What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-07-28 compared with 2024-07-25 · 75 added, 166 removed, 999 unchanged (19% of the section changed)

33 unchanged sentences

President and Chief Executive Officer

Michael Hansen

Executive Vice President and Chief Financial Officer

25 unchanged sentences

As described in Note 1 to the Company’s consolidated financial statements, the Company’s insurance reserve represents the estimated ultimate cost of all asserted and unasserted (incurred but not reported) claims primarily related to workers' compensation, auto liability and other general liability exposure.

The unasserted (incurred but not reported) insurance reserve is estimated through actuarial procedures using industry assumptions, adjusted for Company specific expectations based on claims history.

The unasserted (incurred but not reported) insurance reserve is estimated through actuarial procedures and by using industry assumptions, adjusted for Company specific expectations based on claims history.

Auditing the Company's estimate of the unasserted (incurred but not reported) insurance reserve is judgmental and complex due to the significant estimation uncertainty of the potential value of unasserted claims, which are developed with the assistance of a third-party actuarial specialist.

1 unchanged sentence

This includes internal controls over the claims activity and actuarial methods used to establish the unasserted (incurred but not reported) insurance reserve.

Specifically, we tested internal controls related to management’s review of data provided to the actuary, validation of claim activity and review of actuarial methods.

To test the unasserted (incurred but not reported) insurance reserve, our audit procedures included, among others, assessing the methodologies used to estimate the incurred but not reported insurance reserve, testing the completeness and accuracy of the underlying claims data, vouching payments made to third parties, and testing the mathematical accuracy of the actuarially determined unasserted (incurred but not reported) insurance reserve.

Specifically, we tested internal controls related to management’s review of data provided to the actuary and validation of claim activity.

To test the unasserted (incurred but not reported) insurance reserve, our audit procedures included, among others, assessing the methodologies used to estimate the insurance reserve, testing the completeness and accuracy of the underlying claims data and vouching payments made to third parties.

Furthermore, we involved our actuarial specialists to assist in evaluating the methodologies used by management to determine the unasserted (incurred but not reported) insurance reserve and comparing the Company’s recorded unasserted (incurred but not reported) insurance reserve to a range developed based on independently selected actuarial methodologies.

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969 2,535 ( 158 )

Other comprehensive income (loss), net of tax expense of $ 5,070 ,

Other comprehensive (loss) income, net of tax expense of $ 249 ,

$ 5,070 and $ 1,358 , respectively

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Net income — — 1,348,010 — — — 1,348,010

Comprehensive income, net of tax — — — 77,029 — — 77,029

Comprehensive loss, net of tax — — — ( 30,139 ) — — ( 30,139 )

Dividends — — ( 469,858 ) — — — ( 469,858 )

5 unchanged sentences

Net income — — 1,571,592 — — — 1,571,592

Comprehensive loss, net of tax — — — ( 30,139 ) — — ( 30,139 )

Comprehensive income, net of tax — — — 13,423 — — 13,423

Dividends — — ( 550,952 ) — — — ( 550,952 )

5 unchanged sentences

Net income — — 1,812,281 — — — 1,812,281

Comprehensive income, net of tax — — — 13,423 — — 13,423

Comprehensive loss, net of tax — — — ( 6,812 ) — — ( 6,812 )

Dividends — — ( 631,785 ) — — — ( 631,785 )

13 unchanged sentences

Stock-based compensation 128,329 116,986 103,621

Gain on equity method investment transaction — — ( 30,151 )

Net gain on sale of operating assets — — ( 12,129 )

Gain on sale of property and equipment ( 19,341 ) — —

Deferred income taxes ( 5,807 ) ( 28,912 ) 23,233

13 unchanged sentences

Purchases of investments ( 7,196 ) ( 7,546 ) ( 4,566 )

Proceeds from sale of operating assets, net of cash disposed — — 15,347

Proceeds from sale of property and equipment 23,972 — —

Acquisitions of businesses, net of cash acquired ( 232,899 ) ( 186,837 ) ( 46,357 )

2 unchanged sentences

Cash flows from financing activities:

(Payments) issuance of commercial paper, net — ( 261,200 ) 261,200

Payments of commercial paper, net — — ( 261,200 )

Proceeds from issuance of debt 398,088 — —

Debt issuance costs ( 1,165 ) — —

Repayment of debt ( 450,000 ) ( 13,450 ) ( 50,000 )

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 1,298 ) 206 ( 4,186 )

Net increase (decrease) in cash and cash equivalents 217,866 33,678 ( 403,169 )

Net (decrease) increase in cash and cash equivalents ( 78,042 ) 217,866 33,678

Cash and cash equivalents at beginning of year 342,015 124,149 90,471

5 unchanged sentences

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 ® .

With products and services including uniforms, mats, mops, shop towels, restroom supplies, workplace water services, first aid and safety products, eye-wash stations, safety training, fire extinguishers, sprinkler systems and alarm services, 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.

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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 First Aid and Safety Services reportable operating segment consists of first aid and safety products and services, as well as workplace water 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.

1 unchanged sentence

Revenue and operating income for the fiscal years ended May 31, 2025, 2024 and 2023 are presented in Note 14 entitled Operating Segment Information.

The Company regularly reviews its operating segments for reporting purposes based on the information its chief operating decision maker regularly reviews for purposes of allocating resources and assessing performance and makes changes when appropriate.

The Company regularly reviews its operating segments for reporting purposes based on the information its chief operating decision maker (CODM) regularly reviews for purposes of allocating resources and assessing performance and makes changes when appropriate.

Principles of consolidation.

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The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract and is not material in any period presented.

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

When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of

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.

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Uniforms in service (other than cleanroom garments) are amortized over their useful lives, which range from 18 to 30 months.

Other rental items, including shop towels, mats, mops, cleanroom garments, 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.

Other rental items, primarily including shop towels, mats, mops, cleanroom garments, 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 and Cintas' specific experience.

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.

Investments .

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The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract.

As permitted by ASC 606, Revenue from Contracts with Customers (ASC 606), the Company has elected to apply the guidance to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the consolidated financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio.

As permitted by Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (ASC 606), the Company has elected to apply the guidance to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the consolidated financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio.

The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of ASC 606 or the amortization period of the asset would have been one year or less.

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Acquisition-related transaction costs are recognized separately from the business combinations and expensed as incurred.

On December 10, 2021, Cintas acquired the remaining interest of an equity method investment.

The acquisition operates 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.

Debt issuance costs.

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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.

Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other industry 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 employee-partners who are covered by union-administered plans.

The Company assumed the G&K Services, Inc.

(G&K) noncontributory, defined benefit pension plan (the Pension Plan) covering substantially all employees who were employed as of July 1, 2005, except certain employee-partners who are covered by union-administered plans.

Benefits are based on the number of years of service and each employee-partner's compensation near retirement.

1 unchanged sentence

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 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.

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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.

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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.

Financial Accounting Standards Board (FASB) 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.

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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.

On May 2, 2024, the Company announced a four -for-one split of its common stock (the Stock Split), in the form of a stock dividend.

Shareholders of record, as of September 4, 2024, received three additional common stock shares for each common stock share held, which were distributed after market close on September 11, 2024.

The Company's common stock shares began trading on a post Stock Split basis after the market opening on September 12, 2024.

All comparable period references made to common stock shares, equity awards, common stock per share amounts and treasury stock shares in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Stock Split.

Reclassification of prior year presentation.

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the Company's reported results of operations.

New accounting pronouncements.

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (ASU 2023-07).

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 requires additional disclosures pertaining to significant expenses that are regularly provided to the CODM and other items of an entity’s reportable operating segments.

Early adoption is permitted.

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

This standard was adopted by Cintas on May 31, 2025 and did not have a material impact on the Company's consolidated 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.

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

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Senior notes 3.70 % 2017 2027 $ 1,000,000 $ 1,000,000

3.11 % 2015 2025 $ — $ 50,630

Senior notes 4.20 % 2025 2028 400,000 —

1 unchanged sentence

Senior notes 6.15 % 2007 2037 236,550 236,550

Senior notes 6.15 % 2007 2037 236,550 250,000

Debt issuance costs ( 11,551 ) ( 10,616 )

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The carrying value and fair value of Cintas' debt as of May 31, 2025 were $ 2,436.6 million and $ 2,404.7 million, respectively, and as of May 31, 2024 were $ 2,486.6 million and $ 2,392.8 million, respectively.

On April 15, 2025, in accordance with the terms of the senior notes, Cintas paid the $ 50.0 million aggregate principal amount outstanding of its 3.11 %, private placement, 10-year senior notes that matured on that date with cash on hand.

On May 1, 2025, in accordance with the terms of the senior notes, Cintas paid the $ 400.0 million aggregate principal outstanding of its 3.45 %, 3-year senior notes that matured on that date with cash on hand.

On May 2, 2025, Cintas issued $ 400.0 million aggregate principal amount of senior notes that bear an interest rate of 4.20 % and mature on May 1, 2028.

During the fiscal year ended May 31, 2024, Cintas repurchased and subsequently retired, $ 13.5 million of its 6.15 %, 30-year senior notes.

In conjunction with these transactions, Cintas recognized a loss of $ 0.9 million, which is recorded in interest expense on the consolidated statement of income for the fiscal year ended May 31, 2024.

During the fiscal year ended May 31, 2023, Cintas paid $ 261.2 million, net of commercial paper.

On April 17, 2023, in accordance with the terms of the notes, Cintas paid the $ 50.0 million aggregate principal amount outstanding of its 3.73 %, private placement, 10-year senior notes that matured on that date with proceeds from short-term commercial paper issuance.

Letters of credit outstanding were $ 129.6 million and $ 118.0 million at May 31, 2025 and 2024, respectively.

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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.

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.

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Deferred tax assets:

Reserves related to accounts receivable $ 13,478 $ 12,562

Allowance for credit losses $ 17,352 $ 13,478

Inventory reserves 17,734 18,913

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Income taxes paid were $ 454.9 million, $ 423.1 million and $ 291.9 million for the fiscal years ended May 31, 2025, 2024 and 2023, respectively.

As of May 31, 2024 and 2023, there was $ 32.7 million and $ 29.3 million, respectively, in total unrecognized tax benefits, which, if recognized, would favorably impact Cintas' effective tax rate.

As of May 31, 2025 and 2024, there was $ 47.8 million and $ 32.7 million, net of federal benefit, 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.

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Additions for tax positions of prior years 3,791

Settlements ( 7,325 )

Statute expirations ( 1,530 )

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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).

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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 (benefit) during fiscal year 2025 is not material.

Information on the Pension Plan obligations and funded status are presented in the following table at May 31:

(In thousands)

Change in benefit obligation:

Projected benefit obligation, beginning of year $ 77,739 $ 84,546

Interest cost 3,423 3,089

Actuarial gain ( 3,052 ) ( 6,556 )

Benefits paid ( 3,128 ) ( 3,340 )

Plan settlements (1)

Projected benefit obligation, end of year $ 64,311 $ 77,739

Change in plan assets:

Fair value of plan assets, beginning of year $ 60,038 $ 66,723

Actual gain (loss) on plan assets 1,212 ( 3,345 )

Employer contributions 821 —

Benefits paid ( 3,128 ) ( 3,340 )

Plan settlements (1)

Fair value of plan assets, end of year $ 48,272 $ 60,038

Funded status-net amount recognized $ ( 16,039 ) $ ( 17,701 )

(1) Plan settlements in fiscal 2024 are the result of lump-sum payments to participants exiting the Pension Plan.

As of May 31, 2025 and 2024, the fair value of the plan assets was $ 52.5 million and $ 48.3 million, respectively.

As of May 31, 2025 and 2024 the PBO was $ 63.7 million and $ 64.3 million, respectively.

The net pension liability of $ 11.2 million and $ 16.0 million was included in long-term accrued liabilities on the consolidated balance sheets as of May 31, 2025 and 2024, respectively.

An unrecognized net actuarial loss of $ 0.8 million and $ 3.0 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, 2024 and 2023, respectively.

The components of net periodic pension cost (benefit) are summarized as follows for the fiscal years ended May 31:

(In thousands)

Interest cost $ 3,423 $ 3,089

Expected return on assets ( 2,521 ) ( 3,350 )

Plan settlements loss 461 —

Net periodic pension cost (benefit) $ 1,363 $ ( 261 )

The following weighted average assumptions were used to determine the PBO for the Pension Plan for the fiscal years ended May 31:

Discount rate 5.36 % 4.89 %

The following weighted average assumptions were used to determine net periodic pension cost (benefit) for the Pension Plan for the fiscal years ended May 31:

Discount rate 4.89 % 4.11 %

Expected return on plan assets 4.90 % 5.20 %

The asset allocations in the Pension Plan are as follows at May 31:

2024 2024 2023

Allocation Actual Asset

Large cap equity 26.0 % 25.7 % 27.3 %

Small cap equity 5.0 % 4.5 % 5.2 %

International equity 8.0 % 7.9 % 8.8 %

Fixed income 45.0 % 45.9 % 44.8 %

Absolute return strategy funds 16.0 % 12.5 % 13.6 %

Cash 0.0 % 3.5 % 0.3 %

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 4.90 % expected return on Pension Plan assets for fiscal year 2024 and 5.20 % expected return on Pension Plan assets for fiscal year 2023.

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 dates.

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 dates.

Pension Plan assets are held in trust for the benefit of the plan participants and are invested in a diversified portfolio of equity investments, fixed income investments and cash.

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:

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Matrix pricing, primarily used for marketable debt securities, is based on quoted prices for securities with similar coupons, ratings and maturities, rather than on specific bids and offers for the specific security.

The types of financial instruments based on quoted market prices in active markets generally include cash equivalents (money market securities), certain U.S government securities and mutual funds.

The types of financial instruments based on quoted market prices in active markets generally include cash equivalents (money market securities) and mutual funds.

Such instruments are generally classified within Level 1 of the fair value hierarchy.

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However, due to the inherent volatility in the investment market, there is at least a reasonable possibility that recorded investment values may change by a material amount in the near term.

We expect to make contributions of approximately $ 5.1 million to the Pension Plan during the next 12 months.

The Pension Plan benefit payments expected to be paid for each of the next five fiscal years and thereafter are $ 3.7 million, $ 3.9 million, $ 4.1 million, $ 4.2 million, $ 4.4 million and $ 44.0 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 cost (benefit) 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 is immaterial for detailed disclosure purposes.

As of May 31, 2024 and 2023, the fair value of this pension plan's total assets was $ 8.7 million and $ 7.8 million, respectively, and the PBO was $ 6.8 million and $ 6.9 million, respectively.

Non-Contributory Retirement Plans

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

On October 29, 2019, we announced the Board 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 authorized a $ 1.5 billion share buyback program, which was completed during the fourth quarter of fiscal 2024.

From the inception of the July 27, 2021 share buyback program through May, 2024, Cintas has purchased a total of 3.6 million shares of Cintas common stock at an average price of $ 421.77 per share for a total purchase price of

$ 1.5 billion.

On July 26, 2022, Cintas announced that the Board authorized a new $ 1.0 billion share buyback program, which does not have an expiration date.

Cintas announced on July 27, 2021, that the Board authorized $ 1.5 billion share buyback program, which was completed during the fourth quarter of fiscal 2024.

On July 26, 2022 and July 23, 2024, Cintas announced that the Board authorized new share buyback programs, each for $ 1.0 billion.

Neither of the outstanding share buyback programs have an expiration date.

The following table summarizes the buyback activity by program and fiscal years ended May 31:

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Price per Share Purchase

October 29, 2019 — $ — $ — — $ — $ — 1,590 $ 365.41 $ 581,220

July 27, 2021 — $ — $ — 3,425 $ 133.80 $ 458,284 2,201 $ 99.17 $ 218,288

July 26, 2022 3,794 179.07 679,329 339 168.44 57,104 — — —

July 23, 2024 — — — — — — — — —

3,794 $ 179.07 $ 679,329 3,764 $ 136.92 $ 515,388 2,201 $ 99.17 $ 218,288

5 unchanged sentences

(1) Shares of Cintas stock acquired for employee-partner payroll taxes due on options exercised and vested restricted stock awards.

In addition to the share buyback activity presented above, beginning in fiscal 2022, Cintas acquired shares of Cintas common stock, via non-cash transactions, in connection with net-share settlements of option exercises.

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 fiscal years ended May 31:

6 unchanged sentences

Non-cash transaction activity 808 $ 196.93 $ 158,953 1,133 $ 137.18 $ 155,403 1,440 $ 106.21 $ 152,983

In the period subsequent to May 31, 2024, through July 25, 2024, under the July 26, 2022 share buyback plan, we purchased 0.7 million shares of Cintas common stock at an average price of $ 693.58 for a total purchase price of $ 473.6 million.

There were no share buybacks in the period subsequent to May 31, 2025, through July 28, 2025.

From the inception of the July 26, 2022 share buyback program through July 28, 2025, Cintas has purchased 4.1 million shares of Cintas common stock in the aggregate, at an average price of $ 178.20 per share, for a total purchase price of $ 736.4 million.

Common Stock Split

On May 2, 2024, the Company announced a 4 -for-1 split of its common stock.

Shareholders of record, as of September 4, 2024, will receive three additional shares for each share held, which will be distributed after market close on September 11, 2024.

The Company's shares are expected to begin trading on a post-split basis at the market open on September 12, 2024.

The following table presents unaudited proforma earnings per share on a post-split basis for the fiscal years ended May 31:

(In thousands except per share data)

2024 2023 2022

Net income allocated to common shareholders, as reported $ 1,565,664 $ 1,342,547 $ 1,229,625

Proforma basic weighted average common shares outstanding 406,612 406,580 412,688

Proforma effect of dilutive securities - employee stock options 6,856 6,928 9,404

Proforma diluted weighted average common shares outstanding 413,468 413,508 422,092

Proforma basic earnings per share $ 3.85 $ 3.30 $ 2.98

Proforma diluted earnings per share $ 3.79 $ 3.25 $ 2.91

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

Stock-Based Compensation

On August 2, 2016, the Board 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, 2024, 4,982,123 shares of common stock were reserved for future issuance under the 2016 Plan.

On July 23, 2024, the Board approved and adopted the Cintas Corporation 2016 Amended and Restated Equity and Incentive Compensation Plan (the Amended 2016 Plan) to replace the existing 2016 Equity Compensation Plan (the 2016 Plan).

The Amended 2016 Plan was approved by Cintas shareholders at its Annual Meeting on October 29, 2024, at which time the Amended 2016 Plan became effective.

Under the Amended 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 50,000,000 shares of Cintas' common stock, inclusive of shares represented by grants previously made under the 2016 Plan.

At May 31, 2025, 19,246,017 shares of common stock were reserved for future issuance under the Amended 2016 Plan.

Total compensation cost for stock-based awards was $ 128.3 million, $ 117.0 million and $ 103.6 million for the fiscal years ended May 31, 2025, 2024 and 2023, respectively.

30 unchanged sentences

Granted 1,633,988 165.58

Canceled ( 1,710 ) 65.79

Forfeited ( 442,372 ) 102.84

35 unchanged sentences

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:

The information presented in the following table relates to restricted stock awards granted and outstanding under either the Amended 2016 Plan or under previously adopted plans:

Shares Weighted

50 unchanged sentences

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 revenue and operating income.

Our CODM is the chief executive officer.

The CODM is responsible for setting the Company's strategic direction, managing overall operations, and is the main point of communications between the Board and key operational personnel within the organization.

The CODM evaluates each operating segment's performance primarily based on revenue and operating income, using this information to guide strategic decisions and allocate resources across the Company.

The accounting policies of the operating segments are the same as those described in Note 1 entitled Significant Accounting Policies.

2 unchanged sentences

and Facility Services First Aid

and Safety Services All Other Corporate (1)

and Safety Services All

Other Corporate (1)

Revenue $ 7,976,073 $ 1,218,090 $ 1,146,018 $ — $ 10,340,181

Cost of sales 4,040,888 521,480 603,649 — 5,166,017

Gross margin 3,935,185 696,610 542,369 — 5,174,164

5 unchanged sentences

Revenue $ 7,465,199 $ 1,067,334 $ 1,064,082 $ — $ 9,596,615

Cost of sales 3,865,071 474,678 570,450 — 4,910,199

Gross margin 3,600,128 592,656 493,632 — 4,686,416

5 unchanged sentences

Revenue $ 6,897,130 $ 951,496 $ 967,143 $ — $ 8,815,769

Cost of sales 3,632,175 469,408 540,818 — 4,642,401

Gross margin 3,264,955 482,088 426,325 — 4,173,368

8 unchanged sentences

In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of business actions will not have a material adverse effect on the consolidated financial position, consolidated results of operations or consolidated cash flows of Cintas.

Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.

The Company is a defendant in a purported class action lawsuit, City of Laurel, Mississippi v.

2 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 balance sheet at May 31, 2024.

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

In March 2024, an agreement in principle was reached with the plaintiff which would require a monetary payment related to the contract dispute of $ 45.0 million, which was accrued for and included in accrued liabilities on the consolidated balance sheet at May 31, 2025 and May 31, 2024.

The amount reserved for this matter did not have a material impact on the fiscal 2024 consolidated statement of income.

The Company will also make certain future investments such as people and technology.

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 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.

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.

In November 2023, an agreement in principle was reached with the plaintiffs, which would require a payment of an immaterial amount that would be covered by the Company's insurance.

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

District Court for the Southern District of Ohio.

The Company received final court approval from the U.S.

District Court for the District of Nevada on April 29, 2025 and paid the settlement in July, 2025.

Changes in and Disagreements with

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data