,037 | ||||||
Comprehensive income (loss), net of tax | (116,203) | (116,203) | ||||||
Dividends | (267,956) | (267,956) | ||||||
Stock-based compensation | 115,435 | $ 115,435 | ||||||
Vesting of stock-based compensation awards (in shares) | 641,000 | |||||||
Stock options exercised (in shares) | 1,361,000 | |||||||
Stock options exercised | 90,519 | $ 90,519 | ||||||
Repurchase of common stock (in shares) | (1,872,000) | |||||||
Repurchase of common stock | (464,518) | $ (464,518) | ||||||
Ending balance (in shares) at May. 31, 2020 | 186,793,000 | |||||||
Ending balance at May. 31, 2020 | 3,235,202 | $ 1,274,210 | 7,296,509 | (153,380) | $ (5,182,137) | |||
Ending balance (in shares) at May. 31, 2020 | (83,378,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,110,968 | 1,110,968 | ||||||
Comprehensive income (loss), net of tax | 184,268 | 184,268 | ||||||
Dividends | (530,462) | (530,462) | ||||||
Stock-based compensation | 112,035 | $ 112,035 | ||||||
Vesting of stock-based compensation awards (in shares) | 610,000 | |||||||
Stock options exercised (in shares) | 1,668,000 | |||||||
Stock options exercised | 129,957 | $ 129,957 | ||||||
Repurchase of common stock (in shares) | (1,632,000) | |||||||
Repurchase of common stock | $ (554,121) | $ (554,121) | ||||||
Ending balance (in shares) at May. 31, 2021 | 189,071,185 | 189,071,000 | ||||||
Ending balance at May. 31, 2021 | $ 3,687,847 | $ 1,516,202 | 7,877,015 | 30,888 | $ (5,736,258) | |||
Ending balance (in shares) at May. 31, 2021 | (85,010,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 1,235,757 | 1,235,757 | ||||||
Comprehensive income (loss), net of tax | 77,029 | 77,029 | ||||||
Dividends | (393,609) | (393,609) | ||||||
Stock-based compensation | 109,308 | $ 109,308 | ||||||
Vesting of stock-based compensation awards (in shares) | 528,000 | |||||||
Stock options exercised (in shares) | 1,239,000 | (71,000) | ||||||
Stock options exercised | 117,737 | $ 146,407 | $ (28,670) | |||||
Repurchase of common stock (in shares) | (4,046,000) | |||||||
Repurchase of common stock | $ (1,525,873) | $ (1,525,873) | ||||||
Ending balance (in shares) at May. 31, 2022 | 190,837,921 | 190,838,000 | ||||||
Ending balance at May. 31, 2022 | $ 3,308,196 | $ 1,771,917 | $ 8,719,163 | $ 107,917 | $ (7,290,801) | |||
Ending balance (in shares) at May. 31, 2022 | (89,127,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 1,235,757 | $ 1,110,968 | $ 876,037 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 249,376 | 243,836 | 235,905 |
Amortization of intangible assets and capitalized contract costs | 150,325 | 144,115 | 143,148 |
Stock-based compensation | 109,308 | 112,035 | 115,435 |
Gain on equity method investment transaction | (30,151) | 0 | 0 |
Net gain on sale of operating assets | (12,129) | (22,030) | 0 |
Long-lived asset impairment | 0 | 5,114 | 9,220 |
Deferred income taxes | 52,110 | (42,242) | (16,252) |
Change in current assets and liabilities, net of acquisitions of businesses: | |||
Accounts receivable, net | (100,392) | (32,576) | 39,681 |
Inventories, net | 16,194 | (75,501) | (74,773) |
Uniforms and other rental items in service | (111,332) | (35,659) | 12,773 |
Prepaid expenses and other current assets and capitalized contract costs | (28,581) | (102,600) | (110,248) |
Accounts payable | 22,697 | (2,604) | 2,629 |
Accrued compensation and related liabilities | (3,625) | 113,769 | (26,476) |
Accrued liabilities and other | (9,241) | (6,735) | 49,906 |
Income taxes, current | (2,691) | (49,150) | 34,498 |
Net cash provided by operating activities | 1,537,625 | 1,360,740 | 1,291,483 |
Cash flows from investing activities: | |||
Capital expenditures | (240,672) | (143,470) | (230,289) |
Purchase of investments | (6,076) | (4,299) | (10,031) |
Proceeds from sale of operating assets, net of cash disposed | 15,347 | 31,705 | 13,300 |
Acquisitions of businesses, net of cash acquired | (164,228) | (10,038) | (53,720) |
Other, net | (7,006) | (11,113) | (4,658) |
Net cash used in investing activities | (402,635) | (137,215) | (285,398) |
Cash flows from financing activities: | |||
Issuance (payments) of commercial paper, net | 261,200 | 0 | (112,500) |
Proceeds from issuance of debt | 1,190,506 | 0 | 0 |
Repayment of debt | (1,200,000) | 0 | (200,000) |
Proceeds from exercise of stock-based compensation awards | 117,737 | 129,957 | 90,519 |
Dividends paid | (375,119) | (451,327) | (267,956) |
Repurchase of common stock | (1,525,873) | (554,121) | (464,518) |
Other, net | (6,394) | (4,377) | (752) |
Net cash used in financing activities | (1,537,943) | (879,868) | (955,207) |
Effect of exchange rate changes on cash and cash equivalents | (216) | 4,581 | (2,121) |
Net (decrease) increase in cash and cash equivalents | (403,169) | 348,238 | 48,757 |
Cash and cash equivalents at beginning of year | 493,640 | 145,402 | 96,645 |
Cash and cash equivalents at end of year | $ 90,471 | $ 493,640 | $ 145,402 |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
May 31, 2022 | |
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, Company, we, us or our) helps more than one million businesses of all types and sizes, primarily in the United States (U.S.), as well as Canada and Latin America, get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday ® . Cintas’ reportable operating segments are the Uniform Rental and Facility Services operating segment and the First Aid and Safety Services operating segment. The Uniform Rental and Facility Services reportable operating segment, consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ operating segments, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, are included in All Other. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes the reportable operating segments for the years ended May 31, 2022, 2021 and 2020 are presented in Note 15 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. We have operations throughout the U.S. and Canada and participate in a global supply chain. Since fiscal 2020, the existence of the novel strain of coronavirus (COVID-19) pandemic, the fear associated with the COVID-19 pandemic and the reactions of governments around the world in response to the COVID-19 pandemic to regulate the flow of labor and products and impede the business of our customers, impacted our ability to conduct normal business operations, which had an adverse effect on our business. Many of Cintas' customers were also impacted by the COVID-19 pandemic, and we saw an impact on some customer's ability to pay timely. While there was minimal disruption to our supply chain, Cintas did increase inventory, primarily personal protective equipment and facility services inventory, in response to the customer needs and demand associated with the safety and cleanliness requirements of COVID-19. The increase in inventory resulted in additional inventory reserves during fiscal 2022 and fiscal 2021. The roll out of the COVID-19 vaccines and gradual lifting of COVID-19 restrictions had a positive impact on our business during fiscal 2022. The impact of the on-going COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, consolidated results of operations, consolidated financial condition or liquidity will ultimately be impacted. 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. generally accepted accounting principles (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 may 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 or the performance obligation under the terms of a contract with a customer are satisfied. 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 the performance obligation under the terms of a contract with a customer are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for the performance of the service or transfer of the inventory. See Note 2 entitled Revenue Recognition. 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, service 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 and capitalized contract costs. As a result of the adverse impact that the COVID-19 pandemic, Cintas recorded a total of $24.5 million in employee termination costs at the onset of the COVID-19 pandemic in fiscal 2020, of which $20.2 million was recorded in the Uniform Rental and Facility Services reportable operating segment. The amount of employee termination benefits paid during the fiscal year ended May 31, 2021 and 2020 was $10.2 million and $14.3 million, respectively. Cintas did not record employee termination costs during fiscal 2022 or 2021. 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 both May 31, 2022 and 2021, cash and cash equivalents includes $31.8 million of restricted cash used as collateral associated with our insurance reserve. 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 includes both an estimate, based on historical rates of collections, and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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, net. Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Inventory is comprised of the following amounts at May 31: (In thousands) 2022 2021 Raw materials $ 19,071 $ 15,109 Work in process 34,280 37,664 Finished goods 418,799 429,024 $ 472,150 $ 481,797 Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $100.3 million and $111.0 million at May 31, 2022 and 2021, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. The disruption created by the COVID-19 pandemic beginning in the fourth quarter of fiscal 2020 resulted in larger quantities of inventory on hand as of May 31, 2022 and 2021. As of May 31, 2022 and 2021, our Uniform Rental and Facility Services and First Aid and Safety reportable operating segments held an excess amount of personal protective equipment inventory on hand. The excess inventory, determined through specific identification, resulted in a specific reserve of $28.5 million and $43.6 million as of May 31, 2022 and 2021, respectively. Obsolete inventory reserves are recorded in selling and administrative expenses on the consolidated statements of income. The judgment applied to record the obsolete inventory reserve as of May 31, 2022 and 2021, beyond our historical policy was deemed to be reasonable and supportable based on the data available as of the consolidated balance sheet dates. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up. Uniforms and other rental items in service. These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory and related cost of uniforms and 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: Years Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 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. In fiscal 2020, as a result of certain activities to eliminate excess capacity and reduce our cost structure in response to the onset of the COVID-19 pandemic, an indicator of impairment was identified. Cintas recognized an impairment loss of $9.2 million in the Uniform Rental and Facility Services reportable operating segment during the year ended May 31, 2020. Based on its regular evaluation and the evolving impact of the COVID-19 pandemic, Cintas recognized a long-lived asset impairment loss of $5.1 million in the Uniform Direct Sale operating segment during the year ended May 31, 2021. The long-lived asset impairments in fiscal 2021 and 2020 were based on the excess of the carrying amount of asset over their respective fair values and were recorded within selling and administrative expenses on the consolidated statements of income. The undiscounted cash flows were estimated, using Level 2 inputs based on both the cost and market approaches, at the lowest discernible level of cash flows, which is at the location level. Cintas did not identify any indicators of impairment for the fiscal year ended May 31, 2022. Goodwill. Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment test, that includes an assessment of quantitative and qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions and entity specific factors such as strategies and financial performance. We test for goodwill impairment at the reporting unit level. Cintas has identified four reporting units for purposes of evaluating goodwill impairment: Uniform Rental and Facility Services, First Aid and Safety Services and two reporting units within All Other. 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, 2022, 2021 or 2020. 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 capitalized contract costs and noncompete and consulting agreements obtained through acquisitions of businesses, are generally amortized by use of the straight-line method, or an accelerated method that represents the estimated economic benefit, over the estimated lives of the agreements, which are generally 5 to 15 years. Certain noncompete agreements, as well as all service contracts, require that a valuation be determined using a discounted cash flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. No impairment has been recognized by Cintas for the fiscal years ended May 31, 2022, 2021 and 2020. Business acquisitions. The Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at the acquisition date. The excess of the acquisition price over the estimated fair value of the net assets acquired is recorded as goodwill. Goodwill is adjusted for any changes to acquisition date fair value amounts made within the measurement period. Acquisition-related transaction costs are recognized separately from the business combinations and expensed as incurred. Debt issuance costs. Debt issuance costs for the revolving credit facility are included in other assets, net and all other debt issuance costs reduce the carrying amount of 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 consist of the following at May 31: (In thousands) 2022 2021 Insurance reserve 163,958 $ 156,447 Employee benefit related liabilities 146,237 129,348 Dividends 97,525 79,135 Accrued interest 15,448 24,420 Other 165,780 129,560 $ 588,948 $ 518,910 Long-term accrued liabilities consist primarily of retirement obligations, which are described in more detail in Note 11 entitled Employee Benefit Plans, interest rate lock agreements, which are described in more detail in Note 7 entitled Debt and Derivatives, reserves associated with unrecognized tax benefits, which are described in more detail in Note 9 entitled Income Taxes and environmental obligations, which are further described below. Insurance reserve. The insurance reserve represents 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 incurred but not reported reserve is estimated through actuarial procedures, with the assistance of third-party actuarial specialists, 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. Environmental obligations. Environmental obligations, including obligations obtained through past business acquisitions, are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. Cintas’ environmental obligations are estimated based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, and remediation experience. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been recorded. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Management actively monitors all locations for compliance and changes in facts and circumstances. No one location or site is deemed to be material or in violation of the applicable laws and regulations, even though costs are being incurred. Costs estimated for environmental obligations are not discounted to their present value. 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 ten percent of the larger of the projected benefit obligations or the plan assets, defined as the "corridor." Amounts outside the corridor are amortized over the plan participants' life expectancy. We determine the expected return on assets using the fair value of plan assets. See Note 11 entitled Employee Benefit Plans. Stock-based compensation. Compensation expense is recognized for all share-based payments to employees, including stock options and restricted stock awards, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Generally, 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. See Note 13 entitled Stock-Based Compensation. 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 (loss) in shareholders' equity and subsequently recognized in net income when the hedged item affects net income. Income taxes. The provision for income taxes includes taxes paid, currently payable or receivable and those deferred. 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. Cintas accounts for Global Intangible Low-Taxed Income (GILTI) as a current-period expense when incurred. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in future periods. See Note 9 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. The Company, the Board of Directors, Scott Farmer (Executive Chairman) and the Investment Policy Committee are defendants in a purported class action, filed on December 13, 2019, pending in the U.S. District Court for the Southern District of Ohio alleging violations of The Employee Retirement Income Security Act of 1974 (ERISA). The lawsuit asserts that the defendants improperly managed the costs of the employee retirement plan, breached their fiduciary duties in failing to investigate and select lower cost alternative funds and failed to monitor and control the employee retirement plan’s recordkeeping costs. The defendants deny liability and a legal contingency is neither probable or estimable at May 31, 2022 or 2021. Fair value measurements. Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements (ASC 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, 2022 or 2021. 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 revalued in an impairment analysis and to assets and liabilities acquired in a business acquisition unless otherwise noted in Note 3 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). 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. See Note 10 entitled Acquisitions for additional information. New accounting pronouncements. In December 2019, the FASB issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes (ASC 740), in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on June 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements currently but may in future periods. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
May 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following table presents Cintas' total revenue disaggregated by operating segment for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Uniform Rental and Facility $ 6,226,980 79.3 % $ 5,689,632 80.0 % $ 5,643,494 79.6 % First Aid and Safety Services 832,458 10.6 % 784,291 11.0 % 708,569 10.0 % Fire Protection Services 527,517 6.7 % 446,441 6.3 % 422,688 6.0 % Uniform Direct Sales 267,504 3.4 % 195,976 2.7 % 310,369 4.4 % Total revenue $ 7,854,459 100.0 % $ 7,116,340 100.0 % $ 7,085,120 100.0 % Fire Protection Services and Uniform Direct Sales operating segments are included within All Other as disclosed in Note 15 entitled Operating Segment Information. Revenue Recognition Policy Approximately 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services customers, performed by a Cintas employee-partner, at the customer's location of business. Revenue from our route servicing customer contracts represent a single-performance obligation. The Company recognizes revenue over time as services are performed based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business. The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer. Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the fiscal years ended May 31, 2022, 2021 or 2020. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). These assets are included in other current assets and in other assets, net on the consolidated balance sheets. We are exposed to credit losses primarily through our trade receivables. We determine the allowance for credit losses using both an estimate, based on historical rates of collections and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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 operating segment. We update our estimate of credit loss reserves quarterly, considering recent write-offs and collections information and underlying economic expectations. Costs to Obtain a Contract |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
May 31, 2022 | |
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 classified within 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, 2022 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 90,471 $ — $ — $ 90,471 Other assets, net: Interest rate lock agreements — 56,877 — 56,877 Total assets at fair value $ 90,471 $ 56,877 $ — $ 147,348 As of May 31, 2021 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 493,640 $ — $ — $ 493,640 Other assets, net: Interest rate lock agreements — 40,400 — 40,400 Total assets at fair value $ 493,640 $ 40,400 $ — $ 534,040 Long-term accrued liabilities: Interest rate lock agreements $ — $ 61,567 $ — $ 61,567 Total liabilities at fair value $ — $ 61,567 $ — $ 61,567 Cintas' cash and cash equivalents are generally classified within Level 1 or Level 2 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets, and financial instruments classified as Level 2 are based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments. The fair values of Cintas' interest rate lock agreements are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy. The fair value was determined by comparing the locked rates against the benchmarked treasury rate. No other amounts included in other asset, net or long-term accrued liabilities are recorded at fair value on a recurring basis. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated balance sheet dates. |
Property and Equipment
Property and Equipment | 12 Months Ended |
May 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Cintas' property and equipment is summarized as follows at May 31: (In thousands) 2022 2021 Land $ 191,878 $ 190,711 Buildings and improvements 699,430 698,094 Equipment 2,548,796 2,409,785 Leasehold improvements 43,426 38,320 Construction in progress 52,062 36,749 3,535,592 3,373,659 Accumulated depreciation (2,211,919) (2,055,221) Property and equipment, net $ 1,323,673 $ 1,318,438 |
Investments
Investments | 12 Months Ended |
May 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Cintas' investments are summarized as follows at May 31: (In thousands) 2022 2021 Cash surrender value of insurance policies $ 237,136 $ 252,061 Equity method investments 3,574 19,388 Cost method investments 2,163 3,167 Total investments $ 242,873 $ 274,616 Investments are generally evaluated for impairment on an annual basis or when indicators of impairment exist. For fiscal years 2022, 2021 and 2020, no impairment losses were recorded. During fiscal 2022, Cintas acquired the remaining interest of an equity method investment, and as a result, such investment is no longer accounted for as an equity method investment at May 31, 2022, and is no longer included in the table above. See Note 10 entitled Acquisitions for more information. |
Goodwill, Service Contracts and
Goodwill, Service Contracts and Other Assets | 12 Months Ended |
May 31, 2022 | |
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 presented in the following tables: Goodwill (In thousands) Uniform Rental First Aid All Total Balance at June 1, 2020 $ 2,513,041 $ 243,266 $ 113,713 $ 2,870,020 Goodwill acquired 1,568 2,545 3,161 7,274 Foreign currency translation 32,901 2,760 114 35,775 Balance at May 31, 2021 2,547,510 248,571 116,988 2,913,069 Goodwill acquired 99,826 38,281 5,162 143,269 Foreign currency translation (12,237) (1,083) (42) (13,362) Balance at May 31, 2022 $ 2,635,099 $ 285,769 $ 122,108 $ 3,042,976 Service Contracts (In thousands) Uniform Rental First Aid All Total Balance at June 1, 2020 $ 407,611 $ 19,805 $ 24,113 $ 451,529 Service contracts acquired 2,369 2,132 1,736 6,237 Service contracts amortization (49,016) (3,912) (4,839) (57,767) Foreign currency translation 8,177 269 — 8,446 Balance at May 31, 2021 369,141 18,294 21,010 408,445 Service contracts acquired 32,695 10,384 1,659 44,738 Service contracts amortization (49,152) (4,392) (4,809) (58,353) Foreign currency translation (3,050) (142) — (3,192) Balance at May 31, 2022 $ 349,634 $ 24,144 $ 17,860 $ 391,638 Information regarding Cintas' service contracts and other assets is as follows as of May 31: 2022 2021 (In thousands) Carrying Accumulated Net Carrying Accumulated Net Service contracts $ 1,001,311 $ 609,673 $ 391,638 $ 961,942 $ 553,497 $ 408,445 Capitalized contract costs (1) $ 551,582 $ 319,358 $ 232,224 $ 459,079 $ 231,940 $ 227,139 Noncompete and consulting 50,637 43,775 6,862 44,683 42,408 2,275 Other 125,941 20,917 105,024 105,371 24,371 81,000 Other assets $ 728,160 $ 384,050 $ 344,110 $ 609,133 $ 298,719 $ 310,414 (1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated balance sheets as of May 31, 2022 and 2021, is $83.7 million and $79.4 million, respectively. Amortization expense for service contracts and other assets was $148.4 million, $141.9 million and $140.8 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. At May 31, 2022, the weighted average amortization period for service contracts, capitalized contract costs, noncompete and consulting agreements and other was 13 years, 7 years, 5 years and 10 years, respectively. As of May 31, 2022, the estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, is as follows: Fiscal Year (In thousands) 2023 $ 139,037 2024 126,603 2025 112,032 2026 93,662 2027 75,033 Thereafter 172,245 Total future amortization expense $ 718,612 |
Debt and Derivatives
Debt and Derivatives | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt and Derivatives | Debt and Derivatives Cintas' outstanding debt is summarized as follows at May 31: (In thousands) Interest Fiscal Year Fiscal Year 2022 2021 Debt due within one year Commercial paper 1.20 % (1) 2022 2023 $ 261,200 $ — Senior notes (2) 2.78 % 2013 2023 50,380 — Senior notes 4.30 % 2012 2022 — 250,000 Senior notes 2.90 % 2017 2022 — 650,000 Debt issuance costs (6) (930) Total debt due within one year $ 311,574 $ 899,070 Debt due after one year Senior notes 3.25 % 2013 2023 $ — $ 300,000 Senior notes (2) 2.78 % 2013 2023 — 50,815 Senior notes (3) 3.11 % 2015 2025 50,965 51,301 Senior notes 3.45 % 2022 2025 400,000 — Senior notes 3.70 % 2017 2027 1,000,000 1,000,000 Senior notes 4.00 % 2022 2032 800,000 — Senior notes 6.15 % 2007 2037 250,000 250,000 Debt issuance costs (17,033) (9,283) Total debt due after one year $ 2,483,932 $ 1,642,833 (1) Variable rate debt instrument. The rate presented is the variable rate at May 31, 2022. (2) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%. (3) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%. The average interest rate for all Cintas debt at May 31, 2022 was 3.7%, with maturity dates through fiscal year 2037. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of May 31, 2022 were $2,811.2 million and $2,862.2 million, respectively, and as of May 31, 2021 were $2,550.0 million and $2,788.8 million, respectively. On June 1, 2021, in accordance with the terms of the notes, Cintas paid the $250.0 million aggregate principal amount outstanding of its 4.30%, 10-year senior notes that matured on that date with cash on hand. On April 1, 2022, in accordance with the terms of the notes, Cintas paid the $650.0 million aggregate principal amount outstanding of its 2.90%, 5-year senior notes that matured on that date with proceeds from short-term borrowings. On May 1, 2022, Cintas redeemed at par value the $300.0 million aggregate principal amount outstanding of its 3.25%, 10-year senior notes 30 days in advance of the maturation date with proceeds from short-term borrowings. On May 3, 2022, Cintas issued $400.0 million aggregate principal amount of senior notes that bear an interest rate of 3.45% and mature on May 1, 2025. On May 3, 2022, Cintas also issued $800.0 million aggregate principal amount of senior notes that bear an interest rate of 4.00% and mature on May 1, 2032. The net proceeds from these issuances were utilized for general business purposes, including reducing Cintas’ short-term borrowings. Letters of credit outstanding were $106.7 million and $120.6 million at May 31, 2022 and 2021, respectively. Maturities of debt during each of the next five years are $311.2 million, $0.0 million, $450.0 million, $0.0 million and $1,000.0 million, respectively. Interest paid was $97.8 million, $98.3 million and $105.5 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The credit agreement that supports our commercial paper program was amended and restated on March 23, 2022. The amendment increased the capacity of the revolving credit facility from $1.0 billion to $2.0 billion. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is March 23, 2027. As of May 31, 2022, there was $261.2 million of commercial paper outstanding with a weighted average interest rate of 1.20% and maturity dates less than 120 days and no borrowings on our revolving credit facility. During the fiscal year ended May 31, 2022, Cintas issued a net total of $261.2 million of commercial paper. As of May 31, 2021, there was no commercial paper outstanding and no borrowings on our revolving credit facility. There was no commercial paper outstanding during fiscal 2021. The fair value of the commercial paper, which approximates carrying value, is estimated using level 2 inputs based on general market prices and interest rates. Subsequent to May 31, 2022, in June 2022, Cintas borrowed $125.0 million under the revolving credit facility to fund short-term operating needs and repaid the amount later in June 2022. 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 locks, which represent cash flow hedges, to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2012, fiscal 2013, fiscal 2017 and fiscal 2022. The amortization of the interest rate locks resulted in a decrease to other comprehensive income (loss) of $2.1 million, $1.4 million and $1.4 million in the fiscal years ended May 31, 2022, 2021 and 2020, respectively. During fiscal 2022, fiscal 2020 and fiscal 2019, Cintas entered into interest rate lock agreements for forecasted debt issuances. The aggregate notional value of outstanding cash flow hedges was $500.0 million and $1.2 billion at May 31, 2022 and 2021, respectively. The fair values of the outstanding interest rate locks, for forecasted debt issuances, are summarized as follows at May 31: 2022 2021 Fiscal Year of Issuance (in thousands) Other Other Long-term 2022 $ 18,331 $ — $ — 2020 $ 38,546 $ 40,400 $ — 2019 $ — $ — $ 61,657 The interest rate locks are also recorded in other comprehensive income (loss), net of tax. In conjunction with the issuance of long-term debt in fiscal 2022, Cintas settled interest rate lock agreements, which were in an asset position of $58.9 million at the date of settlement, with the cash received recorded within operating cash flows, in accordance with Company's accounting policy. The balance recorded in other comprehensive income (loss) will be amortized as a reduction to interest expense beginning in the fourth quarter of fiscal 2022 through the remaining life of the debt. The interest rate locks had no impact on net income or cash flows from continuing operations for the fiscal years ended May 31, 2021 or 2020. |
Leases
Leases | 12 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Leases | Leases Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated balance sheet. Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of uniform rental and facility services and other on the Company's consolidated statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease costs, including short-term lease expense and variable lease costs, which were immaterial in each period, were $74.5 million, $71.0 million and $70.4 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The following table provides supplemental information related to the Company's consolidated statements of cash flows for the fiscal years ended May 31: (In thousands) 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 49,579 $ 49,345 Operating lease right-of-use assets obtained in exchange for new and renewed $ 26,862 $ 51,850 Operating lease right-of-use assets acquired in business combinations $ 17,734 $ — Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows at May 31: 2022 2021 Weighted-average remaining lease term - operating leases 5.40 years 5.33 years Weighted-average discount rate - operating leases 2.20% 2.32% The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of May 31, 2022: (In thousands) 2023 $ 47,099 2024 37,499 2025 29,147 2026 22,673 2027 15,701 Thereafter 31,498 Total payments 183,617 Less interest (10,681) Total present value of lease payments $ 172,936 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes for continuing operations consists of the following components for the fiscal years ended May 31: (In thousands) 2022 2021 2020 U.S. operations $ 1,445,719 $ 1,221,690 $ 1,035,902 Foreign operations 53,049 66,059 22,389 $ 1,498,768 $ 1,287,749 $ 1,058,291 Income tax expense (benefit) for continuing operations consists of the following components for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Current: Federal $ 162,269 $ 164,104 $ 153,736 State and local 32,431 42,340 34,502 Foreign 16,676 12,417 6,985 211,376 218,861 195,223 Deferred 51,635 (42,080) (13,292) $ 263,011 $ 176,781 $ 181,931 Reconciliation of income tax expense for continuing operations using the statutory rate and actual income tax expense is as follows for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Income taxes at the U.S. federal statutory rate $ 314,741 $ 270,427 $ 222,258 Permanent differences (1) (85,413) (101,870) (67,075) State and local income taxes, net of federal benefit 33,547 27,304 25,294 Capital loss carryback — (14,072) — Other 136 (5,008) 1,454 $ 263,011 $ 176,781 $ 181,931 (1) Primarily consists of the excess tax benefits related to stock-based compensation. The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31: (In thousands) 2022 2021 Deferred tax assets: Reserves related to accounts receivable $ 10,928 $ 10,292 Inventory obsolescence 28,020 30,617 Insurance reserves 45,237 45,802 Stock-based compensation 62,522 74,898 Operating lease liabilities 43,745 44,530 Deferred compensation and other 92,250 114,553 282,702 320,692 Valuation allowance — (2,037) 282,702 318,655 Deferred tax liabilities: Uniform and other rental items in service 226,510 202,846 Property and equipment 171,819 167,622 Service contracts and other intangible assets 199,256 207,834 Treasury locks 31,566 — Capitalized contract costs 81,314 79,356 Operating lease right-of-use assets 43,745 44,530 State taxes and other 2,269 3,114 756,479 705,302 Net deferred tax liability $ 473,777 $ 386,647 Although realization is not assured, management has evaluated its deferred tax assets to determine whether a valuation allowance is required or should be adjusted. This evaluation considers, among other items, the nature, frequency and amount of recent losses, reversal periods of taxable temporary differences, duration of statutory periods and tax planning strategies. As a result of this analysis, 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 at May 31: (In thousands) 2022 2021 Balance at beginning of year $ (2,037) $ (6,411) Subtractions 2,037 4,374 Balance at end of year $ — $ (2,037) Income taxes paid were $208.5 million, $245.5 million and $160.3 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. As of May 31, 2022 and 2021, there was $30.8 million and $34.2 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, 2022 and 2021, was $4.0 million and $4.2 million, respectively. Cintas records this tax liability in long-term accrued liabilities on the consolidated balance sheets. 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, 2020 $ 44,670 Additions for tax positions of the current year 4,728 Additions for tax positions of prior years 2,726 Settlements (5,593) Statute expirations (4,074) Balance at May 31, 2021 42,457 Additions for tax positions of the current year 5,558 Additions for tax positions of prior years 3,093 Settlements (7,352) Statute expirations (6,182) Balance at May 31, 2022 $ 37,574 The majority of Cintas' operations are in North America. Cintas is required to file U.S. federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax expense, 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 2018. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2014. Based on the status and resolution of the various audits and other potential regulatory developments, it is expected that the balance of unrecognized tax benefits will not materially change for the fiscal year ending May 31, 2023. Foreign Withholding Tax |
Acquisitions
Acquisitions | 12 Months Ended |
May 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On December 10, 2021, Cintas acquired the remaining interest of an equity method investment. The acquisition will operate as a component of Cintas' supply chain within the Uniform Rental and Facility Services reportable operating segment. The cash consideration transferred to acquire the remaining interest of the equity method investment was $48.0 million, net of cash acquired of $1.7 million. Under applicable accounting guidance, the Company was required to record its historical equity method investment at fair value ($43.5 million), resulting in a gain of $30.2 million, which is recorded as a reduction in selling and administrative expenses, within the Uniform Rental and Facility Services reportable operating segment, in the fiscal year ended May 31, 2022. The fair value of the historical equity method investment was determined using a combination of a market and income approach (discounted cash flow analysis). The key assumptions and estimates utilized in these approaches included market data and market multiples, discount rates, as well as future levels of revenue growth and operating margins. The Company believes these assumptions and estimates are reasonable and based on the best information available at the valuation date. Cintas accounted for the acquisition using the acquisition method of accounting. The preliminary purchase price allocation 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 December 10, 2021. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of the amount of goodwill are based on several strategic supply chain and synergistic benefits that will allow for Cintas to further vertically integrate the operations for certain product lines, and are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes. The allocation of the preliminary purchase price, including the value of the previously held equity method investment, at fair value is as follows: (In thousands) December 10, 2021 Assets Working capital assets $ 17,352 Property and equipment 16,230 Operating lease right-of-use assets 16,882 Goodwill 55,986 Separately identifiable intangible assets 9,201 Liabilities Total current liabilities (6,425) Operating lease liabilities (17,734) Total allocation (consideration) $ 91,492 As additional information is obtained, adjustments may be made to the preliminary purchase price allocation. The Company is still finalizing the estimated fair value of certain of the tangible and identifiable intangible assets acquired and liabilities assumed. The separately identifiable intangible assets are primarily made up of a customer relationship intangible asset that will be amortized over a period of 9 years, which represents the estimated useful life of the economic benefit. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated condensed financial statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including business combinations). The working capital assets and liabilities, as well as the property and equipment acquired, were valued using Level 2 inputs which included data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets (market approach). Goodwill and separately identifiable intangible assets were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flows (income approach). The results of operations of the acquisition are included in Cintas' consolidated statements of income subsequent to the date of acquisition and are not material to the consolidated financial statements. Other Acquisitions The purchase price paid for each acquisition in the fiscal year ended May 31, 2022 has been allocated to the fair value of the assets acquired and liabilities assumed. Excluding the acquisition of the remaining interest in an equity method investment discussed above, during the fiscal year ended May 31, 2022, Cintas acquired three businesses included in the Uniform Rental and Facility Services reportable operating segment, ten businesses included in the First Aid and Safety Services reportable operating segment and seven businesses included in All Other. During the fiscal year ended May 31, 2021, Cintas acquired two business included in the Uniform Rental and Facility Services reportable operating segment, three businesses included in the First Aid and Safety Services reportable operating segment and five businesses included in All Other. The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired during the fiscal year ended May 31: (In thousands) 2022 2021 Fair value of tangible assets acquired $ 37,412 $ 609 Fair value of service contracts acquired 44,738 5,466 Fair value of other intangibles acquired 6,045 552 Fair value of operating lease right-of-use assets, net 16,882 — Net goodwill recognized 144,105 8,352 Total fair value of assets acquired 249,182 14,979 Fair value of liabilities assumed (23,720) (4,941) Fair value of operating lease liabilities (17,734) — Total fair value of liabilities assumed (41,454) (4,941) Total consideration for acquisitions, net of cash acquired $ 207,728 $ 10,038 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Pension Plans In conjunction with the acquisition of G&K in fiscal 2017, Cintas assumed the Pension Plan that covers substantially all legacy 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 sheets reflect the funded status of the Pension Plan. The funded status of the Pension Plan is measured as the difference between the plan assets at fair value and the 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. Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in accumulated other comprehensive income (loss) on our consolidated balance sheets. The difference between actual amounts and estimates based on actuarial assumptions are recognized in other comprehensive income (loss), net of tax, in the period in which they occur. The estimated amortization from accumulated other comprehensive income (loss) into net periodic benefit cost during fiscal year 2023 is not material. Obligations and Funded Status at May 31: (In thousands) 2022 2021 Change in benefit obligation: Projected benefit obligation, beginning of year $ 99,728 $ 105,357 Interest cost 2,148 2,050 Actuarial gain (14,044) (4,460) Benefits paid (3,286) (3,219) Projected benefit obligation, end of year $ 84,546 $ 99,728 Change in plan assets: Fair value of plan assets, beginning of year $ 78,244 $ 68,341 Actual (loss) return on plan assets (8,322) 9,509 Employer contributions 87 3,613 Benefits paid (3,286) (3,219) Fair value of plan assets, end of year $ 66,723 $ 78,244 Funded status-net amount recognized $ (17,823) $ (21,484) The net pension liability of $17.8 million and $21.5 million was included in long-term accrued liabilities on the consolidated balance sheets as of May 31, 2022 and 2021, respectively. An unrecognized net actuarial loss of $2.9 million and $5.0 million related to the Pension Plan was included in "other" within the accumulated other comprehensive income (loss) on the consolidated balance sheets at May 31, 2022 and 2021, respectively. The components of net periodic pension benefit are summarized as follows for the fiscal years ended May 31: (In thousands) 2022 2021 Interest cost $ 2,148 $ 2,050 Expected return on assets (3,651) (2,924) Amortization of net loss — 222 Net periodic pension benefit $ (1,503) $ (652) Assumptions The following weighted average assumptions were used to determine benefit obligations for the Pension Plan for the fiscal years ended May 31: 2022 2021 Discount rate 4.11 % 2.83 % The following weighted average assumptions were used to determine net periodic pension benefit for the Pension Plan for the fiscal years ended May 31: 2022 2021 Discount rate 2.83 % 2.54 % Expected return on plan assets 4.80 % 4.25 % Plan Assets The asset allocations in the Pension Plan are as follows at May 31: 2022 2022 2021 Target Asset Actual Asset Actual Asset Large cap equity 26.0 % 29.1 % 29.8 % Small cap equity 5.0 % 6.2 % 6.0 % International equity 8.0 % 8.2 % 8.3 % Fixed income 45.0 % 43.2 % 44.1 % Absolute return strategy funds 16.0 % 12.7 % 11.3 % Cash — % 0.6 % 0.5 % Total 100.0 % 100.0 % 100.0 % Our investment committee, assisted by outside consultants, evaluates the objectives and investment policies concerning our long-term investment goals and asset allocation strategies. Pension 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 4.80% expected return on Pension Plan assets for fiscal year 2022 and 4.25% expected return on Pension Plan assets for fiscal year 2021. 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. The mutual fund investments are valued at the closing price reported on the active market on which the individual securities are traded and are not adjusted from the quoted active market price at the consolidated balance sheet date. The remaining investments, primarily corporate debt, are valued using unadjusted observable inputs such as third-party quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for the assets or liabilities. 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 consolidated balance sheet date. Information on the Pension Plan assets, using the fair value hierarchy discussed in Note 1 entitled Significant Accounting Polices, is as follows as of May 31: 2022 2021 (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 503 $ — $ — $ 503 $ 556 $ — $ — $ 556 U.S. government 2,839 3,178 — 6,017 3,066 4,500 — 7,566 Corporate debt — 22,681 — 22,681 — 26,762 — 26,762 Mutual funds: U.S. securities 32,016 — — 32,016 36,909 — — 36,909 International securities 5,506 — — 5,506 6,451 — — 6,451 Total $ 40,864 $ 25,859 $ — $ 66,723 $ 46,982 $ 31,262 $ — $ 78,244 We expect to make no contributions to the Pension Plan during the next 12 months. The Pension Plan benefit payments expected to be paid for each of the next five years and thereafter are $4.2 million, $4.4 million, $4.5 million, $4.7 million, $4.8 million and $61.9 million, respectively. Future changes in plan asset returns, assumed discount rates and various other factors related to the Pension Plan will impact future net periodic pension benefit (cost) and liabilities, however, any changes would not have a material impact on our consolidated results of operations and consolidated financial position. Cintas also administers a pension plan that was assumed in a previous acquisition and has historically been deemed immaterial for disclosure purposes. As of May 31, 2022 and 2021, the fair value of this pension plan's total assets was $8.4 million and $9.2 million, respectively, and the PBO was $7.5 million and $8.9 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 $85.0 million, $75.6 million and $74.3 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The expense associated with these contributions was recorded in selling and administrative expenses on the consolidated statements of income. 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 $3.4 million, $3.1 million and $2.6 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The expense associated with these contributions was recorded in selling and administrative expenses on the consolidated statements of income. 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, which approximates cost, were $10.5 million, $9.1 million and $8.4 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The expense associated with these contributions was recorded in selling and administrative expenses on the consolidated statements of income. |
Earnings per Share
Earnings per Share | 12 Months Ended |
May 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. See Note 13 entitled Stock-Based Compensation for additional information on restricted stock awards. The following tables set forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas' common shares for the fiscal years ended May 31: Basic Earnings per Share from Continuing Operations (In thousands except per share data) 2022 2021 2020 Income from continuing operations $ 1,235,757 $ 1,110,968 $ 876,360 Less: income from continuing operations allocated to participating securities 6,132 7,623 8,158 Income from continuing operations available to common shareholders $ 1,229,625 $ 1,103,345 $ 868,202 Basic weighted average common shares outstanding 103,172 104,874 103,816 Basic earnings per share from continuing operations $ 11.92 $ 10.52 $ 8.36 Diluted Earnings per Share from Continuing Operations (In thousands except per share data) 2022 2021 2020 Income from continuing operations $ 1,235,757 $ 1,110,968 $ 876,360 Less: income from continuing operations allocated to participating securities 6,132 7,623 8,158 Income from continuing operations available to common shareholders $ 1,229,625 $ 1,103,345 $ 868,202 Basic weighted average common shares outstanding 103,172 104,874 103,816 Effect of dilutive securities – employee stock options 2,351 2,833 3,196 Diluted weighted average common shares outstanding 105,523 107,707 107,012 Diluted earnings per share from continuing operations $ 11.65 $ 10.24 $ 8.11 Basic and diluted earnings per share from discontinued operations were calculated using the two-class method. There were no discontinued operations for the fiscal years ended May 31, 2022 and 2021. Basic and diluted earnings per share from discontinued operations rounded to $0.00 for the fiscal year ended May 31, 2020. For the fiscal years ended May 31, 2022, 2021 and 2020, options granted to purchase 0.5 million, 0.2 million and 0.2 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 October 30, 2018, we announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the third quarter of fiscal 2021. On October 29, 2019, we announced the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the first quarter of fiscal 2022. On July 27, 2021, we announced that the Board of Directors authorized a new $1.5 billion share buyback program, which does not have an expiration date. The following table summarizes the buyback activity by program and fiscal year ended May 31: 2022 2021 2020 Buyback Program (In thousands except per share data) Shares Average Purchase Shares Average Purchase Shares Average Purchase October 30, 2018 — $ — $ — 190 $ 319.88 $ 60,877 1,607 $ 246.19 $ 395,681 October 29, 2019 1,590 365.41 581,220 1,196 350.31 418,779 — — — July 27, 2021 2,150 383.01 823,429 — — — — — — 3,740 $ 375.53 $ 1,404,649 1,386 $ 346.13 $ 479,656 1,607 $ 246.19 $ 395,681 Shares acquired for taxes due (1) 305 $ 397.16 $ 121,224 246 $ 302.52 $ 74,465 264 $ 260.89 $ 68,837 Total repurchase of $ 1,525,873 $ 554,121 $ 464,518 (1) Shares of Cintas stock acquired for employee payroll taxes due on options exercised and vested restricted stock awards. In addition to the share buyback activity presented above, Cintas acquired shares of Cintas common stock, via non-cash transactions, in connection with net-share settlements of option exercises. During the fiscal year ended May 31, 2022, Cintas acquired 0.1 million shares of Cintas common stock via such non-cash transactions at an average price of $402.73 for a total non-cash value of $28.7 million. In the period subsequent to May 31, 2022, through July 27, 2022, we purchased 0.5 million shares of Cintas common stock at an average price of $396.39 for a total purchase price of $210.8 million. From the inception of the July 27, 2021 share buyback program through July 27, 2022, Cintas has purchased 2.7 million shares of Cintas common stock in the aggregate, at an average price of $385.66 per share, for a total purchase price of $1.0 billion. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
May 31, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [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 representing 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, 2022, 5,966,288 shares of common stock were reserved for future issuance under the 2016 Plan. Total compensation cost for stock-based awards for continuing operations was $109.3 million, $112.0 million and $115.4 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. Cintas accounts for forfeitures of stock-based awards as they occur. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $27.9 million, $28.6 million and $29.2 million for the fiscal years ended May 31, 2022, 2021 and 2020, 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. The majority of stock option grants occur in the first quarter of each fiscal year in connection with the annual grant, which is earned in the prior fiscal year. 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 for the fiscal years ended May 31: 2022 2021 2020 Risk-free interest rate 0.8 % 0.4 % 1.9 % Dividend yield 1.2 % 1.1 % 1.1 % Expected volatility of Cintas' common stock 25.2 % 23.5 % 19.0 % Expected life of the option in years 5.5 5.5 6.0 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 2022, 2021 and 2020 was $84.10, $66.52 and $48.20, 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 Outstanding, June 1, 2019 (1,919,976 shares exercisable) 8,208,934 $ 123.80 Granted 575,813 250.50 Canceled (5,432) 72.17 Forfeited (312,391) 185.08 Exercised (1,361,525) 70.03 Outstanding, May 31, 2020 (1,913,374 shares exercisable) 7,105,399 145.54 Granted 747,550 348.24 Canceled (1,452) 59.51 Forfeited (91,722) 193.94 Exercised (1,704,251) 83.31 Outstanding, May 31, 2021 (1,548,867 shares exercisable) 6,055,524 191.11 Granted 531,963 398.92 Canceled (877) 116.25 Forfeited (260,249) 273.53 Exercised (1,238,959) 118.21 Outstanding, May 31, 2022 (1,575,999 shares exercisable) 5,087,402 $ 230.62 The intrinsic value of stock options exercised was $348.3 million, $402.3 million and $262.1 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The total cash received from employees as a result of employee stock option exercises for the fiscal years ended May 31, 2022, 2021 and 2020 was $117.7 million, $130.0 million and $90.5 million, respectively. The fair value of stock options vested was $36.7 million, $30.5 million and $27.8 million for the fiscal years ended May 31, 2022, 2021 and 2020, respectively. The following table summarizes the information related to stock options outstanding at May 31, 2022: Outstanding Options Exercisable Options Range of Number Average Weighted Number Weighted $28.14 - $108.39 937,222 3.00 $ 84.16 937,222 $ 84.16 $108.40 - $204.48 930,495 5.35 144.96 431,699 140.83 $204.49 - $260.79 1,571,534 6.63 230.68 185,277 208.50 $260.80 - $433.10 1,648,151 9.08 362.20 21,801 297.34 $28.14 - $433.10 5,087,402 6.52 $ 230.62 1,575,999 $ 117.25 At May 31, 2022, the aggregate intrinsic value of stock options outstanding and exercisable was $853.2 million and $443.0 million, respectively. The weighted-average remaining contractual term of stock options exercisable is 4.0 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 Outstanding, unvested grants at June 1, 2019 2,191,688 $ 149.12 Granted 228,292 248.39 Forfeited (135,934) 208.37 Vested (658,831) 113.93 Outstanding, unvested grants at May 31, 2020 1,625,215 199.73 Granted 274,843 352.68 Forfeited (48,586) 241.95 Vested (610,249) 147.32 Outstanding, unvested grants at May 31, 2021 1,241,223 264.63 Granted 189,874 398.30 Forfeited (66,589) 323.00 Vested (527,899) 213.36 Outstanding, unvested grants at May 31, 2022 836,609 $ 331.95 The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2022 was $221.8 million. The weighted-average period of time over which this cost will be recognized is 2.12 years. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
May 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Unrealized Other Total Balance at June 1, 2020 $ (26,343) $ (112,718) $ (14,319) $ (153,380) Other comprehensive income before reclassifications 68,182 106,843 10,676 185,701 Amounts reclassified from accumulated other — (1,433) — (1,433) Net current period other comprehensive income 68,182 105,410 10,676 184,268 Balance at May 31, 2021 41,839 (7,308) (3,643) 30,888 Other comprehensive (loss) income before (24,833) 102,057 1,866 79,090 Amounts reclassified from accumulated other — (2,061) — (2,061) Net current period other comprehensive (loss) income (24,833) 99,996 1,866 77,029 Balance at May 31, 2022 $ 17,006 $ 92,688 $ (1,777) $ 107,917 The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) during the fiscal years ended May 31: Details about Accumulated Amount Reclassified from Affected Line in the (In thousands) 2022 2021 Amortization of interest rate locks $ 2,733 $ 1,896 Interest expense Tax expense (672) (463) Income taxes Amortization of interest rate locks, $ 2,061 $ 1,433 |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
May 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segment Information | Operating Segment Information Cintas’ reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment, consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies, and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ operating segments, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled Significant Accounting Policies. Information related to the operations of Cintas' reportable operating segments and All Other is set forth below: (In thousands) Uniform Rental First Aid All Other Corporate (1) Total May 31, 2022 Revenue $ 6,226,980 $ 832,458 $ 795,021 $ — $ 7,854,459 Gross margin $ 2,910,547 $ 372,193 $ 349,506 $ — $ 3,632,246 Selling and administrative expenses 1,557,057 265,430 222,389 — 2,044,876 Interest expense, net — — — 88,602 88,602 Income before income taxes $ 1,353,490 $ 106,763 $ 127,117 $ (88,602) $ 1,498,768 Depreciation and amortization $ 329,473 $ 48,656 $ 21,572 $ — $ 399,701 Capital expenditures $ 166,559 $ 59,656 $ 14,457 $ — $ 240,672 Total assets $ 6,979,731 $ 664,040 $ 413,014 $ 90,471 $ 8,147,256 May 31, 2021 Revenue $ 5,689,632 $ 784,291 $ 642,417 $ — $ 7,116,340 Gross margin $ 2,706,118 $ 332,336 $ 276,197 $ — $ 3,314,651 Selling and administrative expenses 1,480,278 251,153 197,728 — 1,929,159 Interest expense, net — — — 97,743 97,743 Income before income taxes $ 1,225,840 $ 81,183 $ 78,469 $ (97,743) $ 1,287,749 Depreciation and amortization $ 323,596 $ 43,314 $ 21,041 $ — $ 387,951 Capital expenditures $ 104,020 $ 34,384 $ 5,066 $ — $ 143,470 Total assets $ 6,743,272 $ 637,663 $ 362,248 $ 493,640 $ 8,236,823 May 31, 2020 Revenue $ 5,643,494 $ 708,569 $ 733,057 $ — $ 7,085,120 Gross margin $ 2,588,349 $ 338,661 $ 306,738 $ — $ 3,233,748 Selling and administrative expenses 1,583,791 231,769 255,492 — 2,071,052 Interest expense, net — — — 104,405 104,405 Income before income taxes $ 1,004,558 $ 106,892 $ 51,246 $ (104,405) $ 1,058,291 Depreciation and amortization $ 317,699 $ 38,516 $ 22,838 $ — $ 379,053 Capital expenditures $ 183,364 $ 35,678 $ 11,247 $ — $ 230,289 Total assets $ 6,531,673 $ 611,205 $ 381,605 $ 145,402 $ 7,669,885 (1) Corporate assets represent the consolidated cash balance in all periods presented. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
May 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts and Reserves | Schedule II — Valuation and Qualifying Accounts and Reserves (In thousands) Balance at Additions (1) Deductions (2)(3) Balance at Allowance for Doubtful Accounts May 31, 2020 $ 11,343 $ 40,521 $ 16,431 $ 35,433 May 31, 2021 $ 35,433 $ 27,517 $ 50,853 $ 12,097 May 31, 2022 $ 12,097 $ 30,278 $ 29,457 $ 12,918 (1) Represents amounts charged to expense to increase reserve for estimated future bad debts. (2) Represents reductions in the consolidated balance sheet reserve due to the actual write-off of non-collectible accounts receivable. These amounts do not impact Cintas' consolidated statements of income. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2022 | |
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. generally accepted accounting principles (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 may 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 or the performance obligation under the terms of a contract with a customer are satisfied. 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 the performance obligation under the terms of a contract with a customer are satisfied. Revenue is measured as the amount of consideration we expect to receive in exchange for the performance of the service or transfer of the inventory.Revenue from our route servicing customer contracts represent a single-performance obligation. The Company recognizes revenue over time as services are performed based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business. The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer. Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the fiscal years ended May 31, 2022, 2021 or 2020. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). These assets are included in other current assets and in other assets, net on the consolidated balance sheets. We are exposed to credit losses primarily through our trade receivables. We determine the allowance for credit losses using both an estimate, based on historical rates of collections and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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 operating segment. We update our estimate of credit loss reserves quarterly, considering recent write-offs and collections information and underlying economic expectations. Costs to Obtain a Contract |
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, service 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 and capitalized contract costs. As a result of the adverse impact that the COVID-19 pandemic, |
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. |
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 includes both an estimate, based on historical rates of collections, and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform 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, net | Inventories are valued at the lower of cost (first-in, first-out) or net realizable value.The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. The disruption created by the COVID-19 pandemic beginning in the fourth quarter of fiscal 2020 resulted in larger quantities of inventory on hand as of May 31, 2022 and 2021. As of May 31, 2022 and 2021, our Uniform Rental and Facility Services and First Aid and Safety reportable operating segments held an excess amount of personal protective equipment inventory on hand. The excess inventory, determined through specific identification, resulted in a specific reserve of $28.5 million and $43.6 million as of May 31, 2022 and 2021, respectively. Obsolete inventory reserves are recorded in selling and administrative expenses on the consolidated statements of income. The judgment applied to record the obsolete inventory reserve as of May 31, 2022 and 2021, beyond our historical policy was deemed to be reasonable and supportable based on the data available as of the consolidated balance sheet dates. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up. |
Uniforms and other rental items in service | These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory and related cost of uniforms and 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: Years Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 |
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. In fiscal 2020, as a result of certain activities to eliminate excess capacity and reduce our cost structure in response to the onset of the COVID-19 pandemic, an indicator of impairment was identified. Cintas recognized an impairment loss of $9.2 million in the Uniform Rental and Facility Services reportable operating segment during the year ended May 31, 2020. Based on its regular evaluation and the evolving impact of the COVID-19 pandemic, Cintas recognized a long-lived asset impairment loss of $5.1 million in the Uniform Direct Sale operating segment during the year ended May 31, 2021. The long-lived asset impairments in fiscal 2021 and 2020 were based on the excess of the carrying amount of asset over their respective fair values and were recorded within selling and administrative expenses on the consolidated statements of income. The undiscounted cash flows were estimated, using Level 2 inputs based on both the cost and market approaches, at the lowest discernible level of cash flows, which is at the location level. Cintas did not identify any indicators of impairment for the fiscal year ended May 31, 2022. |
Goodwill | Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment test, that includes an assessment of quantitative and qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions and entity specific factors such as strategies and financial performance. We test for goodwill impairment at the reporting unit level. Cintas has identified four reporting units for purposes of evaluating goodwill impairment: Uniform Rental and Facility Services, First Aid and Safety Services and two reporting units within All Other. 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, 2022, 2021 or 2020. 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 capitalized contract costs and noncompete and consulting agreements obtained through acquisitions of businesses, are generally amortized by use of the straight-line method, or an accelerated method that represents the estimated economic benefit, over the estimated lives of the agreements, which are generally 5 to 15 years. Certain noncompete agreements, as well as all service contracts, require that a valuation be determined using a discounted cash flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. |
Business Acquisitions | The Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at the acquisition date. The excess of the acquisition price over the estimated fair value of the net assets acquired is recorded as goodwill. Goodwill is adjusted for any changes to acquisition date fair value amounts made within the measurement period. Acquisition-related transaction costs are recognized separately from the business combinations and expensed as incurred. |
Debt issuance costs | Debt issuance costs for the revolving credit facility are included in other assets, net and all other debt issuance costs reduce the carrying amount of 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. Long-term accrued liabilities consist primarily of retirement obligations, which are described in more detail in Note 11 entitled Employee Benefit Plans, interest rate lock agreements, which are described in more detail in Note 7 entitled Debt and Derivatives, reserves associated with unrecognized tax benefits, which are described in more detail in Note 9 entitled Income Taxes and environmental obligations, which are further described below. |
Insurance reserve | The insurance reserve represents 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 incurred but not reported reserve is estimated through actuarial procedures, with the assistance of third-party actuarial specialists, 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. |
Environmental obligations | Environmental obligations, including obligations obtained through past business acquisitions, are recorded when it is probable that obligations have been incurred and the costs can be reasonably estimated. Cintas’ environmental obligations are estimated based on an evaluation of various factors, including currently available facts, existing technology, presently enacted laws and regulations, and remediation experience. Where the available information is sufficient to estimate the amount of the obligation, that estimate has been recorded. Where the information is only sufficient to establish a range of probable liability and no point within the range is more likely than any other, the lower end of the range has been used. Management actively monitors all locations for compliance and changes in facts and circumstances. No one location or site is deemed to be material or in violation of the applicable laws and regulations, even though costs are being incurred. Costs estimated for environmental obligations are not discounted to their present value. |
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 ten percent of the larger of the projected benefit obligations or the plan assets, defined as the "corridor." Amounts outside the corridor are amortized over the plan participants' life expectancy. We determine the expected return on assets using the fair value of plan assets. See Note 11 |
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. Generally, 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. See Note 13 entitled Stock-Based Compensation. |
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 (loss) in shareholders' equity and subsequently recognized in net income when the hedged item affects net income. |
Income taxes | The provision for income taxes includes taxes paid, currently payable or receivable and those deferred. 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. Cintas accounts for Global Intangible Low-Taxed Income (GILTI) as a current-period expense when incurred. Therefore, the Company has not recorded deferred taxes for basis differences expected to reverse in future periods. See Note 9 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. The Company, the Board of Directors, Scott Farmer (Executive Chairman) and the Investment Policy Committee are defendants in a purported class action, filed on December 13, 2019, pending in the U.S. District Court for the Southern District of Ohio alleging violations of The Employee Retirement Income Security Act of 1974 (ERISA). The lawsuit asserts that the defendants improperly managed the costs of the employee retirement plan, breached their fiduciary duties in failing to investigate and select lower cost alternative funds and failed to monitor and control the employee retirement plan’s recordkeeping costs. The defendants deny liability and a legal contingency is neither probable or estimable at May 31, 2022 or 2021. |
Fair value measurements | Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements (ASC 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, 2022 or 2021. 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 revalued in an impairment analysis and to assets and liabilities acquired in a business acquisition unless otherwise noted in Note 3 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). 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. See Note 10 |
New accounting pronouncements | In December 2019, the FASB issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes (ASC 740), in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on June 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements currently but may in future periods. 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 Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2022 | |
Accounting Policies [Abstract] | |
Inventory | Inventory is comprised of the following amounts at May 31: (In thousands) 2022 2021 Raw materials $ 19,071 $ 15,109 Work in process 34,280 37,664 Finished goods 418,799 429,024 $ 472,150 $ 481,797 |
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: Years Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 Cintas' property and equipment is summarized as follows at May 31: (In thousands) 2022 2021 Land $ 191,878 $ 190,711 Buildings and improvements 699,430 698,094 Equipment 2,548,796 2,409,785 Leasehold improvements 43,426 38,320 Construction in progress 52,062 36,749 3,535,592 3,373,659 Accumulated depreciation (2,211,919) (2,055,221) Property and equipment, net $ 1,323,673 $ 1,318,438 |
Current Accrued Liabilities | Current accrued liabilities consist of the following at May 31: (In thousands) 2022 2021 Insurance reserve 163,958 $ 156,447 Employee benefit related liabilities 146,237 129,348 Dividends 97,525 79,135 Accrued interest 15,448 24,420 Other 165,780 129,560 $ 588,948 $ 518,910 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
May 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following table presents Cintas' total revenue disaggregated by operating segment for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Uniform Rental and Facility $ 6,226,980 79.3 % $ 5,689,632 80.0 % $ 5,643,494 79.6 % First Aid and Safety Services 832,458 10.6 % 784,291 11.0 % 708,569 10.0 % Fire Protection Services 527,517 6.7 % 446,441 6.3 % 422,688 6.0 % Uniform Direct Sales 267,504 3.4 % 195,976 2.7 % 310,369 4.4 % Total revenue $ 7,854,459 100.0 % $ 7,116,340 100.0 % $ 7,085,120 100.0 % |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
May 31, 2022 | |
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, 2022 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 90,471 $ — $ — $ 90,471 Other assets, net: Interest rate lock agreements — 56,877 — 56,877 Total assets at fair value $ 90,471 $ 56,877 $ — $ 147,348 As of May 31, 2021 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 493,640 $ — $ — $ 493,640 Other assets, net: Interest rate lock agreements — 40,400 — 40,400 Total assets at fair value $ 493,640 $ 40,400 $ — $ 534,040 Long-term accrued liabilities: Interest rate lock agreements $ — $ 61,567 $ — $ 61,567 Total liabilities at fair value $ — $ 61,567 $ — $ 61,567 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
May 31, 2022 | |
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: Years Buildings 30 to 40 Building improvements 5 to 20 Equipment 3 to 10 Leasehold improvements 2 to 15 Cintas' property and equipment is summarized as follows at May 31: (In thousands) 2022 2021 Land $ 191,878 $ 190,711 Buildings and improvements 699,430 698,094 Equipment 2,548,796 2,409,785 Leasehold improvements 43,426 38,320 Construction in progress 52,062 36,749 3,535,592 3,373,659 Accumulated depreciation (2,211,919) (2,055,221) Property and equipment, net $ 1,323,673 $ 1,318,438 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
May 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investments | Cintas' investments are summarized as follows at May 31: (In thousands) 2022 2021 Cash surrender value of insurance policies $ 237,136 $ 252,061 Equity method investments 3,574 19,388 Cost method investments 2,163 3,167 Total investments $ 242,873 $ 274,616 |
Goodwill, Service Contracts a_2
Goodwill, Service Contracts and Other Assets (Tables) | 12 Months Ended |
May 31, 2022 | |
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 presented in the following tables: Goodwill (In thousands) Uniform Rental First Aid All Total Balance at June 1, 2020 $ 2,513,041 $ 243,266 $ 113,713 $ 2,870,020 Goodwill acquired 1,568 2,545 3,161 7,274 Foreign currency translation 32,901 2,760 114 35,775 Balance at May 31, 2021 2,547,510 248,571 116,988 2,913,069 Goodwill acquired 99,826 38,281 5,162 143,269 Foreign currency translation (12,237) (1,083) (42) (13,362) Balance at May 31, 2022 $ 2,635,099 $ 285,769 $ 122,108 $ 3,042,976 |
Changes in Carrying Amount of Service Contracts by Operating Segment | Service Contracts (In thousands) Uniform Rental First Aid All Total Balance at June 1, 2020 $ 407,611 $ 19,805 $ 24,113 $ 451,529 Service contracts acquired 2,369 2,132 1,736 6,237 Service contracts amortization (49,016) (3,912) (4,839) (57,767) Foreign currency translation 8,177 269 — 8,446 Balance at May 31, 2021 369,141 18,294 21,010 408,445 Service contracts acquired 32,695 10,384 1,659 44,738 Service contracts amortization (49,152) (4,392) (4,809) (58,353) Foreign currency translation (3,050) (142) — (3,192) Balance at May 31, 2022 $ 349,634 $ 24,144 $ 17,860 $ 391,638 |
Information Regarding Service Contracts and Other Assets | Information regarding Cintas' service contracts and other assets is as follows as of May 31: 2022 2021 (In thousands) Carrying Accumulated Net Carrying Accumulated Net Service contracts $ 1,001,311 $ 609,673 $ 391,638 $ 961,942 $ 553,497 $ 408,445 Capitalized contract costs (1) $ 551,582 $ 319,358 $ 232,224 $ 459,079 $ 231,940 $ 227,139 Noncompete and consulting 50,637 43,775 6,862 44,683 42,408 2,275 Other 125,941 20,917 105,024 105,371 24,371 81,000 Other assets $ 728,160 $ 384,050 $ 344,110 $ 609,133 $ 298,719 $ 310,414 |
Finite-lived Intangible Assets Amortization Expense | As of May 31, 2022, the estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, is as follows: Fiscal Year (In thousands) 2023 $ 139,037 2024 126,603 2025 112,032 2026 93,662 2027 75,033 Thereafter 172,245 Total future amortization expense $ 718,612 |
Debt and Derivatives (Tables)
Debt and Derivatives (Tables) | 12 Months Ended |
May 31, 2022 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | Cintas' outstanding debt is summarized as follows at May 31: (In thousands) Interest Fiscal Year Fiscal Year 2022 2021 Debt due within one year Commercial paper 1.20 % (1) 2022 2023 $ 261,200 $ — Senior notes (2) 2.78 % 2013 2023 50,380 — Senior notes 4.30 % 2012 2022 — 250,000 Senior notes 2.90 % 2017 2022 — 650,000 Debt issuance costs (6) (930) Total debt due within one year $ 311,574 $ 899,070 Debt due after one year Senior notes 3.25 % 2013 2023 $ — $ 300,000 Senior notes (2) 2.78 % 2013 2023 — 50,815 Senior notes (3) 3.11 % 2015 2025 50,965 51,301 Senior notes 3.45 % 2022 2025 400,000 — Senior notes 3.70 % 2017 2027 1,000,000 1,000,000 Senior notes 4.00 % 2022 2032 800,000 — Senior notes 6.15 % 2007 2037 250,000 250,000 Debt issuance costs (17,033) (9,283) Total debt due after one year $ 2,483,932 $ 1,642,833 (1) Variable rate debt instrument. The rate presented is the variable rate at May 31, 2022. (2) Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%. |
Schedule of Interest Rate Lock Agreements | The fair values of the outstanding interest rate locks, for forecasted debt issuances, are summarized as follows at May 31: 2022 2021 Fiscal Year of Issuance (in thousands) Other Other Long-term 2022 $ 18,331 $ — $ — 2020 $ 38,546 $ 40,400 $ — 2019 $ — $ — $ 61,657 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
May 31, 2022 | |
Leases [Abstract] | |
Operating Lease Cost and Additional Lease Information | The following table provides supplemental information related to the Company's consolidated statements of cash flows for the fiscal years ended May 31: (In thousands) 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 49,579 $ 49,345 Operating lease right-of-use assets obtained in exchange for new and renewed $ 26,862 $ 51,850 Operating lease right-of-use assets acquired in business combinations $ 17,734 $ — Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows at May 31: 2022 2021 Weighted-average remaining lease term - operating leases 5.40 years 5.33 years Weighted-average discount rate - operating leases 2.20% 2.32% |
Contractual Future Minimum Lease Payments of Operating Lease Liabilities | The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of May 31, 2022: (In thousands) 2023 $ 47,099 2024 37,499 2025 29,147 2026 22,673 2027 15,701 Thereafter 31,498 Total payments 183,617 Less interest (10,681) Total present value of lease payments $ 172,936 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Components of Income Before Income Taxes | Income before income taxes for continuing operations consists of the following components for the fiscal years ended May 31: (In thousands) 2022 2021 2020 U.S. operations $ 1,445,719 $ 1,221,690 $ 1,035,902 Foreign operations 53,049 66,059 22,389 $ 1,498,768 $ 1,287,749 $ 1,058,291 |
Components of Income Taxes | Income tax expense (benefit) for continuing operations consists of the following components for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Current: Federal $ 162,269 $ 164,104 $ 153,736 State and local 32,431 42,340 34,502 Foreign 16,676 12,417 6,985 211,376 218,861 195,223 Deferred 51,635 (42,080) (13,292) $ 263,011 $ 176,781 $ 181,931 |
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 for the fiscal years ended May 31: (In thousands) 2022 2021 2020 Income taxes at the U.S. federal statutory rate $ 314,741 $ 270,427 $ 222,258 Permanent differences (1) (85,413) (101,870) (67,075) State and local income taxes, net of federal benefit 33,547 27,304 25,294 Capital loss carryback — (14,072) — Other 136 (5,008) 1,454 $ 263,011 $ 176,781 $ 181,931 |
Components of Deferred Income Taxes | The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31: (In thousands) 2022 2021 Deferred tax assets: Reserves related to accounts receivable $ 10,928 $ 10,292 Inventory obsolescence 28,020 30,617 Insurance reserves 45,237 45,802 Stock-based compensation 62,522 74,898 Operating lease liabilities 43,745 44,530 Deferred compensation and other 92,250 114,553 282,702 320,692 Valuation allowance — (2,037) 282,702 318,655 Deferred tax liabilities: Uniform and other rental items in service 226,510 202,846 Property and equipment 171,819 167,622 Service contracts and other intangible assets 199,256 207,834 Treasury locks 31,566 — Capitalized contract costs 81,314 79,356 Operating lease right-of-use assets 43,745 44,530 State taxes and other 2,269 3,114 756,479 705,302 Net deferred tax liability $ 473,777 $ 386,647 |
Summary of Valuation Allowance | The progression of the valuation allowance is as follows at May 31: (In thousands) 2022 2021 Balance at beginning of year $ (2,037) $ (6,411) Subtractions 2,037 4,374 Balance at end of year $ — $ (2,037) |
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, 2020 $ 44,670 Additions for tax positions of the current year 4,728 Additions for tax positions of prior years 2,726 Settlements (5,593) Statute expirations (4,074) Balance at May 31, 2021 42,457 Additions for tax positions of the current year 5,558 Additions for tax positions of prior years 3,093 Settlements (7,352) Statute expirations (6,182) Balance at May 31, 2022 $ 37,574 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
May 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Aggregate Purchase Price and Fair Value Allocations for Businesses Acquired | The allocation of the preliminary purchase price, including the value of the previously held equity method investment, at fair value is as follows: (In thousands) December 10, 2021 Assets Working capital assets $ 17,352 Property and equipment 16,230 Operating lease right-of-use assets 16,882 Goodwill 55,986 Separately identifiable intangible assets 9,201 Liabilities Total current liabilities (6,425) Operating lease liabilities (17,734) Total allocation (consideration) $ 91,492 The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired during the fiscal year ended May 31: (In thousands) 2022 2021 Fair value of tangible assets acquired $ 37,412 $ 609 Fair value of service contracts acquired 44,738 5,466 Fair value of other intangibles acquired 6,045 552 Fair value of operating lease right-of-use assets, net 16,882 — Net goodwill recognized 144,105 8,352 Total fair value of assets acquired 249,182 14,979 Fair value of liabilities assumed (23,720) (4,941) Fair value of operating lease liabilities (17,734) — Total fair value of liabilities assumed (41,454) (4,941) Total consideration for acquisitions, net of cash acquired $ 207,728 $ 10,038 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
May 31, 2022 | |
Retirement Benefits [Abstract] | |
Obligations and Funded Status | Obligations and Funded Status at May 31: (In thousands) 2022 2021 Change in benefit obligation: Projected benefit obligation, beginning of year $ 99,728 $ 105,357 Interest cost 2,148 2,050 Actuarial gain (14,044) (4,460) Benefits paid (3,286) (3,219) Projected benefit obligation, end of year $ 84,546 $ 99,728 Change in plan assets: Fair value of plan assets, beginning of year $ 78,244 $ 68,341 Actual (loss) return on plan assets (8,322) 9,509 Employer contributions 87 3,613 Benefits paid (3,286) (3,219) Fair value of plan assets, end of year $ 66,723 $ 78,244 Funded status-net amount recognized $ (17,823) $ (21,484) |
Components of Net Periodic Pension (Benefit) Cost | The components of net periodic pension benefit are summarized as follows for the fiscal years ended May 31: (In thousands) 2022 2021 Interest cost $ 2,148 $ 2,050 Expected return on assets (3,651) (2,924) Amortization of net loss — 222 Net periodic pension benefit $ (1,503) $ (652) |
Weighted Average Assumptions Used to Determine Benefit Obligations | The following weighted average assumptions were used to determine benefit obligations for the Pension Plan for the fiscal years ended May 31: 2022 2021 Discount rate 4.11 % 2.83 % The following weighted average assumptions were used to determine net periodic pension benefit for the Pension Plan for the fiscal years ended May 31: 2022 2021 Discount rate 2.83 % 2.54 % Expected return on plan assets 4.80 % 4.25 % |
Asset Allocations in the Pension Plan | The asset allocations in the Pension Plan are as follows at May 31: 2022 2022 2021 Target Asset Actual Asset Actual Asset Large cap equity 26.0 % 29.1 % 29.8 % Small cap equity 5.0 % 6.2 % 6.0 % International equity 8.0 % 8.2 % 8.3 % Fixed income 45.0 % 43.2 % 44.1 % Absolute return strategy funds 16.0 % 12.7 % 11.3 % Cash — % 0.6 % 0.5 % Total 100.0 % 100.0 % 100.0 % Information on the Pension Plan assets, using the fair value hierarchy discussed in Note 1 entitled Significant Accounting Polices, is as follows as of May 31: 2022 2021 (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 503 $ — $ — $ 503 $ 556 $ — $ — $ 556 U.S. government 2,839 3,178 — 6,017 3,066 4,500 — 7,566 Corporate debt — 22,681 — 22,681 — 26,762 — 26,762 Mutual funds: U.S. securities 32,016 — — 32,016 36,909 — — 36,909 International securities 5,506 — — 5,506 6,451 — — 6,451 Total $ 40,864 $ 25,859 $ — $ 66,723 $ 46,982 $ 31,262 $ — $ 78,244 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
May 31, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share For Continuing Operations | The following tables set forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas' common shares for the fiscal years ended May 31: Basic Earnings per Share from Continuing Operations (In thousands except per share data) 2022 2021 2020 Income from continuing operations $ 1,235,757 $ 1,110,968 $ 876,360 Less: income from continuing operations allocated to participating securities 6,132 7,623 8,158 Income from continuing operations available to common shareholders $ 1,229,625 $ 1,103,345 $ 868,202 Basic weighted average common shares outstanding 103,172 104,874 103,816 Basic earnings per share from continuing operations $ 11.92 $ 10.52 $ 8.36 Diluted Earnings per Share from Continuing Operations (In thousands except per share data) 2022 2021 2020 Income from continuing operations $ 1,235,757 $ 1,110,968 $ 876,360 Less: income from continuing operations allocated to participating securities 6,132 7,623 8,158 Income from continuing operations available to common shareholders $ 1,229,625 $ 1,103,345 $ 868,202 Basic weighted average common shares outstanding 103,172 104,874 103,816 Effect of dilutive securities – employee stock options 2,351 2,833 3,196 Diluted weighted average common shares outstanding 105,523 107,707 107,012 Diluted earnings per share from continuing operations $ 11.65 $ 10.24 $ 8.11 |
Summary of Buyback Activity by Program | The following table summarizes the buyback activity by program and fiscal year ended May 31: 2022 2021 2020 Buyback Program (In thousands except per share data) Shares Average Purchase Shares Average Purchase Shares Average Purchase October 30, 2018 — $ — $ — 190 $ 319.88 $ 60,877 1,607 $ 246.19 $ 395,681 October 29, 2019 1,590 365.41 581,220 1,196 350.31 418,779 — — — July 27, 2021 2,150 383.01 823,429 — — — — — — 3,740 $ 375.53 $ 1,404,649 1,386 $ 346.13 $ 479,656 1,607 $ 246.19 $ 395,681 Shares acquired for taxes due (1) 305 $ 397.16 $ 121,224 246 $ 302.52 $ 74,465 264 $ 260.89 $ 68,837 Total repurchase of $ 1,525,873 $ 554,121 $ 464,518 (1) Shares of Cintas stock acquired for employee payroll taxes due on options exercised and vested restricted stock awards. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
May 31, 2022 | |
Share-Based Payment Arrangement, Noncash Expense [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 for the fiscal years ended May 31: 2022 2021 2020 Risk-free interest rate 0.8 % 0.4 % 1.9 % Dividend yield 1.2 % 1.1 % 1.1 % Expected volatility of Cintas' common stock 25.2 % 23.5 % 19.0 % Expected life of the option in years 5.5 5.5 6.0 |
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 Outstanding, June 1, 2019 (1,919,976 shares exercisable) 8,208,934 $ 123.80 Granted 575,813 250.50 Canceled (5,432) 72.17 Forfeited (312,391) 185.08 Exercised (1,361,525) 70.03 Outstanding, May 31, 2020 (1,913,374 shares exercisable) 7,105,399 145.54 Granted 747,550 348.24 Canceled (1,452) 59.51 Forfeited (91,722) 193.94 Exercised (1,704,251) 83.31 Outstanding, May 31, 2021 (1,548,867 shares exercisable) 6,055,524 191.11 Granted 531,963 398.92 Canceled (877) 116.25 Forfeited (260,249) 273.53 Exercised (1,238,959) 118.21 Outstanding, May 31, 2022 (1,575,999 shares exercisable) 5,087,402 $ 230.62 |
Summary of Information Related to Stock Options Outstanding | The following table summarizes the information related to stock options outstanding at May 31, 2022: Outstanding Options Exercisable Options Range of Number Average Weighted Number Weighted $28.14 - $108.39 937,222 3.00 $ 84.16 937,222 $ 84.16 $108.40 - $204.48 930,495 5.35 144.96 431,699 140.83 $204.49 - $260.79 1,571,534 6.63 230.68 185,277 208.50 $260.80 - $433.10 1,648,151 9.08 362.20 21,801 297.34 $28.14 - $433.10 5,087,402 6.52 $ 230.62 1,575,999 $ 117.25 |
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 Outstanding, unvested grants at June 1, 2019 2,191,688 $ 149.12 Granted 228,292 248.39 Forfeited (135,934) 208.37 Vested (658,831) 113.93 Outstanding, unvested grants at May 31, 2020 1,625,215 199.73 Granted 274,843 352.68 Forfeited (48,586) 241.95 Vested (610,249) 147.32 Outstanding, unvested grants at May 31, 2021 1,241,223 264.63 Granted 189,874 398.30 Forfeited (66,589) 323.00 Vested (527,899) 213.36 Outstanding, unvested grants at May 31, 2022 836,609 $ 331.95 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
May 31, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Unrealized Other Total Balance at June 1, 2020 $ (26,343) $ (112,718) $ (14,319) $ (153,380) Other comprehensive income before reclassifications 68,182 106,843 10,676 185,701 Amounts reclassified from accumulated other — (1,433) — (1,433) Net current period other comprehensive income 68,182 105,410 10,676 184,268 Balance at May 31, 2021 41,839 (7,308) (3,643) 30,888 Other comprehensive (loss) income before (24,833) 102,057 1,866 79,090 Amounts reclassified from accumulated other — (2,061) — (2,061) Net current period other comprehensive (loss) income (24,833) 99,996 1,866 77,029 Balance at May 31, 2022 $ 17,006 $ 92,688 $ (1,777) $ 107,917 |
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: Details about Accumulated Amount Reclassified from Affected Line in the (In thousands) 2022 2021 Amortization of interest rate locks $ 2,733 $ 1,896 Interest expense Tax expense (672) (463) Income taxes Amortization of interest rate locks, $ 2,061 $ 1,433 |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
May 31, 2022 | |
Segment Reporting [Abstract] | |
Information Related to Operating Segments | Information related to the operations of Cintas' reportable operating segments and All Other is set forth below: (In thousands) Uniform Rental First Aid All Other Corporate (1) Total May 31, 2022 Revenue $ 6,226,980 $ 832,458 $ 795,021 $ — $ 7,854,459 Gross margin $ 2,910,547 $ 372,193 $ 349,506 $ — $ 3,632,246 Selling and administrative expenses 1,557,057 265,430 222,389 — 2,044,876 Interest expense, net — — — 88,602 88,602 Income before income taxes $ 1,353,490 $ 106,763 $ 127,117 $ (88,602) $ 1,498,768 Depreciation and amortization $ 329,473 $ 48,656 $ 21,572 $ — $ 399,701 Capital expenditures $ 166,559 $ 59,656 $ 14,457 $ — $ 240,672 Total assets $ 6,979,731 $ 664,040 $ 413,014 $ 90,471 $ 8,147,256 May 31, 2021 Revenue $ 5,689,632 $ 784,291 $ 642,417 $ — $ 7,116,340 Gross margin $ 2,706,118 $ 332,336 $ 276,197 $ — $ 3,314,651 Selling and administrative expenses 1,480,278 251,153 197,728 — 1,929,159 Interest expense, net — — — 97,743 97,743 Income before income taxes $ 1,225,840 $ 81,183 $ 78,469 $ (97,743) $ 1,287,749 Depreciation and amortization $ 323,596 $ 43,314 $ 21,041 $ — $ 387,951 Capital expenditures $ 104,020 $ 34,384 $ 5,066 $ — $ 143,470 Total assets $ 6,743,272 $ 637,663 $ 362,248 $ 493,640 $ 8,236,823 May 31, 2020 Revenue $ 5,643,494 $ 708,569 $ 733,057 $ — $ 7,085,120 Gross margin $ 2,588,349 $ 338,661 $ 306,738 $ — $ 3,233,748 Selling and administrative expenses 1,583,791 231,769 255,492 — 2,071,052 Interest expense, net — — — 104,405 104,405 Income before income taxes $ 1,004,558 $ 106,892 $ 51,246 $ (104,405) $ 1,058,291 Depreciation and amortization $ 317,699 $ 38,516 $ 22,838 $ — $ 379,053 Capital expenditures $ 183,364 $ 35,678 $ 11,247 $ — $ 230,289 Total assets $ 6,531,673 $ 611,205 $ 381,605 $ 145,402 $ 7,669,885 (1) Corporate assets represent the consolidated cash balance in all periods presented. |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) business in Millions | 12 Months Ended | ||
May 31, 2022 USD ($) reportingUnit business | May 31, 2021 USD ($) | May 31, 2020 USD ($) | |
Accounting Policies [Line Items] | |||
Number of businesses helped | business | 1 | ||
Restricted cash | $ 31,800,000 | $ 31,800,000 | |
Inventory obsolescence reserve | 100,300,000 | 111,000,000 | |
Inventory write-down | 28,500,000 | 43,600,000 | |
Long-lived asset impairment | $ 0 | 5,114,000 | $ 9,220,000 |
Number of reporting units | reportingUnit | 4 | ||
Impairment of intangible assets | $ 0 | 0 | 0 |
2020 restructuring plan | |||
Accounting Policies [Line Items] | |||
Employee termination expense | $ 0 | 0 | 24,500,000 |
2020 restructuring plan | Employee termination benefits | |||
Accounting Policies [Line Items] | |||
Payments for restructuring | $ 10,200,000 | 14,300,000 | |
Uniforms in service | |||
Accounting Policies [Line Items] | |||
Inventories useful life, maximum | 18 months | ||
Other rental items | |||
Accounting Policies [Line Items] | |||
Inventories useful life, maximum | 60 months | ||
Inventories useful life, minimum | 8 months | ||
Minimum | Service contracts and other assets | |||
Accounting Policies [Line Items] | |||
Service contracts and other assets useful lives | 5 years | ||
Maximum | Service contracts and other assets | |||
Accounting Policies [Line Items] | |||
Service contracts and other assets useful lives | 15 years | ||
Uniform rental and facility services | 2020 restructuring plan | |||
Accounting Policies [Line Items] | |||
Employee termination expense | $ 20,200,000 | ||
All Other | |||
Accounting Policies [Line Items] | |||
Number of reporting units | reportingUnit | 2 |
Significant Accounting Polici_5
Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Accounting Policies [Abstract] | ||
Raw materials | $ 19,071 | $ 15,109 |
Work in process | 34,280 | 37,664 |
Finished goods | 418,799 | 429,024 |
Inventories, net | $ 472,150 | $ 481,797 |
Significant Accounting Polici_6
Significant Accounting Policies - Estimated Useful Lives (Details) | 12 Months Ended |
May 31, 2022 | |
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 Polici_7
Significant Accounting Policies - Accrued Liabilities (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Accounting Policies [Abstract] | ||
Insurance reserve | $ 163,958 | $ 156,447 |
Employee benefit related liabilities | 146,237 | 129,348 |
Dividends | 97,525 | 79,135 |
Accrued interest | 15,448 | 24,420 |
Other | 165,780 | 129,560 |
Accrued liabilities | $ 588,948 | $ 518,910 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 7,854,459 | $ 7,116,340 | $ 7,085,120 |
Uniform Rental and Facility Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 6,226,980 | 5,689,632 | 5,643,494 |
First Aid and Safety Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 832,458 | 784,291 | 708,569 |
Fire Protection Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 527,517 | 446,441 | 422,688 |
Uniform Direct Sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 267,504 | $ 195,976 | $ 310,369 |
Product concentration risk | Revenue from Contract with Customer Benchmark | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 100% | 100% | 100% |
Product concentration risk | Revenue from Contract with Customer Benchmark | Uniform Rental and Facility Services | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 79.30% | 80% | 79.60% |
Product concentration risk | Revenue from Contract with Customer Benchmark | First Aid and Safety Services | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 10.60% | 11% | 10% |
Product concentration risk | Revenue from Contract with Customer Benchmark | Fire Protection Services | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 6.70% | 6.30% | 6% |
Product concentration risk | Revenue from Contract with Customer Benchmark | Uniform Direct Sales | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 3.40% | 2.70% | 4.40% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Deferred commissions current | $ 83.7 | $ 79.4 | |
Deferred commissions noncurrent | 232.2 | 227.1 | |
Amortization of deferred commissions | $ 87.4 | $ 83.1 | $ 77.8 |
Revenue from Contract with Customer Benchmark | Product concentration risk | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 100% | 100% | 100% |
Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services | Revenue from Contract with Customer Benchmark | Product concentration risk | Route servicing fees | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 95% | 95% | |
Uniform Direct Sales | Revenue from Contract with Customer Benchmark | Product concentration risk | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 3.40% | 2.70% | 4.40% |
Uniform Direct Sales | Revenue from Contract with Customer Benchmark | Product concentration risk | Other | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenue | 5% |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 90,471 | $ 493,640 |
Other assets, net: | ||
Total assets at fair value | 147,348 | 534,040 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 61,567 | |
Other assets, net | Interest rate lock agreements | ||
Other assets, net: | ||
Interest rate lock agreements | 56,877 | 40,400 |
Long-term accrued liabilities | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 61,567 | |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 90,471 | 493,640 |
Other assets, net: | ||
Total assets at fair value | 90,471 | 493,640 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 0 | |
Level 1 | Other assets, net | Interest rate lock agreements | ||
Other assets, net: | ||
Interest rate lock agreements | 0 | 0 |
Level 1 | Long-term accrued liabilities | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 0 | |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Other assets, net: | ||
Total assets at fair value | 56,877 | 40,400 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 61,567 | |
Level 2 | Other assets, net | Interest rate lock agreements | ||
Other assets, net: | ||
Interest rate lock agreements | 56,877 | 40,400 |
Level 2 | Long-term accrued liabilities | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 61,567 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Other assets, net: | ||
Total assets at fair value | 0 | 0 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 0 | |
Level 3 | Other assets, net | Interest rate lock agreements | ||
Other assets, net: | ||
Interest rate lock agreements | $ 0 | 0 |
Level 3 | Long-term accrued liabilities | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,535,592 | $ 3,373,659 | |
Accumulated depreciation | (2,211,919) | (2,055,221) | |
Property and equipment, net | 1,323,673 | 1,318,438 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 191,878 | 190,711 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 699,430 | 698,094 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 2,548,796 | 2,409,785 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 43,426 | 38,320 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 52,062 | 36,749 | |
Internal use software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 293,900 | 283,800 | |
Accumulated depreciation | $ (177,600) | (154,100) | |
Property and equipment, useful lives | 10 years | ||
Amortization expense | $ 23,500 | $ 22,300 | $ 21,500 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Cash surrender value of insurance policies | $ 237,136 | $ 252,061 |
Equity method investments | 3,574 | 19,388 |
Cost method investments | 2,163 | 3,167 |
Total investments | $ 242,873 | $ 274,616 |
Goodwill, Service Contracts a_3
Goodwill, Service Contracts and Other Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 2,913,069 | $ 2,870,020 |
Goodwill acquired | 143,269 | 7,274 |
Foreign currency translation | (13,362) | 35,775 |
Balance at the end of the period | 3,042,976 | 2,913,069 |
Uniform Rental and Facility Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 2,547,510 | 2,513,041 |
Goodwill acquired | 99,826 | 1,568 |
Foreign currency translation | (12,237) | 32,901 |
Balance at the end of the period | 2,635,099 | 2,547,510 |
First Aid and Safety Services | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 248,571 | 243,266 |
Goodwill acquired | 38,281 | 2,545 |
Foreign currency translation | (1,083) | 2,760 |
Balance at the end of the period | 285,769 | 248,571 |
All Other | ||
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | 116,988 | 113,713 |
Goodwill acquired | 5,162 | 3,161 |
Foreign currency translation | (42) | 114 |
Balance at the end of the period | $ 122,108 | $ 116,988 |
Goodwill, Service Contracts a_4
Goodwill, Service Contracts and Other Assets - Service Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Service contracts [Roll Forward] | ||
Balance at the end of the period | $ 718,612 | |
Service contracts | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 408,445 | $ 451,529 |
Service contracts acquired | 44,738 | 6,237 |
Service contracts amortization | (58,353) | (57,767) |
Foreign currency translation | (3,192) | 8,446 |
Balance at the end of the period | 391,638 | 408,445 |
Uniform rental and facility services | Service contracts | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 369,141 | 407,611 |
Service contracts acquired | 32,695 | 2,369 |
Service contracts amortization | (49,152) | (49,016) |
Foreign currency translation | (3,050) | 8,177 |
Balance at the end of the period | 349,634 | 369,141 |
First Aid and Safety Services | Service contracts | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 18,294 | 19,805 |
Service contracts acquired | 10,384 | 2,132 |
Service contracts amortization | (4,392) | (3,912) |
Foreign currency translation | (142) | 269 |
Balance at the end of the period | 24,144 | 18,294 |
All Other | Service contracts | ||
Service contracts [Roll Forward] | ||
Balance at the beginning of the period | 21,010 | 24,113 |
Service contracts acquired | 1,659 | 1,736 |
Service contracts amortization | (4,809) | (4,839) |
Foreign currency translation | 0 | 0 |
Balance at the end of the period | $ 17,860 | $ 21,010 |
Goodwill, Service Contracts a_5
Goodwill, Service Contracts and Other Assets - Information Regarding Service Contracts and Other Assets (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Information regarding service contracts and other assets | |||
Total future amortization expense | $ 718,612 | ||
Other assets, carrying amount | 728,160 | $ 609,133 | |
Other assets, accumulated amortization | 384,050 | 298,719 | |
Other assets, net | 344,110 | 310,414 | |
Capitalized contract costs | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 551,582 | 459,079 | |
Other assets, accumulated amortization | 319,358 | 231,940 | |
Other assets, net | 232,224 | 227,139 | |
Current portion of capitalized contract costs | 83,700 | 79,400 | |
Noncompete and consulting agreements | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 50,637 | 44,683 | |
Other assets, accumulated amortization | 43,775 | 42,408 | |
Other assets, net | 6,862 | 2,275 | |
Other | |||
Information regarding service contracts and other assets | |||
Other assets, carrying amount | 125,941 | 105,371 | |
Other assets, accumulated amortization | 20,917 | 24,371 | |
Other assets, net | 105,024 | 81,000 | |
Service contracts | |||
Information regarding service contracts and other assets | |||
Service contracts, carrying amount | 1,001,311 | 961,942 | |
Service contracts, accumulated amortization | 609,673 | 553,497 | |
Total future amortization expense | $ 391,638 | $ 408,445 | $ 451,529 |
Goodwill, Service Contracts a_6
Goodwill, Service Contracts and Other Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 148.4 | $ 141.9 | $ 140.8 |
Service contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 13 years | ||
Capitalized contract costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 7 years | ||
Noncompete and consulting agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 5 years | ||
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 10 years |
Goodwill, Service Contracts a_7
Goodwill, Service Contracts and Other Assets - Amortization (Details) $ in Thousands | May 31, 2022 USD ($) |
Goodwill, Service Contracts and Other Assets [Abstract] | |
2023 | $ 139,037 |
2024 | 126,603 |
2025 | 112,032 |
2026 | 93,662 |
2027 | 75,033 |
Thereafter | 172,245 |
Total future amortization expense | $ 718,612 |
Debt and Derivatives - Summary
Debt and Derivatives - Summary of Outstanding Debt (Details) - USD ($) | May 31, 2022 | May 03, 2022 | May 01, 2022 | Apr. 01, 2022 | Jun. 01, 2021 | May 31, 2021 |
Debt due within one year | ||||||
Debt issuance costs | $ (6,000) | $ (930,000) | ||||
Total debt due within one year | 311,574,000 | 899,070,000 | ||||
Debt due after one year | ||||||
Debt issuance costs | (17,033,000) | (9,283,000) | ||||
Total debt due after one year | 2,483,932,000 | 1,642,833,000 | ||||
Senior notes | Senior Notes 2.78%, 2023 Maturity | ||||||
Debt due within one year | ||||||
Debt due within one year, gross | 50,380,000 | 0 | ||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 0 | 50,815,000 | ||||
Interest Rate | 2.78% | |||||
Senior notes | Senior Notes 2.78%, 2023 Maturity | G & K Services | ||||||
Debt due after one year | ||||||
Interest Rate | 3.73% | |||||
Face value | $ 50,000,000 | |||||
Senior notes | Senior Notes 4.30%, 2022 Maturity | ||||||
Debt due within one year | ||||||
Debt due within one year, gross | $ 0 | 250,000,000 | ||||
Debt due after one year | ||||||
Interest Rate | 4.30% | 4.30% | ||||
Senior notes | Senior Notes, 2.90%, 2022 Maturity | ||||||
Debt due within one year | ||||||
Debt due within one year, gross | $ 0 | 650,000,000 | ||||
Debt due after one year | ||||||
Interest Rate | 2.90% | 2.90% | ||||
Senior notes | Senior Notes, 3.25%, 2023 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 0 | 300,000,000 | ||||
Interest Rate | 3.25% | 3.25% | ||||
Senior notes | Senior Notes 3.11%, 2025 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 50,965,000 | 51,301,000 | ||||
Interest Rate | 3.11% | |||||
Senior notes | Senior Notes 3.11%, 2025 Maturity | G & K Services | ||||||
Debt due after one year | ||||||
Interest Rate | 3.88% | |||||
Face value | $ 50,000,000 | |||||
Senior notes | Senior Notes, 3.45%, 2025 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 400,000,000 | 0 | ||||
Interest Rate | 3.45% | 3.45% | ||||
Senior notes | Senior Notes, 3.70%, 2027 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 1,000,000,000 | 1,000,000,000 | ||||
Interest Rate | 3.70% | |||||
Senior notes | Senior Notes, 4.00%, 2032 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 800,000,000 | 0 | ||||
Interest Rate | 4% | 4% | ||||
Senior notes | Senior Notes, 6.15%, 2037 Maturity | ||||||
Debt due after one year | ||||||
Debt due after one year, gross | $ 250,000,000 | 250,000,000 | ||||
Interest Rate | 6.15% | |||||
Commercial paper | ||||||
Debt due within one year | ||||||
Debt due within one year | $ 261,200,000 | 0 | ||||
Commercial paper | Senior Notes 1.20%, 2023 Maturity | ||||||
Debt due within one year | ||||||
Debt due within one year | $ 261,200,000 | $ 0 | ||||
Debt due after one year | ||||||
Variable borrowing rate | 1.20% |
Debt and Derivatives - Narrativ
Debt and Derivatives - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
May 03, 2022 | May 01, 2022 | Apr. 01, 2022 | Jun. 01, 2021 | Jun. 30, 2022 | May 31, 2022 | May 31, 2021 | May 31, 2020 | Mar. 23, 2022 | Mar. 22, 2022 | |
Debt Instrument [Line Items] | ||||||||||
Average interest rate | 3.70% | |||||||||
Long-term debt, carrying amount | $ 2,483,932,000 | $ 1,642,833,000 | ||||||||
Letters of credit outstanding, amount | 106,700,000 | 120,600,000 | ||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Maturities of long term debt, year one | 311,200,000 | |||||||||
Maturities of long term debt, year two | 0 | |||||||||
Maturities of long term debt, year three | 450,000,000 | |||||||||
Maturities of long term debt, year four | 0 | |||||||||
Maturities of long term debt, year five | 1,000,000,000 | |||||||||
Interest paid | 97,800,000 | 98,300,000 | $ 105,500,000 | |||||||
Borrowings on revolving credit facility | 0 | 0 | ||||||||
Amortization of cash flow hedges | 2,061,000 | 1,433,000 | 1,433,000 | |||||||
Notional amount | 500,000,000 | 1,200,000,000 | ||||||||
Interest rate lock agreement, asset position | 28,581,000 | 102,600,000 | 110,248,000 | |||||||
Interest rate lock agreements | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Interest rate lock agreement, asset position | $ 58,900,000 | |||||||||
Commercial paper | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt term | 120 days | |||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Debt due within one year | $ 261,200,000 | 0 | ||||||||
Weighted average interest rate | 1.20% | |||||||||
Proceeds from issuance of debt | $ 261,200,000 | |||||||||
Other comprehensive Income | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Amortization of cash flow hedges | (2,100,000) | (1,400,000) | $ (1,400,000) | |||||||
Revolving Credit Facility | Subsequent Event | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Proceeds from revolving credit facility | $ 125,000,000 | |||||||||
Repayments of revolving credit facility | $ 125,000,000 | |||||||||
Term Notes Due Through 2037 | Unsecured Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt, carrying amount | 2,811,200,000 | 2,550,000,000 | ||||||||
Long-term debt, fair value | $ 2,862,200,000 | $ 2,788,800,000 | ||||||||
Senior Notes 4.30%, 2022 Maturity | Senior notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 250,000,000 | |||||||||
Interest rate | 4.30% | 4.30% | ||||||||
Debt term | 10 years | |||||||||
Senior Notes, 2.90%, 2022 Maturity | Senior notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 650,000,000 | |||||||||
Interest rate | 2.90% | 2.90% | ||||||||
Debt term | 5 years | |||||||||
Senior Notes, 3.25%, 2023 Maturity | Senior notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 300,000,000 | |||||||||
Interest rate | 3.25% | 3.25% | ||||||||
Debt term | 10 years | |||||||||
Senior Notes, 3.45%, 2025 Maturity | Senior notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 3.45% | 3.45% | ||||||||
Proceeds from issuance of commercial paper | $ 400,000,000 | |||||||||
Senior Notes, 4.00%, 2032 Maturity | Senior notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 4% | 4% | ||||||||
Proceeds from issuance of commercial paper | $ 800,000,000 | |||||||||
Credit agreement | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Line of credit facility, accordion feature, increase limit (up to) | $ 500,000,000 | |||||||||
Credit agreement | Revolving Credit Facility | ||||||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||||||
Revolving credit facility, maximum borrowing capacity with accordion feature | $ 2,000,000,000 | $ 1,000,000,000 |
Debt and Derivatives - Interest
Debt and Derivatives - Interest Rate Lock Agreements (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 |
Other assets, net | Interest Rate Contract, 2022 | ||
Derivatives, Fair Value [Line Items] | ||
Other assets, net | $ 18,331 | $ 0 |
Other assets, net | Interest Rate Contract, 2020 | ||
Derivatives, Fair Value [Line Items] | ||
Other assets, net | 38,546 | 40,400 |
Other assets, net | Interest Rate Contract, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Other assets, net | $ 0 | 0 |
Long-term accrued liabilities | Interest Rate Contract, 2022 | ||
Derivatives, Fair Value [Line Items] | ||
Long-term accrued liabilities | 0 | |
Long-term accrued liabilities | Interest Rate Contract, 2020 | ||
Derivatives, Fair Value [Line Items] | ||
Long-term accrued liabilities | 0 | |
Long-term accrued liabilities | Interest Rate Contract, 2019 | ||
Derivatives, Fair Value [Line Items] | ||
Long-term accrued liabilities | $ 61,657 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Leases [Abstract] | |||
Operating lease costs | $ 74.5 | $ 71 | $ 70.4 |
Leases - Cash Flow Information
Leases - Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 49,579 | $ 49,345 |
Operating lease right-of-use assets obtained in exchange for new and renewed operating lease liabilities | 26,862 | 51,850 |
Operating lease right-of-use assets acquired in business combinations | $ 17,734 | $ 0 |
Other information related to operating leases | ||
Weighted-average remaining lease term - operating leases | 5 years 4 months 24 days | 5 years 3 months 29 days |
Weighted-average discount rate - operating leases | 2.20% | 2.32% |
Leases - Contractual Future Min
Leases - Contractual Future Minimum Lease Payments (Details) $ in Thousands | May 31, 2022 USD ($) |
Leases [Abstract] | |
2023 | $ 47,099 |
2024 | 37,499 |
2025 | 29,147 |
2026 | 22,673 |
2027 | 15,701 |
Thereafter | 31,498 |
Total payments | 183,617 |
Less interest | (10,681) |
Total present value of lease payments | $ 172,936 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Income before income taxes for continuing operations consists of the following components: | |||
U.S. operations | $ 1,445,719 | $ 1,221,690 | $ 1,035,902 |
Foreign operations | 53,049 | 66,059 | 22,389 |
Income before income taxes | $ 1,498,768 | $ 1,287,749 | $ 1,058,291 |
Income Taxes - Components of _2
Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Current: | |||
Federal | $ 162,269 | $ 164,104 | $ 153,736 |
State and local | 32,431 | 42,340 | 34,502 |
Foreign | 16,676 | 12,417 | 6,985 |
Current income tax expense | 211,376 | 218,861 | 195,223 |
Deferred | 51,635 | (42,080) | (13,292) |
Income taxes | $ 263,011 | $ 176,781 | $ 181,931 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
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 | $ 314,741 | $ 270,427 | $ 222,258 |
Permanent differences | (85,413) | (101,870) | (67,075) |
State and local income taxes, net of federal benefit | 33,547 | 27,304 | 25,294 |
Capital loss carryback | 0 | (14,072) | 0 |
Other | 136 | (5,008) | 1,454 |
Income taxes | $ 263,011 | $ 176,781 | $ 181,931 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Deferred tax assets: | |||
Reserves related to accounts receivable | $ 10,928 | $ 10,292 | |
Inventory obsolescence | 28,020 | 30,617 | |
Insurance reserves | 45,237 | 45,802 | |
Stock-based compensation | 62,522 | 74,898 | |
Operating lease liabilities | 43,745 | 44,530 | |
Deferred compensation and other | 92,250 | 114,553 | |
Deferred tax assets, gross | 282,702 | 320,692 | |
Valuation allowance | 0 | (2,037) | $ (6,411) |
Deferred tax assets, net | 282,702 | 318,655 | |
Deferred tax liabilities: | |||
Uniform and other rental items in service | 226,510 | 202,846 | |
Property and equipment | 171,819 | 167,622 | |
Service contracts and other intangible assets | 199,256 | 207,834 | |
Treasury locks | 31,566 | 0 | |
Capitalized contract costs | 81,314 | 79,356 | |
Operating lease right-of-use assets | 43,745 | 44,530 | |
State taxes and other | 2,269 | 3,114 | |
Deferred tax liabilities | 756,479 | 705,302 | |
Net deferred tax liability | $ 473,777 | $ 386,647 |
Income Taxes - Summary of Valua
Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Movement in Valuation Allowance [Roll Forward] | ||
Balance at beginning of year | $ (2,037) | $ (6,411) |
Subtractions | 2,037 | 4,374 |
Balance at end of year | $ 0 | $ (2,037) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income taxes paid | $ 208.5 | $ 245.5 | $ 160.3 |
Unrecognized tax benefits that would impact effective tax rates if recognized | 30.8 | 34.2 | |
Unrecognized tax benefits, interest and penalties accrued | $ 4 | $ 4.2 |
Income Taxes - Reconciliation U
Income Taxes - Reconciliation Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Balance at beginning of period | $ 42,457 | $ 44,670 |
Additions for tax positions of the current year | 5,558 | 4,728 |
Additions for tax positions of prior years | 3,093 | 2,726 |
Settlements | (7,352) | (5,593) |
Statute expirations | (6,182) | (4,074) |
Balance at end of period | $ 37,574 | $ 42,457 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | 12 Months Ended | |||
Dec. 10, 2021 USD ($) | May 31, 2022 USD ($) reportingUnit | May 31, 2021 USD ($) reportingUnit | May 31, 2020 USD ($) | |
Business Acquisition [Line Items] | ||||
Cash consideration transferred, net of cash acquired | $ 164,228,000 | $ 10,038,000 | $ 53,720,000 | |
Gain on equity method investment transaction | $ 30,151,000 | $ 0 | $ 0 | |
Amortization period | 9 years | |||
Uniform rental and facility services | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | reportingUnit | 3 | 2 | ||
First Aid and Safety Services | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | reportingUnit | 10 | 3 | ||
All Other | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | reportingUnit | 7 | 5 | ||
Equity Method Investment | ||||
Business Acquisition [Line Items] | ||||
Cash consideration transferred, net of cash acquired | $ 48,000,000 | |||
Cash acquired | 1,700,000 | |||
Equity interest in acquiree, fair value | 43,500,000 | |||
Gain on equity method investment transaction | 30,200,000 | |||
Goodwill deductible for tax purposes | $ 0 |
Acquisitions - Aggregate Purcha
Acquisitions - Aggregate Purchase Price and Fair Value Allocations (Details) - USD ($) $ in Thousands | May 31, 2022 | Dec. 10, 2021 | May 31, 2021 | May 31, 2020 |
Assets | ||||
Goodwill | $ 3,042,976 | $ 2,913,069 | $ 2,870,020 | |
Equity Method Investment | ||||
Assets | ||||
Working capital assets | $ 17,352 | |||
Property and equipment | 16,230 | |||
Operating lease right-of-use assets | 16,882 | |||
Goodwill | 55,986 | |||
Separately identifiable intangible assets | 9,201 | |||
Liabilities | ||||
Total current liabilities | (6,425) | |||
Operating lease liabilities | (17,734) | |||
Total consideration for acquisitions, net of cash acquired | $ 91,492 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation for Other Acquisitions (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Business Acquisition [Line Items] | |||
Net goodwill recognized | $ 3,042,976 | $ 2,913,069 | $ 2,870,020 |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Fair value of tangible assets acquired | 37,412 | 609 | |
Fair value of service contracts acquired | 44,738 | 5,466 | |
Fair value of other intangibles acquired | 6,045 | 552 | |
Fair value of operating lease right-of-use assets, net | 16,882 | 0 | |
Net goodwill recognized | 144,105 | 8,352 | |
Total fair value of assets acquired | 249,182 | 14,979 | |
Fair value of liabilities assumed | (23,720) | (4,941) | |
Fair value of operating lease liabilities | (17,734) | 0 | |
Total fair value of liabilities assumed | (41,454) | (4,941) | |
Total consideration for acquisitions, net of cash acquired | $ 207,728 | $ 10,038 |
Employee Benefit Plans - Obliga
Employee Benefit Plans - Obligations and Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Change in benefit obligation: | ||
Projected benefit obligation, beginning of year | $ 99,728 | $ 105,357 |
Interest cost | 2,148 | 2,050 |
Actuarial gain | (14,044) | (4,460) |
Benefits paid | (3,286) | (3,219) |
Projected benefit obligation, end of year | 84,546 | 99,728 |
Change in plan assets: | ||
Fair value of plan assets, beginning of year | 78,244 | 68,341 |
Actual (loss) return on plan assets | (8,322) | 9,509 |
Employer contributions | 87 | 3,613 |
Benefits paid | (3,286) | (3,219) |
Fair value of plan assets, end of year | 66,723 | 78,244 |
Funded status-net amount recognized | $ (17,823) | $ (21,484) |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Accrued benefit liability | $ 17,800,000 | $ 21,500,000 | |
Unrecognized net actuarial loss | $ 2,900,000 | $ 5,000,000 | |
Expected return on plan assets | 4.80% | 4.25% | |
Expected contributions next twelve months | $ 0 | ||
Expected contributions in year one | 4,200,000 | ||
Expected contributions in year two | 4,400,000 | ||
Expected contributions in year three | 4,500,000 | ||
Expected contributions in year four | 4,700,000 | ||
Expected contributions in year five | 4,800,000 | ||
Expected contributions thereafter | 61,900,000 | ||
Fair value of plan assets | 66,723,000 | $ 78,244,000 | $ 68,341,000 |
Projected benefit obligation | 84,546,000 | 99,728,000 | 105,357,000 |
Employer contributions | 87,000 | 3,613,000 | |
Supplemental Executive Retirement Plan (SERP) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | $ 10,500,000 | 9,100,000 | 8,400,000 |
United States Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Required years of service for plan eligibility | 1 year | ||
Employer contributions | $ 85,000,000 | 75,600,000 | 74,300,000 |
Canada | DPSP and RRSP | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions | 3,400,000 | 3,100,000 | $ 2,600,000 |
Pension Plan of Immaterial Acquisitions | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 8,400,000 | 9,200,000 | |
Projected benefit obligation | $ 7,500,000 | $ 8,900,000 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Pension (Benefit) Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Retirement Benefits [Abstract] | ||
Interest cost | $ 2,148 | $ 2,050 |
Expected return on assets | (3,651) | (2,924) |
Amortization of net loss | 0 | 222 |
Net periodic pension benefit | $ (1,503) | $ (652) |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Assumptions Used to Determine Benefit Obligations (Details) | 12 Months Ended | |
May 31, 2022 | May 31, 2021 | |
Assumptions used to determine benefit obligations | ||
Discount rate | 4.11% | 2.83% |
Assumptions used to determine net periodic pension (benefit) cost | ||
Discount rate | 2.83% | 2.54% |
Expected return on plan assets | 4.80% | 4.25% |
Employee Benefit Plans - Asset
Employee Benefit Plans - Asset Allocations in the Pension Plan (Details) | May 31, 2022 | May 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 100% | |
Actual Asset Allocation | 100% | 100% |
Large cap equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 26% | |
Actual Asset Allocation | 29.10% | 29.80% |
Small cap equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 5% | |
Actual Asset Allocation | 6.20% | 6% |
International equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 8% | |
Actual Asset Allocation | 8.20% | 8.30% |
Fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 45% | |
Actual Asset Allocation | 43.20% | 44.10% |
Absolute return strategy funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 16% | |
Actual Asset Allocation | 12.70% | 11.30% |
Cash | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target Asset Allocation | 0% | |
Actual Asset Allocation | 0.60% | 0.50% |
Employee Benefit Plans - Pensio
Employee Benefit Plans - Pension Plan Investments Using the Fair Value Hierarchy (Details) - USD ($) $ in Thousands | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | $ 66,723 | $ 78,244 | $ 68,341 |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 40,864 | 46,982 | |
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 25,859 | 31,262 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash equivalents | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 503 | 556 | |
Cash equivalents | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 503 | 556 | |
Cash equivalents | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash equivalents | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. government securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 6,017 | 7,566 | |
U.S. government securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 2,839 | 3,066 | |
U.S. government securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 3,178 | 4,500 | |
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 | 0 | |
Corporate debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 22,681 | 26,762 | |
Corporate debt | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate debt | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 22,681 | 26,762 | |
Corporate debt | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
U.S. securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 32,016 | 36,909 | |
U.S. securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 32,016 | 36,909 | |
U.S. securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 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 | 0 | |
International securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 5,506 | 6,451 | |
International securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 5,506 | 6,451 | |
International securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
International securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of plan assets | $ 0 | $ 0 |
Earnings per Share - Computatio
Earnings per Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Basic Earnings per Share from Continuing Operations | |||
Income from continuing operations | $ 1,235,757 | $ 1,110,968 | $ 876,360 |
Less: income from continuing operations allocated to participating securities | 6,132 | 7,623 | 8,158 |
Income from continuing operations available to common shareholders | $ 1,229,625 | $ 1,103,345 | $ 868,202 |
Basic weighted average common shares outstanding (in shares) | 103,172 | 104,874 | 103,816 |
Basic earnings per share from continuing operations (in dollars per share) | $ 11.92 | $ 10.52 | $ 8.36 |
Diluted Earnings per Share from Continuing Operations | |||
Income from continuing operations | $ 1,235,757 | $ 1,110,968 | $ 876,360 |
Less: income from continuing operations allocated to participating securities | 6,132 | 7,623 | 8,158 |
Income from continuing operations available to common shareholders | $ 1,229,625 | $ 1,103,345 | $ 868,202 |
Basic weighted average common shares outstanding (in shares) | 103,172 | 104,874 | 103,816 |
Effect of dilutive securities - employee stock options (in shares) | 2,351 | 2,833 | 3,196 |
Diluted weighted average common shares outstanding (in shares) | 105,523 | 107,707 | 107,012 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 11.65 | $ 10.24 | $ 8.11 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 2 Months Ended | 12 Months Ended | ||||||
Jul. 27, 2022 | Jul. 27, 2022 | May 31, 2022 | May 31, 2021 | May 31, 2020 | Jul. 27, 2021 | Oct. 29, 2019 | Oct. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Basic earnings per share, discontinued operations (in dollars per share) | $ 0 | $ 0 | $ 0 | |||||
Diluted earnings per share, discontinued operations (in dollars per share) | $ 0 | $ 0 | $ 0 | |||||
Options granted excluded from the computation of diluted earnings per share (in shares) | 500 | 200 | 200 | |||||
Total purchase price of shares repurchased | $ 1,525,873 | $ 554,121 | $ 464,518 | |||||
Share Buyback Program October 2018 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 1,000,000 | |||||||
Stock purchased under share buyback (in shares) | 0 | 190 | 1,607 | |||||
Average price per share (in dollars per share) | $ 0 | $ 319.88 | $ 246.19 | |||||
Total purchase price of shares repurchased | $ 0 | $ 60,877 | $ 395,681 | |||||
Share Buyback Program October 2019 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 1,000,000 | |||||||
Stock purchased under share buyback (in shares) | 1,590 | 1,196 | 0 | |||||
Average price per share (in dollars per share) | $ 365.41 | $ 350.31 | $ 0 | |||||
Total purchase price of shares repurchased | $ 581,220 | $ 418,779 | $ 0 | |||||
Share Buyback Program July 27 2021 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Share buyback program, authorized amount | $ 1,500,000 | |||||||
Stock purchased under share buyback (in shares) | 2,150 | 0 | 0 | |||||
Average price per share (in dollars per share) | $ 383.01 | $ 0 | $ 0 | |||||
Total purchase price of shares repurchased | $ 823,429 | $ 0 | $ 0 | |||||
Noncash Share Repurchase Transaction | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Stock purchased under share buyback (in shares) | 100 | |||||||
Average price per share (in dollars per share) | $ 402.73 | |||||||
Total purchase price of shares repurchased | $ 28,700 | |||||||
Subsequent Event | Share Buyback Program July 27 2022 | ||||||||
Earnings Per Share, Basic and Diluted [Line Items] | ||||||||
Stock purchased under share buyback (in shares) | 500 | 2,700 | ||||||
Average price per share (in dollars per share) | $ 396.39 | $ 385.66 | ||||||
Total purchase price of shares repurchased | $ 210,800 | $ 1,000,000 |
Earnings per Share - Summary of
Earnings per Share - Summary of Buyback Activity by Program (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||
Purchase Price | $ 1,525,873 | $ 554,121 | $ 464,518 |
Shares acquired for taxes due (in shares) | 305 | 246 | 264 |
Shares acquired for taxes due, average price (in dollars per share) | $ 397.16 | $ 302.52 | $ 260.89 |
Shares acquired for taxes due | $ 121,224 | $ 74,465 | $ 68,837 |
Total repurchase of Cintas common stock | $ 1,525,873 | $ 554,121 | $ 464,518 |
Share Repurchase Programs | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares (in shares) | 3,740 | 1,386 | 1,607 |
Average Price per Share (in dollars per share) | $ 375.53 | $ 346.13 | $ 246.19 |
Purchase Price | $ 1,404,649 | $ 479,656 | $ 395,681 |
Share Buyback Program October 2018 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares (in shares) | 0 | 190 | 1,607 |
Average Price per Share (in dollars per share) | $ 0 | $ 319.88 | $ 246.19 |
Purchase Price | $ 0 | $ 60,877 | $ 395,681 |
Share Buyback Program October 2019 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares (in shares) | 1,590 | 1,196 | 0 |
Average Price per Share (in dollars per share) | $ 365.41 | $ 350.31 | $ 0 |
Purchase Price | $ 581,220 | $ 418,779 | $ 0 |
Share Buyback Program July 27 2021 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares (in shares) | 2,150 | 0 | 0 |
Average Price per Share (in dollars per share) | $ 383.01 | $ 0 | $ 0 |
Purchase Price | $ 823,429 | $ 0 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
May 31, 2022 | May 31, 2021 | May 31, 2020 | Aug. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average fair value of stock options granted (in dollars per share) | $ 84.10 | $ 66.52 | $ 48.20 | |
Intrinsic value of options exercised | $ 348.3 | $ 402.3 | $ 262.1 | |
Proceeds from stock options exercised | 117.7 | 130 | 90.5 | |
Fair value of vested stock options | 36.7 | 30.5 | 27.8 | |
Aggregate intrinsic value of outstanding options | 853.2 | |||
Aggregate intrinsic value of exercisable options | $ 443 | |||
Weighted-average remaining contractual term of stock options exercisable | 4 years | |||
Unrecognized compensation cost related to unvested stock options and restricted stock | $ 221.8 | |||
Weighted-average period of time unrecognized compensation cost will be recognized | 2 years 1 month 13 days | |||
Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized under plan (in shares) | 12,500,000 | |||
Shares reserved for future issuance (in shares) | 5,966,288 | |||
Stock Compensation Plan | Continuing Operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 109.3 | 112 | 115.4 | |
The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements | $ 27.9 | $ 28.6 | $ 29.2 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum term after grant options may be exercised | 10 years | |||
Award expiration term | 10 years | |||
Stock Options | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options vesting period | 3 years | |||
Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options vesting period | 5 years | |||
Restricted Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period of awards | 3 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Determine Fair Value of Options (Details) - Stock Options | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.80% | 0.40% | 1.90% |
Dividend yield | 1.20% | 1.10% | 1.10% |
Expected volatility of Cintas' common stock | 25.20% | 23.50% | 19% |
Expected life of the option in years | 5 years 6 months | 5 years 6 months | 6 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Granted and Outstanding (Details) - $ / shares | 12 Months Ended | |||
May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | |
Shares | ||||
Outstanding, beginning of period (in shares) | 6,055,524 | 7,105,399 | 8,208,934 | |
Granted (in shares) | 531,963 | 747,550 | 575,813 | |
Canceled (in shares) | (877) | (1,452) | (5,432) | |
Forfeited (in shares) | (260,249) | (91,722) | (312,391) | |
Exercised (in shares) | (1,238,959) | (1,704,251) | (1,361,525) | |
Outstanding, end of period (in shares) | 5,087,402 | 6,055,524 | 7,105,399 | |
Options exercisable (in shares) | 1,575,999 | 1,548,867 | 1,913,374 | 1,919,976 |
Weighted Average Exercise Price | ||||
Outstanding, beginning of period (in dollars per share) | $ 191.11 | $ 145.54 | $ 123.80 | |
Granted (in dollars per share) | 398.92 | 348.24 | 250.50 | |
Canceled (in dollars per share) | 116.25 | 59.51 | 72.17 | |
Forfeited (in dollars per share) | 273.53 | 193.94 | 185.08 | |
Exercised (in dollars per share) | 118.21 | 83.31 | 70.03 | |
Outstanding, end of period (in dollars per share) | $ 230.62 | $ 191.11 | $ 145.54 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Information Related to Stock Options Outstanding (Details) | 12 Months Ended |
May 31, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit (in dollars per share) | $ 28.14 |
Range of Exercise Prices, upper limit (in dollars per share) | $ 433.10 |
Number Outstanding (in shares) | shares | 5,087,402 |
Average Remaining Option Life | 6 years 6 months 7 days |
Weighted Average Exercise Price (in dollars per share) | $ 230.62 |
Number Exercisable (in shares) | shares | 1,575,999 |
Weighted Average Exercise Price (in dollars per share) | $ 117.25 |
Range 1 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit (in dollars per share) | 28.14 |
Range of Exercise Prices, upper limit (in dollars per share) | $ 108.39 |
Number Outstanding (in shares) | shares | 937,222 |
Average Remaining Option Life | 3 years |
Weighted Average Exercise Price (in dollars per share) | $ 84.16 |
Number Exercisable (in shares) | shares | 937,222 |
Weighted Average Exercise Price (in dollars per share) | $ 84.16 |
Range 2 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit (in dollars per share) | 108.40 |
Range of Exercise Prices, upper limit (in dollars per share) | $ 204.48 |
Number Outstanding (in shares) | shares | 930,495 |
Average Remaining Option Life | 5 years 4 months 6 days |
Weighted Average Exercise Price (in dollars per share) | $ 144.96 |
Number Exercisable (in shares) | shares | 431,699 |
Weighted Average Exercise Price (in dollars per share) | $ 140.83 |
Range 3 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit (in dollars per share) | 204.49 |
Range of Exercise Prices, upper limit (in dollars per share) | $ 260.79 |
Number Outstanding (in shares) | shares | 1,571,534 |
Average Remaining Option Life | 6 years 7 months 17 days |
Weighted Average Exercise Price (in dollars per share) | $ 230.68 |
Number Exercisable (in shares) | shares | 185,277 |
Weighted Average Exercise Price (in dollars per share) | $ 208.50 |
Range 4 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of Exercise Prices, lower limit (in dollars per share) | 260.80 |
Range of Exercise Prices, upper limit (in dollars per share) | $ 433.10 |
Number Outstanding (in shares) | shares | 1,648,151 |
Average Remaining Option Life | 9 years 29 days |
Weighted Average Exercise Price (in dollars per share) | $ 362.20 |
Number Exercisable (in shares) | shares | 21,801 |
Weighted Average Exercise Price (in dollars per share) | $ 297.34 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards Granted and Outstanding (Details) - Restricted Stock Awards - $ / shares | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Shares | |||
Outstanding, beginning of period (in shares) | 1,241,223 | 1,625,215 | 2,191,688 |
Granted (in shares) | 189,874 | 274,843 | 228,292 |
Forfeited (in shares) | (66,589) | (48,586) | (135,934) |
Vested (in shares) | (527,899) | (610,249) | (658,831) |
Outstanding, end of period (in shares) | 836,609 | 1,241,223 | 1,625,215 |
Weighted Average Grant Price | |||
Outstanding beginning of period (in dollars per share) | $ 264.63 | $ 199.73 | $ 149.12 |
Granted (in dollars per share) | 398.30 | 352.68 | 248.39 |
Forfeited (in dollars per share) | 323 | 241.95 | 208.37 |
Vested (in dollars per share) | 213.36 | 147.32 | 113.93 |
Outstanding end of period (in dollars per share) | $ 331.95 | $ 264.63 | $ 199.73 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Changes in AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | $ 3,687,847 | $ 3,235,202 | $ 3,002,721 |
Other comprehensive (loss) income before reclassifications | 79,090 | 185,701 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,061) | (1,433) | |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | 77,029 | 184,268 | (116,203) |
Ending balance | 3,308,196 | 3,687,847 | 3,235,202 |
Foreign Currency | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | 41,839 | (26,343) | |
Other comprehensive (loss) income before reclassifications | (24,833) | 68,182 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | (24,833) | 68,182 | |
Ending balance | 17,006 | 41,839 | (26,343) |
Unrealized (Loss) Income on Interest Rate Hedges | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | (7,308) | (112,718) | |
Other comprehensive (loss) income before reclassifications | 102,057 | 106,843 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,061) | (1,433) | |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | 99,996 | 105,410 | |
Ending balance | 92,688 | (7,308) | (112,718) |
Other | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | (3,643) | (14,319) | |
Other comprehensive (loss) income before reclassifications | 1,866 | 10,676 | |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | 1,866 | 10,676 | |
Ending balance | (1,777) | (3,643) | (14,319) |
Other Accumulated Comprehensive (Loss) Income | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | 30,888 | (153,380) | (39,152) |
Other comprehensive income (loss), net of tax expense (benefit) of $36,242, $40,213 and $(35,132), respectively | 77,029 | 184,268 | (116,203) |
Ending balance | $ 107,917 | $ 30,888 | $ (153,380) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Schedule of Reclassifications (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ 88,844 | $ 98,210 | $ 105,393 |
Tax expense | (263,011) | (176,781) | (181,931) |
Amortization of interest rate locks, net of tax | 1,235,757 | 1,110,968 | $ 876,360 |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Tax expense | (672) | (463) | |
Amortization of interest rate locks, net of tax | 2,061 | 1,433 | |
Interest Rate Contract | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense | $ 2,733 | $ 1,896 |
Operating Segment Information_2
Operating Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Disclosures related to operating segments | |||
Revenue | $ 7,854,459 | $ 7,116,340 | $ 7,085,120 |
Gross margin | 3,632,246 | 3,314,651 | 3,233,748 |
Selling and administrative expenses | 2,044,876 | 1,929,159 | 2,071,052 |
Interest expense, net | 88,602 | 97,743 | 104,405 |
Income before income taxes | 1,498,768 | 1,287,749 | 1,058,291 |
Depreciation and amortization | 399,701 | 387,951 | 379,053 |
Capital expenditures | 240,672 | 143,470 | 230,289 |
Total assets | 8,147,256 | 8,236,823 | 7,669,885 |
Uniform Rental and Facility Services | |||
Disclosures related to operating segments | |||
Revenue | 6,226,980 | 5,689,632 | 5,643,494 |
First Aid and Safety Services | |||
Disclosures related to operating segments | |||
Revenue | 832,458 | 784,291 | 708,569 |
Operating Segments | Uniform Rental and Facility Services | |||
Disclosures related to operating segments | |||
Revenue | 6,226,980 | 5,689,632 | 5,643,494 |
Gross margin | 2,910,547 | 2,706,118 | 2,588,349 |
Selling and administrative expenses | 1,557,057 | 1,480,278 | 1,583,791 |
Interest expense, net | 0 | 0 | 0 |
Income before income taxes | 1,353,490 | 1,225,840 | 1,004,558 |
Depreciation and amortization | 329,473 | 323,596 | 317,699 |
Capital expenditures | 166,559 | 104,020 | 183,364 |
Total assets | 6,979,731 | 6,743,272 | 6,531,673 |
Operating Segments | First Aid and Safety Services | |||
Disclosures related to operating segments | |||
Revenue | 832,458 | 784,291 | 708,569 |
Gross margin | 372,193 | 332,336 | 338,661 |
Selling and administrative expenses | 265,430 | 251,153 | 231,769 |
Interest expense, net | 0 | 0 | 0 |
Income before income taxes | 106,763 | 81,183 | 106,892 |
Depreciation and amortization | 48,656 | 43,314 | 38,516 |
Capital expenditures | 59,656 | 34,384 | 35,678 |
Total assets | 664,040 | 637,663 | 611,205 |
Operating Segments | All Other | |||
Disclosures related to operating segments | |||
Revenue | 795,021 | 642,417 | 733,057 |
Gross margin | 349,506 | 276,197 | 306,738 |
Selling and administrative expenses | 222,389 | 197,728 | 255,492 |
Interest expense, net | 0 | 0 | 0 |
Income before income taxes | 127,117 | 78,469 | 51,246 |
Depreciation and amortization | 21,572 | 21,041 | 22,838 |
Capital expenditures | 14,457 | 5,066 | 11,247 |
Total assets | 413,014 | 362,248 | 381,605 |
Corporate | |||
Disclosures related to operating segments | |||
Revenue | 0 | 0 | 0 |
Gross margin | 0 | 0 | 0 |
Selling and administrative expenses | 0 | 0 | 0 |
Interest expense, net | 88,602 | 97,743 | 104,405 |
Income before income taxes | (88,602) | (97,743) | (104,405) |
Depreciation and amortization | 0 | 0 | 0 |
Capital expenditures | 0 | 0 | 0 |
Total assets | $ 90,471 | $ 493,640 | $ 145,402 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Allowance for Doubtful Accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 12,097 | $ 35,433 | $ 11,343 |
Additions | 30,278 | 27,517 | 40,521 |
Deductions | 29,457 | 50,853 | 16,431 |
Balance at End of Year | $ 12,918 | 12,097 | $ 35,433 |
Allowance for Doubtful Accounts, COVID-19 | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Deductions | $ 14,200 |