What changed in this filing

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Item 1. Financial Statements

2025-01-08 compared with 2024-10-04 · 194 added, 71 removed, 448 unchanged (37% of the section changed)

2 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

Three Months Ended

(In thousands except per share data) August 31, 2024 August 31, 2023

Three Months Ended Six Months Ended

(In thousands except per share data) November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023

Uniform rental and facility services $ 1,990,410 $ 1,850,542 $ 3,924,249 $ 3,677,367

18 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

(In thousands) August 31,

2024 August 31,

Three Months Ended Six Months Ended

(In thousands) November 30,

2024 November 30,

2023 November 30,

2024 November 30,

Net income $ 448,495 $ 374,613 $ 900,528 $ 759,698

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments

Change in fair value of interest rate lock agreements, net of tax (benefit)

expense of $( 3,408 ) and $ 2,806 , respectively

( 18,491 ) ( 1,813 ) ( 14,835 ) 821

Change in fair value of interest rate lock

agreements, net of tax expense (benefit)

of $ 1,766 , $ 3,115 , $( 1,642 ) and $ 5,921 ,

5,161 9,099 ( 4,795 ) 17,298

Amortization of interest rate lock agreements, net of tax benefit of $( 513 ), $( 503 ), $( 1,026 ) and $( 990 ), respectively

( 1,523 ) ( 1,495 ) ( 3,046 ) ( 2,937 )

Other comprehensive (loss) income, net of tax (benefit) expense of $( 3,921 )

Other, net of tax expense of $ 0 , $ 130 ,

$ 0 and $ 130 , respectively

Other comprehensive (loss) income, net of

tax expense (benefit) of $ 1,253 , $ 2,742 ,

$( 2,668 ) and $ 5,061 , respectively

( 14,853 ) 6,170 ( 22,676 ) 15,561

3 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands) August 31,

(In thousands) November 30,

Current assets:

3 unchanged sentences

Uniforms and other rental items in service 1,094,039 1,040,144

Income taxes, current 10,920 —

Prepaid expenses and other current assets 177,939 148,665

56 unchanged sentences

Balance at August 31, 2024 775,231 $ 2,415,723 $ 10,912,033 $ 83,378 ( 371,972 ) $ ( 9,389,711 ) $ 4,021,423

Net income — — 448,495 — — — 448,495

Comprehensive loss, net of tax — — — ( 14,853 ) — — ( 14,853 )

Dividends — — ( 158,004 ) — — — ( 158,004 )

Stock-based compensation — 32,417 — — — — 32,417

Vesting of stock-based compensation awards 14 — — — — — —

Stock options exercised 519 26,173 — — ( 122 ) ( 25,829 ) 344

Repurchase of common stock — — — — ( 174 ) ( 36,716 ) ( 36,716 )

Balance at November 30, 2024 775,764 $ 2,474,313 $ 11,202,524 $ 68,525 ( 372,268 ) $ ( 9,452,256 ) $ 4,293,106

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

and Paid-In Capital Retained

13 unchanged sentences

Balance at August 31, 2023 770,631 $ 2,121,475 $ 9,844,128 $ 87,169 ( 362,921 ) $ ( 7,975,137 ) $ 4,077,635

Net income — — 374,613 — — — 374,613

Comprehensive income, net of tax — — — 6,170 — — 6,170

Dividends — — ( 137,474 ) — — — ( 137,474 )

Stock-based compensation — 22,940 — — — — 22,940

Vesting of stock-based compensation awards 14 — — — — — —

Stock options exercised 800 35,536 — — ( 273 ) ( 35,087 ) 449

Repurchase of common stock — — — — ( 2,861 ) ( 349,852 ) ( 349,852 )

Balance at November 30, 2023 771,445 $ 2,179,951 $ 10,081,267 $ 93,339 ( 366,055 ) $ ( 8,360,076 ) $ 3,994,481

See accompanying notes.

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Three Months Ended

(In thousands) August 31, 2024 August 31, 2023

Six Months Ended

(In thousands) November 30, 2024 November 30, 2023

Cash flows from operating activities:

4 unchanged sentences

Stock-based compensation 65,784 53,182

Gain on sale of property and equipment ( 4,295 ) —

Deferred income taxes 3,753 ( 7,105 )

12 unchanged sentences

Purchases of investments ( 7,092 ) ( 7,475 )

Proceeds from sale of property and equipment 5,908 —

Acquisitions of businesses, net of cash acquired ( 154,884 ) ( 73,997 )

27 unchanged sentences

Inventories, net are comprised of the following at:

(In thousands) August 31,

(In thousands) November 30,

Raw materials $ 16,212 $ 16,664

2 unchanged sentences

Inventories, net $ 394,605 $ 410,201

Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $ 65.2 million and $ 63.1 million at August 31, 2024 and May 31, 2024, respectively.

Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $ 62.9 million and $ 63.1 million at November 30, 2024 and May 31, 2024, respectively.

The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence.

7 unchanged sentences

ASU 2023-07 requires additional disclosures pertaining to significant expenses and other items of an entity’s reportable operating segments.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 (fiscal 2025).

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 (fiscal 2025), and for interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026).

Early adoption is permitted.

The Company is currently evaluating the impact of ASU 2023-07 on the consolidated condensed financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures (ASU 2023-09), which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

ASU 2023-09 will be effective for annual periods

beginning after December 15, 2024 (fiscal 2026).

ASU 2023-09 will be effective for annual periods beginning after December 15, 2024 (fiscal 2026).

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated condensed financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (ASU 2024-03), which requires, among other items, additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the statement of income.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 (fiscal 2028), and for interim periods within fiscal years beginning after December 15, 2027 (fiscal 2029), with early adoption permitted.

The Company is currently evaluating the impact of ASU 2024-03 on the consolidated condensed financial statements.

There are no other accounting pronouncements recently issued or newly effective that had, or are expected to have, a material impact on Cintas' consolidated condensed financial statements.

Note 2 - Revenue Recognition

The following table presents Cintas' total revenue disaggregated by operating segment for the three months ended August 31:

(In thousands) 2024 2023

Uniform Rental and Facility Services $ 1,933,839 77.3 % $ 1,826,825 78.0 %

First Aid and Safety Services 292,567 11.7 % 260,693 11.1 %

Fire Protection Services 197,497 7.9 % 174,316 7.5 %

Uniform Direct Sales 77,684 3.1 % 80,496 3.4 %

The following table presents Cintas' total revenue disaggregated by operating segment:

Three Months Ended Six Months Ended

(In thousands) November 30,

2024 November 30,

2023 November 30,

2024 November 30,

Uniform Rental

Services $ 1,990,410 77.7 % $ 1,850,542 77.9 % $ 3,924,249 77.5 % $ 3,677,367 77.9 %

First Aid and

Safety Services 299,367 11.7 % 266,401 11.2 % 591,934 11.7 % 527,094 11.2 %

Fire Protection

Services 193,749 7.5 % 173,950 7.3 % 391,246 7.7 % 348,266 7.4 %

Uniform Direct

Sales 78,257 3.1 % 86,284 3.6 % 155,941 3.1 % 166,780 3.5 %

Total revenue $ 2,561,783 100.0 % $ 2,377,177 100.0 % $ 5,063,370 100.0 % $ 4,719,507 100.0 %

16 unchanged sentences

The current portion is included in prepaid expenses and other current assets, and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets.

As of August 31, 2024, the current and noncurrent assets related to capitalized commissions totaled $ 95.0 million and $ 265.9 million, respectively.

As of November 30, 2024, the current and noncurrent assets related to capitalized commissions totaled $ 95.0 million and $ 268.9 million, respectively.

As of May 31, 2024, the current and noncurrent assets related to capitalized commissions totaled $ 94.6 million and $ 262.5 million, respectively.

The Company recorded amortization expense related to capitalized commissions of $ 25.9 million and $ 24.4 million during the three months ended August 31, 2024 and 2023, respectively.

The Company recorded amortization expense related to capitalized commissions of $ 26.7 million and $ 25.2 million during the three months ended November 30, 2024 and 2023, respectively.

During the six months ended November 30, 2024 and 2023, we recorded amortization expense related to capitalized commissions of $ 52.6 million and $ 49.6 million, respectively.

These expenses are classified in selling and administrative expenses on the consolidated condensed statements of income.

9 unchanged sentences

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 both periods, were $ 21.8 million and $ 19.7 million for the three months ended August 31, 2024 and 2023, respectively.

The following table provides supplemental information related to the Company's consolidated condensed statements of cash flows for the three months ended August 31:

Operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $ 22.8 million and $ 20.8 million for the three months ended November 30, 2024 and 2023, respectively.

For the six months ended November 30, 2024 and 2023, operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $ 44.6 million and $ 40.5 million, respectively.

The following table provides supplemental information related to the Company's consolidated condensed statements of cash flows for the six months ended November 30:

(In thousands) 2024 2023

2 unchanged sentences

operating lease liabilities $ 17,972 $ 22,684

Operating lease right-of-use assets acquired in business combinations $ 2,885 $ 267

Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows:

1 unchanged sentence

Weighted-average discount rate 3.69 % 3.48 %

The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of August 31, 2024:

The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of November 30, 2024:

(In thousands)

2025 (remaining nine months)

2025 (remaining six months)

Thereafter 35,824

5 unchanged sentences

These financial instruments measured at fair value on a recurring basis are summarized below:

As of August 31, 2024 As of May 31, 2024

As of November 30, 2024 As of May 31, 2024

(In thousands) Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Fair Value

16 unchanged sentences

The assets and liabilities measured at fair value on a nonrecurring basis primarily relate to assets and liabilities acquired in a business acquisition.

See Note 9 entitled Acquisitions.

Note 5 - Earnings Per Share

Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards.

The following tables set forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas’ common shares for the three months ended August 31 (in each case as adjusted to reflect the Stock Split):

The following tables set forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas’ common shares (in each case as adjusted to reflect the Stock Split):

Three Months Ended Six Months Ended

Basic Earnings per Share

(In thousands except per share data)

November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023

Net income $ 448,495 $ 374,613 $ 900,528 $ 759,698

4 unchanged sentences

Basic earnings per share $ 1.11 $ 0.92 $ 2.22 $ 1.86

Three Months Ended Six Months Ended

Diluted Earnings per Share

(In thousands except per share data)

November 30, 2024 November 30, 2023 November 30, 2024 November 30, 2023

Net income $ 448,495 $ 374,613 $ 900,528 $ 759,698

4 unchanged sentences

Effect of dilutive securities – employee stock options

7,086 6,397 7,124 6,548

Diluted weighted average common shares outstanding

1 unchanged sentence

Diluted earnings per share $ 1.09 $ 0.90 $ 2.19 $ 1.83

For the three months ended August 31, 2024 and 2023, options granted to purchase 0.3 million and 0.6 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share.

For the three months ended November 30, 2024 and 2023, options granted to purchase 1.2 million and 2.0 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share.

For the six months ended November 30, 2024 and 2023, options granted to purchase 0.7 million and 1.3 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share.

The exercise prices of these options were greater than the average market price of the common stock (anti-dilutive).

1 unchanged sentence

None of the share buyback programs have an expiration date.

The following table summarizes the share buyback activity by program and period for the three months ended August 31:

The following table summarizes the share buyback activity by program and period:

Three Months Ended Six Months Ended

November 30, 2024 November 30, 2024

Buyback Activity

4 unchanged sentences

July 27, 2021 — $ — $ — — $ — $ —

July 26, 2022 — — — 2,732 173.40 473,617

July 23, 2024 — — — — — —

— $ — $ — 2,732 $ 173.40 $ 473,617

Shares acquired for taxes due (1)

174 $ 211.44 $ 36,716 918 $ 193.79 $ 177,901

Total repurchase of Cintas common stock $ 36,716 $ 651,518

Three Months Ended Six Months Ended

November 30, 2023 November 30, 2023

Buyback Activity

(In thousands except per share data)

per Share Purchase

Price Shares Avg.

per Share Purchase

July 27, 2021 2,633 $ 121.64 $ 320,266 2,633 $ 121.64 $ 320,266

July 26, 2022 — — — — — —

July 23, 2024 — — — — — —

2,633 $ 121.64 $ 320,266 2,633 $ 121.64 $ 320,266

2 unchanged sentences

Total repurchase of Cintas common stock $ 349,852 $ 423,128

(1) The July 27, 2021 share buyback program was completed during the fourth quarter of fiscal 2024.

(1) Shares of Cintas common 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.

The following table summarizes Cintas' non-cash share buyback activity for the three months ended August 31:

The following table summarizes Cintas' non-cash share buyback activity:

Three Months Ended Six Months Ended

November 30, 2024 November 30, 2024

(In thousands except per share data)

3 unchanged sentences

Non-cash transaction activity 122 $ 210.76 $ 25,829 529 $ 193.79 $ 102,653

There were no share buybacks in the period subsequent to August 31, 2024, through October 4, 2024.

From the inception of the July 26, 2022 share buyback program through October 4, 2024, Cintas has purchased 3.1 million shares of Cintas common stock in the aggregate, at an average price of $ 172.85 per share, for a total purchase price of $ 530.7 million.

Three Months Ended Six Months Ended

November 30, 2023 November 30, 2023

per Share Non-Cash

Value Shares Avg.

per Share Non-Cash

Non-cash transaction activity 273 $ 128.69 $ 35,087 745 $ 126.71 $ 94,300

There were no share buybacks in the period subsequent to November 30, 2024, through January 8, 2025.

From the inception of the July 26, 2022 share buyback program through January 8, 2025, Cintas has purchased 3.1 million shares of Cintas common stock in the aggregate, at an average price of $ 172.85 per share, for a total purchase price of $ 530.7 million.

Cintas has made no purchases under the July 23, 2024 share buyback program.

Note 6 - Goodwill, Service Contracts and Other Assets, Net

Changes in the carrying amount of goodwill and service contracts by reportable operating segment and All Other for the three months ended August 31, 2024, are as follows:

Changes in the carrying amount of goodwill and service contracts by reportable operating segment and All Other for the six months ended November 30, 2024, are as follows:

(In thousands)

5 unchanged sentences

Foreign currency translation ( 5,919 ) ( 564 ) ( 22 ) ( 6,505 )

Balance as of August 31, 2024 $ 2,778,423 $ 294,330 $ 150,775 $ 3,223,528

Balance as of November 30, 2024 $ 2,870,764 $ 294,671 $ 157,608 $ 3,323,043

Service Contracts

7 unchanged sentences

Foreign currency translation ( 1,079 ) ( 23 ) — ( 1,102 )

Balance as of August 31, 2024 $ 279,784 $ 15,069 $ 16,346 $ 311,199

Balance as of November 30, 2024 $ 291,730 $ 14,330 $ 17,444 $ 323,504

Information regarding Cintas’ service contracts, net and other assets, net is as follows:

As of August 31, 2024 As of May 31, 2024

As of November 30, 2024 As of May 31, 2024

(In thousands) Carrying

10 unchanged sentences

Other assets $ 973,649 $ 539,039 $ 434,610 $ 1,010,869 $ 585,918 $ 424,951

(1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheets as of August 31, 2024 and May 31, 2024, is $ 95.0 million and $ 94.6 million, respectively.

Amortization expense for service contracts and other assets was $ 40.7 million and $ 38.5 million for the three months ended August 31, 2024 and 2023, respectively.

(1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheets as of November 30, 2024 and May 31, 2024, is $ 95.0 million and $ 94.6 million, respectively.

Amortization expense for service contracts and other assets was $ 41.8 million and $ 39.4 million for the three months ended November 30, 2024 and 2023, respectively.

For the six months ended November 30, 2024 and 2023, amortization expense for service contracts and other assets was $ 82.5 million and $ 77.9 million, respectively.

These expenses are recorded in selling and administrative expenses on the consolidated condensed statements of income.

As of August 31, 2024, the estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, is as follows:

As of November 30, 2024, 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)

2025 (remaining nine months) $ 116,518

2025 (remaining six months) $ 79,222

Thereafter 186,211

5 unchanged sentences

Issued Fiscal Year

Maturity August 31,

Maturity November 30,

Debt due within one year

13 unchanged sentences

(1) Variable rate debt instrument.

The rate presented is the variable borrowing rate at August 31, 2024.

The rate presented is the variable borrowing rate at November 30, 2024.

(2) Cintas assumed these senior notes with the acquisition of G&K Services, Inc.

3 unchanged sentences

The fair value of the long-term debt is estimated using Level 2 inputs based on observable market prices.

The carrying value and fair value of Cintas' debt as of August 31, 2024 were $ 2,486.6 million and $ 2,464.5 million, respectively, and as of May 31, 2024 were $ 2,486.6 million and $ 2,392.8 million, respectively.

During the three months ended August 31, 2024, Cintas issued $ 166.0 million, net of commercial paper.

During the three months ended August 31, 2023, Cintas repurchased, and subsequently retired, $ 10.0 million of its 6.15 %, 30-year senior notes.

In conjunction with these transactions Cintas recognized a loss of $ 0.8 million, which is recorded in interest expense on the consolidated condensed statements of income for the thre e months ended Au gust 31, 2023.

The carrying value and fair value of Cintas' debt as of November 30, 2024 were $ 2,486.6 million and $ 2,450.3 million, respectively, and as of May 31, 2024 were $ 2,486.6 million and $ 2,392.8 million, respectively.

During the six months ended November 30, 2024 and 2023, Cintas issued $ 181.0 million and $ 210.0 million, net of commercial paper, respectively.

During the three and six months ended November 30, 2023, Cintas repurchased, and subsequently retired, $ 3.5 million and $ 13.5 million, respectively, of its 6.15 %, 30-year senior notes.

In conjunction with these transactions, during the three and six months ended November 30, 2023, Cintas recognized a loss of $ 0.1 million and $ 0.9 million, respectively, which is recorded in interest expense on the consolidated condensed statements of income.

The credit agreement that supports our commercial paper program has capacity under the revolving credit facility of $ 2.0 billion.

1 unchanged sentence

The maturity date of the revolving credit facility is March 23, 2027.

As of August 31, 2024, there was $ 166.0 million of commercial paper outstanding with a weighted average interest rate of 5.44 % and no borrowings on our revolving credit facility.

As of November 30, 2024, there was $ 181.0 million of commercial paper outstanding with a weighted average interest rate of 4.70 % and no borrowings on our revolving credit facility.

As of May 31, 2024, there was no commercial paper outstanding and no borrowings on our revolving credit facility.

3 unchanged sentences

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 2017 and fiscal 2022.

For the three months ended August 31, 2024 and 2023, the amortization of the interest rate locks resulted in a decrease to other comprehensive income (loss) of $ 1.5 million and $ 1.4 million, respectively.

The amortization of the interest rate locks resulted in a decrease to other comprehensive income of $ 1.5 million for both the three months ended November 30, 2024 and 2023.

For the six months ended November 30, 2024 and 2023, the amortization of the interest rate locks resulted in a decrease to other comprehensive income of $ 3.0 million and $ 2.9 million, respectively.

During fiscal 2022 and fiscal 2020, Cintas entered into interest rate lock agreements for forecasted debt issuances.

The aggregate notional value of outstanding cash flow hedges was $ 500.0 million at both August 31, 2024 and May 31, 2024.

The aggregate notional value of outstanding cash flow hedges was $ 500.0 million at both November 30, 2024 and May 31, 2024.

The fair values of the outstanding interest rate locks, for forecasted debt issuances, are summarized as follows:

August 31, 2024 May 31, 2024

Fiscal Year of Issuance

(In thousands)

assets, net Other

Other Assets, net Other Assets, net

2022 $ 54,036 $ 56,717

1 unchanged sentence

The changes in fair value of the interest rate locks are recorded in other comprehensive income (loss), net of tax.

These interest rate locks had no impact on net income or cash flows for the three months ended August 31, 2024 or 2023.

These interest rate locks had no impact on net income or cash flows for the three and six months ended November 30, 2024 or 2023.

Cintas has certain covenants related to debt agreements.

6 unchanged sentences

In the normal course of business, Cintas provides for uncertain tax positions and the related interest and adjusts its unrecognized tax benefits and accrued interest accordingly.

As of August 31, 2024 and May 31, 2024, recorded unrecognized tax benefits were $ 35.2 million and $ 32.7 million, respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheets.

As of November 30, 2024 and May 31, 2024, recorded unrecognized tax benefits were $ 37.7 million and $ 32.7 million, respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheets.

The majority of Cintas' operations are in North America.

8 unchanged sentences

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, 2025.

Cintas’ effective tax rate was 15.8 % and 19.2 % for the three months ended August 31, 2024 and 2023, respectively.

The effective tax rate for both periods was impacted by certain discrete items (primarily the tax accounting for stock-based compensation).

Cintas’ effective tax rate was 20.7 % and 20.9 % for the three months ended November 30, 2024 and 2023, respectively.

For the six months ended November 30, 2024 and 2023, Cintas' effective tax rate was 18.3 % and 20.1 %, respectively.

The effective tax rate for all periods was impacted by certain discrete items (primarily the tax accounting impact for stock-based compensation).

Note 9 - Acquisitions

The purchase price paid for each acquisition has been allocated to the fair value of the assets acquired and liabilities assumed.

The fair value summarized in the table below is reflective of the accumulated fair value, as of the date of each acquisition.

Cintas acquired the following number of individually immaterial businesses by reportable operating segment and All Other during the six months ended November 30:

Uniform Rental and Facility Services 5 5

First Aid and Safety Services 2 1

All Other 8 5

The following summarizes the aggregate purchase price and fair value allocations for all businesses acquired during the six months ended November 30:

(In thousands) 2024 2023

Fair value of tangible assets acquired $ 21,987 $ 5,880

Fair value of service contracts acquired 30,702 9,480

Fair value of other intangibles acquired 5,247 2,762

Net goodwill recognized 117,124 64,060

Total fair value of assets acquired 175,060 82,182

Total fair value of liabilities assumed ( 2,417 ) —

Total fair value of net assets acquired, net of cash acquired 172,643 82,182

Deferred purchase price consideration ( 17,759 ) ( 8,185 )

Total cash consideration for acquisitions, net of cash acquired $ 154,884 $ 73,997

Goodwill was 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 goodwill were based on strategic benefits that are expected to be realized from the acquisitions.

None of the goodwill is expected to be deductible for income tax purposes.

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 condensed financial statements.

Note 10 - Accumulated Other Comprehensive Income (Loss)

10 unchanged sentences

Balance at August 31, 2024 ( 14,636 ) 97,414 600 83,378

Other comprehensive (loss) income before

reclassifications ( 18,491 ) 5,161 — ( 13,330 )

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 1,523 ) — ( 1,523 )

Net current period other comprehensive (loss) income ( 18,491 ) 3,638 — ( 14,853 )

Balance at November 30, 2024 $ ( 33,127 ) $ 101,052 $ 600 $ 68,525

(In thousands) Foreign

7 unchanged sentences

Balance at August 31, 2023 ( 14,367 ) 103,471 ( 1,935 ) 87,169

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

Other comprehensive (loss) income before

reclassifications ( 1,813 ) 9,099 379 7,665

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 1,495 ) — ( 1,495 )

Net current period other comprehensive (loss) income ( 1,813 ) 7,604 379 6,170

Balance at November 30, 2023 $ ( 16,180 ) $ 111,075 $ ( 1,556 ) $ 93,339

The following table summarizes the reclassifications out of accumulated other comprehensive income (loss):

Details about Accumulated

5 unchanged sentences

Statements of Income

(In thousands) 2024 2023

Amortization of interest rate locks $ 2,036 $ 1,929 Interest expense

Three Months Ended Six Months Ended

(In thousands) November 30,

2024 November 30,

2023 November 30,

2024 November 30,

Amortization of interest

rate locks $ 2,036 $ 1,998 $ 4,072 $ 3,927 Interest expense

Tax expense ( 513 ) ( 503 ) ( 1,026 ) ( 990 ) Income taxes

5 unchanged sentences

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.

The remainder of Cintas’ operating segments, which consists of the Fire Protection Services operating segment and the Uniform Direct Sales 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 revenue and operating income.

5 unchanged sentences

Other Corporate (1)

As of and for the three months ended August 31, 2024

For the three months ended November 30, 2024

Revenue $ 1,990,410 $ 299,367 $ 272,006 $ — $ 2,561,783

Operating income $ 472,359 $ 75,223 $ 43,808 $ — $ 591,390

For the three months ended November 30, 2023

Revenue $ 1,850,542 $ 266,401 $ 260,234 $ — $ 2,377,177

Operating income $ 399,611 $ 58,531 $ 41,541 $ — $ 499,683

As of and for the six months ended November 30, 2024

Revenue $ 3,924,249 $ 591,934 $ 547,187 $ — $ 5,063,370

Operating income $ 918,797 $ 146,511 $ 87,113 $ — $ 1,152,421

Total assets $ 7,811,418 $ 777,847 $ 654,869 $ 122,395 $ 9,366,529

As of and for the three months ended August 31, 2023

As of and for the six months ended November 30, 2023

Revenue $ 3,677,367 $ 527,094 $ 515,046 $ — $ 4,719,507

10 unchanged sentences

This is a contract dispute whereby plaintiffs allege that Cintas breached its contracts with participating public agencies and seek, among other things, contract-based damages.

In March 2024, an agreement in principle was reached with the plaintiff which would require a one-time monetary payment related to the contract dispute of $ 45.0 million, which was accrued for and included in accrued liabilities on the consolidated condensed balance sheet at August 31, 2024.

The amount reserved for this matter did not have a material impact on the consolidated condensed statements of income for any period presented.

1 unchanged sentence

These future investments are not expected to be material to the Company.

The tentative settlement remains subject to confirmatory discovery and approval of the U.S.

District Court for the District of Nevada, however, we do not anticipate any material changes in the amounts reflected in the consolidated condensed financial statements.

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.

The tentative settlement remains subject to approval of the U.S.

District Court for the District of Nevada;

however, we do not anticipate any material changes in the amounts reflected in the consolidated condensed financial statements.

The Company, the Board, 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).

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements