What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-03 compared with 2025-01-08 · 110 added, 95 removed, 547 unchanged (27% of the section changed)

2 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands except per share data) February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Uniform rental and facility services $ 2,021,144 $ 1,876,642 $ 5,945,393 $ 5,554,009

18 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

(In thousands) November 30,

2024 November 30,

2023 November 30,

2024 November 30,

Three Months Ended Nine Months Ended

(In thousands) February 28,

2025 February 29,

2024 February 28,

2025 February 29,

Net income $ 463,497 $ 397,579 $ 1,364,025 $ 1,157,277

18 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands) November 30,

(In thousands) February 28,

Current assets:

70 unchanged sentences

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

Net income — — 463,497 — — — 463,497

Comprehensive loss, net of tax — — — ( 11,475 ) — — ( 11,475 )

Dividends — — ( 158,195 ) — — — ( 158,195 )

Stock-based compensation — 31,802 — — — — 31,802

Vesting of stock-based compensation awards 30 — — — — — —

Stock options exercised 378 19,761 — — ( 101 ) ( 19,637 ) 124

Repurchase of common stock — — — — ( 134 ) ( 26,611 ) ( 26,611 )

Balance at February 28, 2025 776,172 $ 2,525,876 $ 11,507,826 $ 57,050 ( 372,503 ) $ ( 9,498,504 ) $ 4,592,248

CINTAS CORPORATION

23 unchanged sentences

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

Net income — — 397,579 — — — 397,579

Comprehensive loss, net of tax — — — ( 7,016 ) — — ( 7,016 )

Dividends — — ( 137,598 ) — — — ( 137,598 )

Stock-based compensation — 31,308 — — — — 31,308

Vesting of stock-based compensation awards 4 — — — — — —

Stock options exercised 912 35,070 — — ( 232 ) ( 34,723 ) 347

Repurchase of common stock — — — — ( 298 ) ( 45,018 ) ( 45,018 )

Balance at February 29, 2024 772,361 $ 2,246,329 $ 10,341,248 $ 86,323 ( 366,585 ) $ ( 8,439,817 ) $ 4,234,083

See accompanying notes.

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Six Months Ended

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

Nine Months Ended

(In thousands) February 28, 2025 February 29, 2024

Cash flows from operating activities:

24 unchanged sentences

Cash flows from financing activities:

Issuance of commercial paper, net 181,000 210,000

Repayment of debt — ( 13,450 )

5 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 3,790 ) 341

Net decrease in cash and cash equivalents ( 219,620 ) ( 38,593 )

Net (decrease) increase in cash and cash equivalents ( 98,587 ) 4,334

Cash and cash equivalents at beginning of period 342,015 124,149

14 unchanged sentences

Inventories, net are comprised of the following at:

(In thousands) November 30,

(In thousands) February 28,

Raw materials $ 20,223 $ 16,664

2 unchanged sentences

Inventories, net $ 420,826 $ 410,201

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.

Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $ 62.7 million and $ 63.1 million at February 28, 2025 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.

22 unchanged sentences

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,

Three Months Ended Nine Months Ended

(In thousands) February 28,

2025 February 29,

2024 February 28,

2025 February 29,

Uniform Rental

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

As of February 28, 2025, the current and noncurrent assets related to capitalized commissions totaled $ 94.8 million and $ 270.1 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 $ 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.

The Company recorded amortization expense related to capitalized commissions of $ 27.4 million and $ 25.6 million during the three months ended February 28, 2025 and February 29, 2024, respectively.

During the nine months ended February 28, 2025 and February 29, 2024, we recorded amortization expense related to capitalized commissions of $ 80.0 million and $ 75.3 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 $ 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

Operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $ 22.9 million and $ 21.0 million for the three months ended February 28, 2025 and February 29, 2024, respectively.

For the nine months ended February 28, 2025 and February 29, 2024, operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $ 67.5 million and $ 61.5 million, respectively.

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

(In thousands) February 28, 2025 February 29, 2024

Cash paid for amounts included in the measurement of operating lease liabilities $ 41,724 $ 38,577

5 unchanged sentences

Weighted-average discount rate 3.93 % 3.48 %

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

The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of February 28, 2025:

(In thousands)

2025 (remaining six months)

2025 (remaining three months)

Thereafter 58,649

5 unchanged sentences

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

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

As of February 28, 2025 As of May 31, 2024

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

20 unchanged sentences

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

Three Months Ended Nine Months Ended

Basic Earnings per Share

(In thousands except per share data)

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

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Net income $ 463,497 $ 397,579 $ 1,364,025 $ 1,157,277

4 unchanged sentences

Basic earnings per share $ 1.14 $ 0.98 $ 3.37 $ 2.83

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

Diluted Earnings per Share

(In thousands except per share data)

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

February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024

Net income $ 463,497 $ 397,579 $ 1,364,025 $ 1,157,277

8 unchanged sentences

Diluted earnings per share $ 1.13 $ 0.96 $ 3.31 $ 2.79

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.

For the three months ended February 28, 2025 and February 29, 2024, options granted to purchase 1.2 million and 1.9 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share.

For the nine months ended February 28, 2025 and February 29, 2024, options granted to purchase 0.9 million and 1.5 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).

Cintas announced on July 27, 2021, July 26, 2022, and July 23, 2024, that the Board of Directors (the Board) authorized share buyback programs for $ 1.5 billion, $ 1.0 billion and $ 1.0 billion, respectively.

None of the share buyback programs have an expiration date.

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

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

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

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

Three Months Ended Six Months Ended

November 30, 2024 November 30, 2024

Three Months Ended Nine Months Ended

February 28, 2025 February 28, 2025

Buyback Activity

5 unchanged sentences

July 23, 2024 — — — — — —

— $ — $ — 2,732 $ 173.40 $ 473,617

2 unchanged sentences

Total repurchase of Cintas common stock $ 26,611 $ 678,129

Three Months Ended Six Months Ended

November 30, 2023 November 30, 2023

Three Months Ended Nine Months Ended

February 29, 2024 February 29, 2024

Buyback Activity

5 unchanged sentences

July 26, 2022 — — — — — —

July 23, 2024 — — — — — —

— $ — $ — 2,633 $ 121.64 $ 320,266

5 unchanged sentences

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

Three Months Ended Six Months Ended

November 30, 2024 November 30, 2024

Three Months Ended Nine Months Ended

February 28, 2025 February 28, 2025

(In thousands except per share data)

3 unchanged sentences

Non-cash transaction activity 101 $ 196.09 $ 19,637 630 $ 194.15 $ 122,290

Three Months Ended Six Months Ended

November 30, 2023 November 30, 2023

Three Months Ended Nine Months Ended

February 29, 2024 February 29, 2024

per Share Non-Cash

2 unchanged sentences

Non-cash transaction activity 232 $ 149.70 $ 34,723 977 $ 132.17 $ 129,023

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.

There were no share buybacks in the period subsequent to February 28, 2025, through April 3, 2025.

From the inception of the July 26, 2022 share buyback program through April 3, 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 six months ended November 30, 2024, are as follows:

Changes in the carrying amount of goodwill and service contracts by reportable operating segment and All Other for the nine months ended February 28, 2025, are as follows:

(In thousands)

5 unchanged sentences

Foreign currency translation ( 12,983 ) ( 1,204 ) ( 47 ) ( 14,234 )

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

Balance as of February 28, 2025 $ 2,893,034 $ 295,421 $ 165,098 $ 3,353,553

Service Contracts

7 unchanged sentences

Foreign currency translation ( 1,629 ) ( 49 ) — ( 1,678 )

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

Balance as of February 28, 2025 $ 282,808 $ 13,805 $ 18,723 $ 315,336

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

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

As of February 28, 2025 As of May 31, 2024

(In thousands) Carrying

10 unchanged sentences

Other assets $ 1,112,922 $ 668,808 $ 444,114 $ 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 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.

(1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheets as of February 28, 2025 and May 31, 2024, is $ 94.8 million and $ 94.6 million, respectively.

Amortization expense for service contracts and other assets was $ 43.2 million and $ 40.0 million for the three months ended February 28, 2025 and February 29, 2024, respectively.

For the nine months ended February 28, 2025 and February 29, 2024, amortization expense for service contracts and other assets was $ 125.7 million and $ 117.9 million, respectively.

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

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:

As of February 28, 2025, 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 six months) $ 79,222

2025 (remaining three months) $ 39,536

Thereafter 195,163

5 unchanged sentences

Issued Fiscal Year

Maturity November 30,

Maturity February 28,

Debt due within one year

Commercial paper 4.70 % (1)

2025 2025 $ 181,000 $ —

Senior notes (1)

9 unchanged sentences

Total debt due after one year $ 2,027,477 $ 2,025,934

(1) Variable rate debt instrument.

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

(1) 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 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 carrying value and fair value of Cintas' debt as of February 28, 2025 were $ 2,486.6 million and $ 2,455.2 million, respectively, and as of May 31, 2024 were $ 2,486.6 million and $ 2,392.8 million, respectively.

During the nine months ended February 29, 2024, Cintas repurchased, and subsequently retired $ 13.5 million of its 6.15 %, 30-year senior notes.

In conjunction with these transactions, during the nine months ended February 29, 2024, Cintas recognized a loss of $ 0.9 million, 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 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.

As of February 28, 2025 and May 31, 2024, there was no commercial paper outstanding and no borrowings on our revolving credit facility.

The fair value of the commercial paper, which approximates carrying value, is estimated using level 2 inputs based on observable market prices and interest rates.

2 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.

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.

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 February 28, 2025 and February 29, 2024.

For the nine months ended February 28, 2025 and February 29, 2024, the amortization of the interest rate locks resulted in a decrease to other comprehensive income of $ 4.6 million and $ 4.5 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 November 30, 2024 and May 31, 2024.

The aggregate notional value of outstanding cash flow hedges was $ 500.0 million at both February 28, 2025 and May 31, 2024.

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

5 unchanged sentences

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 and six months ended November 30, 2024 or 2023.

These interest rate locks had no impact on net income or cash flows for the three and nine months ended February 28, 2025 or February 29, 2024.

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 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.

As of February 28, 2025 and May 31, 2024, recorded unrecognized tax benefits were $ 40.9 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 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.

Cintas’ effective tax rate was 21.0 % and 19.9 % for the three months ended February 28, 2025 and February 29, 2024, respectively.

For the nine months ended February 28, 2025 and February 29, 2024, Cintas' effective tax rate was 19.2 % and 20.0 %, respectively.

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

2 unchanged sentences

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:

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

2025 February 29,

Uniform Rental and Facility Services 6 7

1 unchanged sentence

All Other 11 8

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

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

(In thousands) February 28,

2025 February 29,

Fair value of tangible assets acquired $ 25,640 $ 14,350

32 unchanged sentences

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

Other comprehensive (loss) income before

reclassifications ( 15,168 ) 5,216 — ( 9,952 )

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 1,523 ) — ( 1,523 )

Net current period other comprehensive (loss) income ( 15,168 ) 3,693 — ( 11,475 )

Balance at February 28, 2025 $ ( 48,295 ) $ 104,745 $ 600 $ 57,050

(In thousands) Foreign

13 unchanged sentences

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

Other comprehensive loss before reclassifications ( 450 ) ( 5,042 ) — ( 5,492 )

Amounts reclassified from accumulated other comprehensive income (loss)

— ( 1,524 ) — ( 1,524 )

Net current period other comprehensive loss ( 450 ) ( 6,566 ) — ( 7,016 )

Balance at February 29, 2024 $ ( 16,630 ) $ 104,509 $ ( 1,556 ) $ 86,323

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

6 unchanged sentences

Statements of Income

Three Months Ended Six Months Ended

(In thousands) November 30,

2024 November 30,

2023 November 30,

2024 November 30,

Three Months Ended Nine Months Ended

(In thousands) February 28,

2025 February 29,

2024 February 28,

2025 February 29,

Amortization of interest

15 unchanged sentences

Other Corporate (1)

For the three months ended November 30, 2024

For the three months ended February 28, 2025

Revenue $ 2,021,144 $ 301,759 $ 286,256 $ — $ 2,609,159

Operating income $ 489,483 $ 71,533 $ 48,837 $ — $ 609,853

For the three months ended November 30, 2023

For the three months ended February 29, 2024

Revenue $ 1,876,642 $ 262,602 $ 266,929 $ — $ 2,406,173

Operating income $ 420,407 $ 57,717 $ 42,676 $ — $ 520,800

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

As of and for the nine months ended February 28, 2025

Revenue $ 5,945,393 $ 893,693 $ 833,443 $ — $ 7,672,529

1 unchanged sentence

Total assets $ 7,879,273 $ 790,137 $ 698,298 $ 243,428 $ 9,611,136

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

As of and for the nine months ended February 29, 2024

Revenue $ 5,554,009 $ 789,696 $ 781,975 $ — $ 7,125,680

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 November 30, 2024.

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

4 unchanged sentences

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).

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 received final approval by the U.S.

District Court for the Southern District of Ohio in August 2024.

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