Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Audited Consolidated Financial Statements for the Years Ended May 31, 2008, 2007 and 2006

	Management’s Report on Internal Control over Financial Reporting.................................................................................................................	32
	Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm..........................................................................................	33
	Consolidated Statements of Income.........................................................................................................................................................................	35
	Consolidated Balance Sheets....................................................................................................................................................................................	36
	Consolidated Statements of Shareholders’ Equity................................................................................................................................................	37
	Consolidated Statements of Cash Flows.................................................................................................................................................................	38
	Notes to Consolidated Financial Statements..........................................................................................................................................................	39

Management’s Report on

Internal Control over Financial Reporting

---

To the Shareholders of Cintas Corporation:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.

With the supervision of our President and Chief Executive Officer and our Chief Financial Officer, management assessed our internal control over financial reporting as of May 31, 2008. Management based its assessment on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management's assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies and our overall control environment. This assessment is supported by testing and monitoring performed by our internal audit function.

Based on our assessment, management has concluded that our internal control over financial reporting was effective as of May 31, 2008, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States.

We reviewed the results of management's assessment with the Audit Committee of our Board of Directors. Additionally, our independent registered public accounting firm, Ernst & Young LLP, audited management's assessment and independently assessed the effectiveness of Cintas Corporation’s internal control over financial reporting. Ernst & Young LLP has issued an attestation report, which is included in this Annual Report.

	/s/	Scott D. Farmer
		Scott D. Farmer
		President and Chief Executive Officer

	/s/	William C. Gale
		William C. Gale
		Senior Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Cintas Corporation:

We have audited Cintas Corporation's internal control over financial reporting as of May 31, 2008, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Cintas Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Cintas Corporation maintained, in all material respects, effective internal control over financial reporting as of May 31, 2008, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Cintas Corporation as of May 31, 2008 and 2007, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended May 31, 2008, of Cintas Corporation, and our report dated July 25, 2008, expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Cincinnati, Ohio

July 25, 2008

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Cintas Corporation:

We have audited the accompanying consolidated balance sheets of Cintas Corporation as of May 31, 2008 and 2007, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended May 31, 2008. These financial statements are the responsibility of Cintas Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cintas Corporation at May 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended May 31, 2008, in conformity with U.S. generally accepted accounting principles.

As described in Note 1 to the consolidated financial statements, in fiscal 2008, Cintas Corporation adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement 109.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cintas Corporation’s internal control over financial reporting as of May 31, 2008, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated July 25, 2008, expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

Cincinnati, Ohio

July 25, 2008

Consolidated

Statements of Income

		Years Ended May 31,
(In thousands except per share data)		2008				2007				2006
Revenue:
Rental uniforms and ancillary products		$	2,834,568			$	2,734,629			$	2,568,776
Other services			1,103,332				972,271				834,832
			3,937,900				3,706,900				3,403,608
Costs and expenses (income):
Cost of rental uniforms and ancillary products			1,581,618				1,515,185				1,406,829
Cost of other services			674,682				610,360				541,987
Selling and administrative expenses			1,104,145				1,003,958				911,750
Operating income			577,455				577,397				543,042
Interest income			(6,072	)			(6,480	)			(6,759	)
Interest expense			52,823				50,324				31,782
Income before income taxes			530,704				533,553				518,019
Income taxes			195,299				199,015				194,637
Net income		$	335,405			$	334,538			$	323,382
Basic earnings per share		$	2.15			$	2.09			$	1.93
Diluted earnings per share		$	2.15			$	2.09			$	1.92
Dividends declared and paid per share		$	0.46			$	0.39			$	0.35

See accompanying notes.

Consolidated

Balance Sheets

		As of May 31,
(In thousands except share data)		2008				2007
Assets
Current assets:
Cash and cash equivalents		$	66,224			$	35,360
Marketable securities			125,471				120,053
Accounts receivable, principally trade, less allowance of $13,139 and $14,486, respectively			430,078				408,870
Inventories, net			238,669				231,741
Uniforms and other rental items in service			370,416				344,931
Deferred tax asset			39,410				—
Prepaid expenses			12,068				15,781
Total current assets			1,282,336				1,156,736
Property and equipment, at cost, net			974,575				920,243
Goodwill			1,315,569				1,245,877
Service contracts, net			152,757				171,361
Other assets, net			83,364				76,263
		$	3,808,601			$	3,570,480
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	94,755			$	64,622
Accrued compensation and related liabilities			50,605				62,826
Accrued liabilities			207,925				200,686
Income taxes:
Current			12,887				18,584
Deferred			—				52,179
Long-term debt due within one year			1,070				4,141
Total current liabilities			367,242				403,038
Long-term liabilities:
Long-term debt due within one year			942,736				877,074
Deferred income taxes			124,184				122,630
Accrued liabilities			120,308				—
Total long-term liabilities			1,187,228				999,704
Shareholders' equity:
Preferred stock, no par value: 100,000 shares authorized, none outstanding			—				—
Common stock, no par value: 425,000,000 shares authorized 2008: 173,083,426 shares issued and 153,691,103 shares outstanding 2007: 172,874,195 shares issued and 158,676,872 shares outstanding			129,182				120,811
Paid-in capital			60,408				56,909
Retained earnings			2,784,302				2,533,459
Treasury stock: 2008: 19,392,323 shares 2007: 14,197,323 shares			(772,041	)			(580,562	)
Other accumulated comprehensive income (loss):
Foreign currency translation			61,206				41,815
Unrealized loss on derivatives			(8,815	)			(4,421	)
Unrealized loss on available-for-sale securities			(111	)			(273	)
Total shareholders' equity			2,254,131				2,167,738
		$	3,808,601			$	3,570,480

See accompanying notes.

Consolidated Statements of Shareholders’ Equity

(In thousands)	Common Stock		Paid-In Capital	Retained Earnings	Other Accumulated Comprehensive Income (Loss)			Total Shareholders’ Equity
Treasury Stock
Shares	Amount	Shares	Amount

Balance at June 1, 2005			172,128			$	95,546			$	58,631			$	1,996,425			$	12,176				(1,469	)		$	(58,204	)		$	2,104,574
Net income			—				—				—				323,382				—				—				—				323,382
Equity adjustment for foreign currency translation			—				—				—				—				20,882				—				—				20,882
Change in fair value of derivatives, net of $5,985 of tax			—				—				—				—				10,481				—				—				10,481
Change in fair value of available-for-sale securities, net of ($674) of tax			—				—				—				—				(1,155	)			—				—				(1,155	)
Comprehensive income, net of tax																															353,590
Dividends			—				—				—				(58,823	)			—				—				—				(58,823	)
Effects of acquisitions			—				—				—				(67	)			—				—				—				(67	)
Stock-based compensation			—				—				5,277				—				—				—				—				5,277
Stock options exercised, net of shares surrendered			443				14,402				(5,352	)			—				—				—				—				9,050
Repurchase of common stock			—				—				—				—				—				(7,920	)			(323,409	)			(323,409	)
Balance at May 31, 2006			172,571				109,948				58,556				2,260,917				42,384				(9,389	)			(381,613	)			2,090,192
Net income			—				—				—				334,538				—				—				—				334,538
Equity adjustment for foreign currency translation			—				—				—				—				7,426				—				—				7,426
Change in fair value of derivatives, net of $8,196 of tax			—				—				—				—				(13,571	)			—				—				(13,571	)
Change in fair value of available-for-sale securities, net of $522 of tax			—				—				—				—				882				—				—				882
Comprehensive income, net of tax																															329,275
Dividends			—				—				—				(61,996	)			—				—				—				(61,996	)
Stock-based compensation			—				—				4,500				—				—				—				—				4,500
Stock options exercised, net of shares surrendered			303				10,863				(6,147	)			—				—				—				—				4,716
Repurchase of common stock			—				—				—				—				—				(4,808	)			(198,949	)			(198,949	)
Balance at May 31, 2007			172,874				120,811				56,909				2,533,459				37,121				(14,197	)			(580,562	)			2,167,738
Net income			—				—				—				335,405				—				—				—				335,405
Equity adjustment for foreign currency translation			—				—				—				—				19,391				—				—				19,391
Change in fair value of derivatives, net of $2,924 of tax			—				—				—				—				(4,394	)			—				—				(4,394	)
Change in fair value of available-for-sale securities, net of $98 of tax			—				—				—				—				162				—				—				162
Comprehensive income, net of tax																															350,564
FIN 48 adjustment			—				—				—				(13,731	)			—				—				—				(13,731	)
Dividends			—				—				—				(70,831	)			—				—				—				(70,831	)
Stock-based compensation			—				—				7,456				—				—				—				—				7,456
Stock options exercised, net of shares surrendered			209				8,371				(3,957	)			—				—				—				—				4,414
Repurchase of common stock			—				—				—				—				—				(5,195	)			(191,479	)			(191,479	)
Balance at May 31, 2008			173,083			$	129,182			$	60,408			$	2,784,302			$	52,280				(19,392	)		$	(772,041	)		$	2,254,131

See accompanying notes.

Consolidated

Statements of Cash Flows

		Years Ended May 31,
(In thousands)		2008				2007				2006
Cash flows from operating activities:
Net income		$	335,405			$	334,538			$	323,382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			148,566				135,181				127,117
Amortization of deferred charges			43,337				40,745				33,536
Stock-based compensation			7,456				4,500				4,725
Deferred income taxes			1,663				(332	)			(52	)
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable			(14,939	)			(11,460	)			(44,154	)
Inventories			(6,100	)			(32,090	)			22,033
Uniforms and other rental items in service			(23,854	)			(6,968	)			(26,683	)
Prepaid expenses			3,830				(4,502	)			(2,305	)
Accounts payable			30,567				(7,654	)			2,329
Accrued compensation and related liabilities			(12,430	)			12,600				11,424
Accrued liabilities and other			22,201				9,981				(1,905	)
Income taxes payable			8,841				(25,148	)			11,578
Net cash provided by operating activities			544,543				449,391				461,025
Cash flows from investing activities:
Capital expenditures			(190,333	)			(180,824	)			(156,632	)
Proceeds from sale or redemption of marketable securities			45,791				118,174				87,477
Purchase of marketable securities and investments			(54,498	)			(48,515	)			(31,932	)
Acquisitions of businesses, net of cash acquired			(111,535	)			(160,707	)			(346,363	)
Other			(400	)			(1,836	)			7,404
Net cash used in investing activities			(310,975	)			(273,708	)			(440,046	)
Cash flows from financing activities:
Proceeds from issuance of debt			295,000				252,460				333,500
Repayment of debt			(232,409	)			(169,987	)			(7,303	)
Stock options exercised			8,371				10,863				14,402
Dividends paid			(70,831	)			(61,996	)			(58,823	)
Repurchase of common stock			(191,479	)			(198,949	)			(323,409	)
Other			(11,356	)			(11,628	)			16,372
Net cash used in financing activities			(202,704	)			(179,237	)			(25,261	)
Net increase (decrease) in cash and cash equivalents			30,864				(3,554	)			(4,282	)
Cash and cash equivalents at beginning of year			35,360				38,914				43,196
Cash and cash equivalents at end of year		$	66,224			$	35,360			$	38,914

See accompanying notes.

Notes to Consolidated Financial Statements

(Amounts in thousands except per share and share data)

1.	Significant Accounting Policies

Business description. Cintas Corporation (Cintas) provides highly specialized products and services to businesses of all types throughout the United States and Canada. Cintas is North America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom products and services, first aid, safety and fire protection products and services, document management services and branded promotional products. Our products and services are designed to enhance our customers’ images and to provide additional safety and protection in the workplace.

Cintas historically classified its businesses into two operating segments, Rentals and Other Services. The Rentals operating segment reflects the rental and servicing of uniforms and other garments, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom and hygiene products and services are also provided within this operating segment. Effective June 1, 2007, this operating segment has been renamed Rental Uniforms and Ancillary Products.

The Other Services operating segment historically consisted of the direct sale of uniforms and related items, first aid, safety and fire protection products and services, document management services and branded promotional products. Effective June 1, 2007, the Other Services operating segment was separated into three reportable operating segments – Uniform Direct Sales operating segment, First Aid, Safety and Fire Protection Services operating segment and Document Management Services operating segment. This change provides more visibility to these operating segments as they continue to grow and have a larger impact on Cintas’ consolidated results of operations. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of document shredding and document storage services.

Principles of consolidation. The consolidated financial statements include the accounts of Cintas, controlled majority-owned subsidiaries and any entities that are not controlled but require consolidation in accordance with Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities - an interpretation of ARB No. 51 (collectively, Cintas). Intercompany balances and transactions have been eliminated.

Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue recognition. Rental revenue, which is recorded in the Rentals Uniforms and Ancillary Products operating segment, is recognized when services are performed. Other services revenue, which is recorded in the Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services operating segments, is recognized when either services are performed or when products are shipped and the title and risks of ownership pass to the customer.

Cost of rental uniforms and ancillary products. Cost of rental uniforms and ancillary products consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other rental items. The Rental Uniforms and Ancillary Products operating segment inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution are included in the cost of rentals.

Cost of other services. Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and distribution expenses. Cost of other services includes inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution are included in the cost of other services.

Selling and administrative expenses. Selling and administrative expenses consist primarily of sales labor and commissions, management and administrative labor, payroll taxes, medical expense, insurance expense, legal and professional costs and amortization of intangible assets.

Cash and cash equivalents. Cintas considers all highly liquid investments with a maturity of three months or less, at date of purchase, to be cash equivalents.

Marketable securities. All marketable securities are comprised of debt securities and classified as available-for-sale.

Accounts receivable. Accounts receivable is comprised of amounts owed through product shipments and are presented net of an allowance for doubtful accounts. This allowance is an estimate based on historical rates of collectibility. The allowance for doubtful accounts is recorded for overdue amounts, beginning with a nominal percentage and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Rental Uniforms and Ancillary Products operating segment and the three other operating segments because of differences in customers served and the nature of each segment. When an account is considered uncollectible, it is written off against this allowance.

Inventories. Inventories are valued at the lower of cost (first-in, first-out) or market. Substantially all inventories represent finished goods.

Uniforms and other rental items in service. These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant garments) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, cleanroom garments, flame resistant garments, linens and restroom dispensers, are amortized over their useful lives which range from 8 to 48 months.

Property and equipment. Property and equipment is stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method primarily over the following estimated useful lives, in years:

Buildings	30 to 40
Building improvements	5 to 20
Equipment	3 to 10
Leasehold improvements	2 to 5

Long-lived assets. When events or circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated future cash flows (undiscounted) are compared to the carrying amount of the assets. If the estimated future cash flows are less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined by discounted cash flows or appraised values, as appropriate. Long-lived assets that are held for disposal are reported at the lower of the carrying amount or the fair value, less estimated costs related to disposition.

Goodwill. As required under Statement of Financial Accounting Standards No. 142 (FAS 142), Goodwill and Other Intangible Assets, goodwill is separately disclosed from other intangible assets on the consolidated balance sheet and not amortized, but is tested for impairment on an operating segment basis on at least an annual basis. Cintas completes an annual goodwill impairment test as required by FAS 142. Based on the results of the impairment tests, Cintas was not required to recognize an impairment of goodwill for the years ended May 31, 2008, 2007 or 2006. Cintas will continue to perform future impairment tests as required by FAS 142 as of March 1 in future years or when indicators of impairment are noted.

Service contracts and other assets. Service contracts and other assets, which consist primarily of noncompete and consulting agreements obtained through acquisitions of businesses, are amortized by use of the straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years.

Accrued liabilities. Current accrued liabilities consist primarily of insurance, medical and profit sharing obligations and legal and environmental contingencies. These are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Long-term liabilities consist primarily of reserves associated with unrecognized tax benefits, which are described in more detail in Note 7 entitled Income Taxes.

Stock-based compensation. As required under Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, compensation expense is recognized for all share-based payments to employees, including stock options, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Measured compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award.

See Note 11 entitled Stock-Based Compensation for further information.

Derivatives and hedging activities. Derivatives and hedging activities are presented in accordance with Statement of Financial Accounting Standards No. 133 (FAS 133), Accounting for Derivatives and Hedging Activities, as amended. FAS 133 requires the recognition of all derivatives on the consolidated balance sheet at fair value and recognition of the resulting gains or losses as adjustments to earnings or other comprehensive income.

Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Cintas’ hedging activities are transacted only with highly rated institutions, reducing the exposure to credit risk in the event of nonperformance.

See Note 5 entitled Long-Term Debt for further information on derivatives.

Fair value of financial instruments. The following methods and assumptions were used by Cintas in estimating the fair value of financial instruments:

Cash and cash equivalents. The amounts reported approximate market value.

Marketable securities. The amounts reported are at market value. Market values are based on quoted market prices.

Long-term debt. The amounts reported are at a carrying value which approximates market value. Market values are determined using similar debt instruments currently available to Cintas that are consistent with the terms, interest rates and maturities.

Reclassification. Certain prior year amounts have been reclassified to conform to current year presentation.

Other accounting pronouncements. As of June 1, 2007, Cintas adopted FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (FAS 109), which clarifies the accounting for uncertainty in income taxes recognized in the consolidated financial statements in accordance with FAS 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation of FIN 48, Cintas recorded a decrease to retained earnings as of June 1, 2007, of $13,731. Cintas’ adoption of FIN 48 is more fully described in Note 7 entitled Income Taxes.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (FAS 157), which defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosure requirements about fair value measurements. Cintas will adopt FAS 157 in the first quarter of fiscal 2009. In February 2008, the FASB released a FASB Staff Position (FSP FAS 157-2, Effective Date of FASB Statement No. 157) which delayed the effective date of FAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of FAS 157 for our financial assets and liabilities will not have a material impact upon adoption.

In December 2007, the FASB issued Statement No. 141 (revised 2007), Business Combinations (FAS 141(R)). Under FAS 141(R), an entity is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. It further requires that acquisition-related costs be recognized separately from the acquisition and expensed as incurred, restructuring costs generally be expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the measurement period impact income tax expense. For Cintas, FAS 141(R) is effective for acquisitions and adjustments to an acquired entity’s deferred tax asset and liability balances occurring after May 31, 2009. Cintas is currently evaluating the future impact and disclosures under FAS 141(R).

2. Marketable Securities

All marketable securities are comprised of debt securities and classified as available-for-sale. Interest, realized gains and losses and declines in value determined to be other than temporary on available-for-sale securities are included in interest income. The cost of the securities sold is based on the specific identification method.

The following is a summary of marketable securities:

		2008								2007
		Cost				Estimated Fair Value				Cost				Estimated Fair Value
Obligations of state and political subdivisions		$	—			$	—			$	24,480			$	24,415
U.S. government agency securities			—				—				12,336				12,231
Canadian treasury securities			125,626				125,471				76,995				76,753
Other debt securities			—				—				6,665				6,654
		$	125,626			$	125,471			$	120,476			$	120,053

As of May 31, 2008, all marketable securities are concentrated in Canada and consist primarily of Canadian federal treasury bills and Canadian federal treasury bonds. These funds are not expected to be repatriated, but instead are expected to be invested indefinitely in foreign subsidiaries.

The gross realized gains on sales of available-for-sale securities totaled $4, $9 and $3 for the years ended May 31, 2008, 2007 and 2006, respectively, and the gross realized losses totaled $12, $42 and $219, respectively. Net unrealized losses are $155 and $423 at May 31, 2008 and 2007, respectively.

Purchases of marketable securities were $43,750, $30,829 and $25,613 for the years ended May 31, 2008, 2007 and 2006, respectively.

The cost and estimated fair value of debt securities at May 31, 2008, by contractual maturity, are $125,626 and $125,471, respectively. All contractual maturities are due within one year.

3. Property and Equipment

		2008				2007
Land		$	94,539			$	79,572
Buildings and improvements			462,799				438,680
Equipment			1,029,048				884,574
Leasehold improvements			16,700				13,171
Construction in progress			104,704				99,195
			1,707,790				1,515,192
Less: accumulated depreciation			733,215				594,949
		$	974,575			$	920,243

Interest expense is net of capitalized interest of $1,090, $490 and $384 for the years ended May 31, 2008, 2007 and 2006, respectively.

4. Goodwill, Service Contracts and Other Assets

Changes in the carrying amount of goodwill and service contracts for the years ended May 31, 2008 and 2007, by operating segment, are as follows:

Goodwill		Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Total
Balance as of June 1, 2006		$	855,135			$	23,862			$	137,917			$	119,261			$	1,136,175
Goodwill acquired			7,697				—				24,104				77,264				109,065
Foreign currency translation			487				21				—				129				637
Balance as of May 31, 2007			863,319				23,883				162,021				196,654				1,245,877
Goodwill (adj.) acquired			(1,034	)			—				3,523				64,808				67,297
Foreign currency translation			1,296				73				—				1,026				2,395
Balance as of May 31, 2008		$	863,581			$	23,956			$	165,544			$	262,488			$	1,315,569

Service Contracts		Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Total
Balance as of June 1, 2006		$	121,455			$	1,076			$	42,761			$	14,673			$	179,965
Service contracts acquired			3,936				—				8,147				10,550				22,633
Service contracts amortization			(21,759	)			(388	)			(5,556	)			(4,222	)			(31,925	)
Foreign currency translation			653				11				—				24				688
Balance as of May 31, 2007			104,285				699				45,352				21,025				171,361
Service contracts (adj.) acquired			(19	)			—				2,682				11,227				13,890
Service contracts amortization			(21,510	)			(401	)			(6,090	)			(6,502	)			(34,503	)
Foreign currency translation			1,818				30				—				161				2,009
Balance as of May 31, 2008		$	84,574			$	328			$	41,944			$	25,911			$	152,757

Information regarding Cintas' service contracts and other assets follows:

		As of May 31, 2008
		Carrying Amount				Accumulated Amortization				Net
Service contracts		$	333,543			$	180,786			$	152,757
Noncompete and consulting agreements		$	63,894			$	34,625			$	29,269
Investments			46,012				—				46,012
Other			10,790				2,707				8,083
Total		$	120,696			$	37,332			$	83,364

		As of May 31, 2007
		Carrying Amount				Accumulated Amortization				Net
Service contracts		$	317,644			$	146,283			$	171,361
Noncompete and consulting agreements		$	58,218			$	24,123			$	34,095
Investments			35,264				—				35,264
Other			8,967				2,063				6,904
Total		$	102,449			$	26,186			$	76,263

Amortization expense was $43,337, $40,745 and $33,536 for the years ended May 31, 2008, 2007 and 2006, respectively. Estimated amortization expense, excluding any future acquisitions, for each of the next five years is $41,532, $38,286, $34,519, $28,412 and $12,639, respectively.

5.	Long-Term Debt

		2008				2007
Unsecured term notes due through 2036 at an average rate of 6.11%		$	779,652			$	705,147
Unsecured notes due through 2009 at an average rate of 2.19%			163,005				170,866
Industrial development revenue bonds			—				3,441
Other			1,149				1,761
			943,806				881,215
Less: amounts due within one year			1,070				4,141
		$	942,736			$	877,074

Long-term debt in the amount of $1,149 is secured by assets with a carrying value of $1,042 at May 31, 2008. Cintas has $74,764 of letters of credit outstanding at May 31, 2008. Maturities of long-term debt during each of the next five years are $1,070, $703, $163,729, $762 and $225,756, respectively.

Interest paid, net of amount capitalized, was $49,707, $45,805 and $30,714 for the years ended May 31, 2008, 2007 and 2006, respectively.

Cintas has a commercial paper program supported by a $600,000 long-term credit facility. As of May 31, 2008, there was $163,000 of commercial paper outstanding. Because Cintas’ commercial paper program expires in fiscal 2011, the $163,000 outstanding balance is classified as long-term debt on the balance sheet.

During the third quarter of fiscal 2008, Cintas issued $300,000 of senior notes due 2017. These senior notes bear an interest rate of 6.125%, paid semi-annually beginning June 1, 2008. The proceeds generated from the offering were used to reduce borrowings under our commercial paper program.

Cintas periodically uses cash flow hedges to hedge the exposure of variability in short-term interest rates. These agreements effectively convert a portion of the floating rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. The effective portion of the net gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains or losses on the ineffective portion of the hedge are charged to earnings in the current period. When outstanding, the effectiveness of these derivative instruments is reviewed at least every fiscal quarter. Examples of cash flow hedging instruments that Cintas may use are interest rate swaps, lock agreements and forward starting swaps. There were no interest rate swaps, lock agreements or forward starting swaps outstanding as of May 31, 2008.

During the third quarter of fiscal 2006, Cintas entered into a forward starting swap to protect forecasted interest payments from interest rate movement in anticipation of a $200,000, 30-year debt issuance in early fiscal 2008. During the fourth quarter of fiscal 2007, Cintas changed its intent on issuing this 30-year debt. This decision was based on current market conditions and interest rate environment as well as the additional payment flexibility provided to Cintas under its commercial paper program. As a result of this decision, Cintas terminated the forward starting swap and recorded the resulting $6,200 gain in fiscal 2007 as a reduction to administrative expenses.

Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2002 and in fiscal 2007. The amortization of the cash flow hedges resulted in a credit to other comprehensive income of $521, $384 and $290 for the years ended May 31, 2008, 2007 and 2006, respectively.

Cintas has certain significant covenants related to debt agreements. These covenants limit Cintas’ ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas’ assets. These covenants also require Cintas to maintain certain debt to capitalization and interest coverage ratios. Cross default provisions exist between certain debt instruments. Cintas is in compliance with all of the significant debt covenants for all periods presented. If a default of a significant covenant were to occur, the

default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas’ debt, net of cash and marketable securities, is $752,111 as of May 31, 2008. For fiscal 2008, net cash provided by operating activities was $544,543. Capital expenditures were $190,333 for the same period.

6.	Leases

Cintas conducts certain operations from leased facilities and leases certain equipment. Most leases contain renewal options for periods from 1 to 10 years. The lease agreements provide for increases in rent expense if the options are exercised based on increases in certain price level factors or other prearranged factors. Step rent provisions, escalation clauses, capital improvements funding and other lease concessions are taken into account in computing minimum lease payments. Minimum lease payments are recognized on a straight-line basis over the minimum lease term. Lease payments are not dependent on an existing index or rate and are not included in minimum lease payments. It is anticipated that expiring leases will be renewed or replaced.

The minimum rental payments under noncancelable lease arrangements for each of the next five years and thereafter are $24,241, $19,887, $15,352, $10,708, $7,326 and $13,714, respectively. Rent expense under operating leases during the years ended May 31, 2008, 2007 and 2006, was $34,996, $33,268 and $30,136, respectively.

7.	Income Taxes

		2008				2007				2006
Income before income taxes consist of the following components:
U.S. operations		$	476,279			$	488,011			$	479,427
Foreign operations			54,425				45,542				38,592
		$	530,704			$	533,553			$	518,019

		2008				2007				2006
Income taxes consist of the following components:
Current:
Federal		$	171,927			$	184,363			$	180,697
State and local			17,225				16,181				15,026
			189,152				200,544				195,723
Deferred			6,147				(1,529	)			(1,086	)
		$	195,299			$	199,015			$	194,637

		2008				2007				2006
Reconciliation of income tax expense using the statutory rate and actual income tax expense is as follows:
Income taxes at the U.S. federal statutory rate		$	185,746			$	186,744			$	182,635
State and local income taxes, net of federal benefit			12,832				10,602				11,917
Other			(3,279	)			1,669				85
		$	195,299			$	199,015			$	194,637

The components of deferred income taxes included on the consolidated balance sheets are as follows:

		2008				2007
Deferred tax assets:
Employee benefits		$	8,100			$	6,195
Allowance for doubtful accounts			4,589				5,100
Inventory obsolescence			8,793				9,735
Insurance and contingencies			10,753				10,222
Other			16,820				11,909
			49,055				43,161
Deferred tax liabilities:
In service inventory			8,248				88,838
Property			66,339				69,189
Intangibles			51,993				45,233
Other			1,187				1,231
State taxes			6,062				13,479
			133,829				217,970
Net deferred tax liability		$	84,774			$	174,809

Income taxes paid were $180,634, $220,740 and $183,268 for the years ended May 31, 2008, 2007 and 2006, respectively.

Cintas has undistributed earnings of foreign subsidiaries of approximately $184,551 at May 31, 2008, for which deferred taxes have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiaries. If such earnings were repatriated, additional tax expense may result. The current calculation of such additional taxes is not practicable.

As described in Note 1 entitled Significant Accounting Policies, Cintas adopted FIN 48 in fiscal 2008. FIN 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

As a result of the adoption of FIN 48, Cintas recorded a decrease to retained earnings as of June 1, 2007, and a corresponding increase in long-term accrued liabilities of $13,731, inclusive of associated interest and penalties.

As of June 1, 2007 and May 31, 2008, there was $27,580 and $27,861, respectively, in total unrecognized tax benefits, which if recognized, would favorably impact Cintas’ effective tax rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of these items in prior reporting periods. The total amount accrued for interest and penalties as of June 1, 2007, was $15,173. Cintas records the tax liability under FIN 48 in both current and long-term accrued liabilities on the consolidated balance sheets. Portions of the long-term liability, particularly parts related to in service inventory deferred tax liabilities, had been recorded in the net deferred tax liability in fiscal 2007. The total gross unrecognized tax benefits as of June 1, 2007, were $112,658.

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. During fiscal 2008, unrecognized tax benefits related to continuing operations increased by approximately $2,770 and accrued interest increased by approximately $487.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at June 1, 2007		$	112,658
Additions based on tax positions related to the current year			1,554
Additions for tax positions of prior years			4,465
Reductions for tax positions of prior years			—
Settlements			(87	)
Statute expirations			(3,261	)
Balance at May 31, 2008		$	115,329

The majority of Cintas’ operations are in the United States and Canada. Cintas is required to file federal income tax returns as well as state income tax returns in a majority of the domestic states and also in the Canadian provinces of Quebec, Alberta, British Columbia and Ontario. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas’ accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of operations in any given period.

All U.S. federal income tax returns are closed to audit through fiscal 2004. Cintas is currently in advanced stages of various audits in certain foreign jurisdictions and certain domestic states. The years under audit cover fiscal years back to 1999. Based on the resolution of the various audits, it is reasonably possible that the balance of unrecognized tax benefits could decrease by $2,852 for the fiscal year ended May 31, 2008.

8.	Acquisitions

For all acquisitions accounted for as purchases, the purchase price paid for each has been allocated to the fair value of the assets acquired and liabilities assumed. During fiscal 2008, Cintas acquired one Rental Uniforms & Ancillary Products operating segment business, nine First Aid, Safety and Fire Protection Services operating segment businesses and twenty Document Management Services operating segment businesses. During fiscal 2007, Cintas acquired three Rental Uniforms & Ancillary Products operating segment businesses, thirteen First Aid, Safety and Fire Protection Services operating segment businesses and sixteen Document Management Services operating segment businesses. The following summarizes the aggregate purchase price for all businesses acquired:

		2008				2007
Fair value of tangible assets acquired		$	13,587			$	20,375
Fair value of goodwill acquired			67,758				109,065
Fair value of service contracts acquired			13,596				22,271
Fair value of other intangibles acquired			5,429				13,149
Total fair value of assets acquired			100,370				164,860
Fair value of liabilities assumed and incurred			(11,165	)			3,288
Total cash paid for acquisitions		$	111,535			$	161,572

The results of operations for the acquired businesses are included in the consolidated statements of income from the dates of acquisition. The pro forma revenue, net income and earnings per share information relating to acquired businesses are not presented because they are not significant.

9.	Defined Contribution Plans

Cintas' Partners' Plan (the Plan) is a non-contributory profit sharing plan and Employee Stock Ownership Plan (ESOP) for the benefit of substantially all U.S. Cintas employees who have completed one year of service. The Plan also includes a 401(k) savings feature covering substantially all employees. The amounts of contributions to the Plan and ESOP, as well as the matching contribution to the 401(k), are made at the discretion of Cintas. Total contributions, including Cintas' matching contributions, which approximate cost, were $28,700, $27,900 and $26,500 for the years ended May 31, 2008, 2007 and 2006, respectively.

Cintas also has a non-contributory deferred profit sharing plan (DPSP), which covers substantially all Canadian employees. In addition, a registered retirement savings plan (RRSP) is offered to those employees. The amounts of contributions to the DPSP, as well as the matching contribution to the RRSP, are made at the discretion of Cintas. Total contributions, which approximate cost, were $1,500, $1,239 and $1,144 for the years ended May 31, 2008, 2007 and 2006, respectively.

10.	Earnings per Share

Earnings per share are computed in accordance with Statement of Financial Accounting Standards No. 128, Earnings per Share. The basic computations are based on the weighted average number of common shares outstanding during each period. The diluted computations reflect the potential dilution that could occur if stock options were exercised into common stock, under certain circumstances, that then would share in the earnings of Cintas.

The following table represents a reconciliation of the shares used to calculate basic and diluted earnings per share for the respective years:

		2008				2007				2006
Numerator:
Net income		$	335,405			$	334,538			$	323,382
Denominator:
Denominator for basic earnings per share – weighted average shares (000's)			155,678				159,769				167,951
Effect of dilutive securities – employee stock options (000's)			252				418				594
Denominator for diluted earnings per share – adjusted weighted average shares and assumed conversions (000's)			155,930				160,187				168,545
Basic earnings per share		$	2.15			$	2.09			$	1.93
Diluted earnings per share		$	2.15			$	2.09			$	1.92

11.	Stock-Based Compensation

Under the 2005 Equity Compensation Plan adopted by Cintas in fiscal 2006, Cintas may grant officers and key employees equity compensation in the form of stock options, stock appreciation rights, restricted and unrestricted stock awards, performance awards and other stock unit awards up to an aggregate of 14,000,000 shares of Cintas' common stock. The compensation cost charged against income was $7,456, $4,500 and $5,277 for the years ended May 31, 2008, 2007 and 2006, respectively. The amount recorded in fiscal 2007 reflects a cumulative catch-up adjustment of $2,169 ($2,088 after tax), due to a change in the estimated forfeitures for certain existing stock option and restricted stock grants. Basic and diluted earnings per share for the year ended May 31, 2007, are both $.01 higher, respectively, due to this change in estimated forfeitures. The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements was $2,022, $1,413 and $552 for the years ended May 31, 2008, 2007 and 2006, respectively.

Stock Options

Stock options are granted at the fair market value of the underlying common stock on the date of grant. The option terms are determined by the Compensation Committee of the Board of Directors, but no stock option may be exercised later than 10 years after the date of the grant. The option awards generally have 10-year terms with graded vesting in years 5 through 10 based on continuous service during that period. Cintas recognizes compensation expense for these options using the straight-line recognition method over the vesting period.

The fair value of these options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

		2008				2007				2006
Risk-free interest rate			4.50%				4.00%				4.00%
Dividend yield			.80%				.70%				.50%
Expected volatility of Cintas' common stock			30%				35%				35%
Expected life of the option in years			8.5				7.5				9.0

The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The determination of expected volatility is based on historical volatility of Cintas common stock over the period commensurate with the expected term of stock options, as well as other relevant factors. The weighted average expected term was determined based on the historical employee exercise behavior of the options. The weighted-average fair value of stock options granted during fiscal 2008, 2007 and 2006 was $15.89, $16.01 and $20.95, respectively.

The information presented in the following table relates primarily to stock options granted and outstanding under either the plan adopted in fiscal 2006 or under previously adopted plans:

		Shares				Weighted Average Exercise Price
Outstanding May 31, 2005 (3,086,485 shares exercisable)			6,441,885			$	37.92
Granted			1,248,450				43.96
Cancelled			(637,502	)			41.38
Exercised			(517,429	)			20.86
Outstanding May 31, 2006 (2,718,180 shares exercisable)			6,535,404				40.08
Granted			1,226,855				38.05
Cancelled			(720,927	)			41.47
Exercised			(392,728	)			22.40
Outstanding May 31, 2007 (2,316,157 shares exercisable)			6,648,604				40.60
Granted			1,005,200				30.99
Cancelled			(745,197	)			40.15
Exercised			(259,839	)			24.07
Outstanding May 31, 2008 (2,041,837 shares exercisable)			6,648,768			$	39.85

The intrinsic value of stock options exercised during fiscal 2008 was $3,671. The total cash received from employees as a result of employee stock option exercises for the years ended May 31, 2008, 2007 and 2006 was $4,430, $5,023 and $7,680, respectively.

The fair value of stock options vested during fiscal 2008 is $2,069.

The following table summarizes the information related to stock options outstanding at May 31, 2008:

												Outstanding Options								Exercisable Options
Range of Exercise Prices								Number Outstanding				Average Remaining Option Life				Weighted Average Exercise Price				Number Exercisable				Weighted Average Exercise Price
$	27.85	–		$	39.19				1,693,310				7.63			$	32.28				260,575			$	32.00
	39.29	–			41.65				1,710,806				5.82				40.29				503,360				41.62
	41.72	–			44.33				1,874,302				4.59				42.28				752,452				42.39
	44.43	–			53.19				1,370,350				5.67				45.71				525,450				47.73
$	27.85	–		$	53.19				6,648,768				5.90			$	39.85				2,041,837			$	42.25

At May 31, 2008, the aggregate intrinsic value of stock options outstanding and exercisable was $25 and $0, respectively.

The weighted-average remaining contractual term of stock options exercisable is 2.9 years.

Restricted Stock Awards

Restricted stock awards will consist of Cintas’ common stock which is subject to such conditions, restrictions and limitations as the Compensation Committee of the Board of Directors determines to be appropriate. The vesting period is generally three years after the grant date. The recipient of restricted stock awards will have all rights of a shareholder of Cintas, including the right to vote and the right to receive cash dividends, during the vesting period.

The information presented in the following table relates to restricted stock awards granted and outstanding under the plan adopted in fiscal 2006:

		Shares				Weighted Average Fair Value
Outstanding, unvested grants at May 31, 2005			—				—
Granted			128,075			$	36.08
Cancelled			—				—
Vested			—				—
Outstanding, unvested grants at May 31, 2006			128,075				36.08
Granted			251,011				38.11
Cancelled			(49,662	)			37.92
Vested			—				—
Outstanding, unvested grants at May 31, 2007			329,424				37.35
Granted			240,086				30.05
Cancelled			(35,879	)			38.16
Vested			—				—
Outstanding, unvested grants at May 31, 2008			533,631			$	34.01

The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2008, was approximately $42,970, and the weighted-average period of time over which this cost will be recognized is 3.8 years.

Cintas reserves shares of common stock to satisfy share option exercises and/or future restricted stock grants. At May 31, 2008, 12,622,773 shares of common stock are reserved for future issuance under the 2005 plan.

12.	Litigation and Other Contingencies

Cintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. 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 financial position or results of operations of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.

Cintas is a defendant in a purported class action lawsuit, Paul Veliz, et al. v. Cintas Corporation, filed on March 19, 2003, in the United States District Court, Northern District of California, Oakland Division, alleging that Cintas violated certain federal and state wage and hour laws applicable to its service sales representatives, whom Cintas considers exempt employees, and asserting additional related ERISA claims. On August 23, 2005, an amended complaint was filed alleging additional state law wage and hour claims under the following state laws: Arkansas, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, Washington, West Virginia and Wisconsin. The plaintiffs are seeking unspecified monetary damages, injunctive relief or both. Cintas denies these claims and is defending the plaintiffs’ allegations. On February 14, 2006, the court ordered a majority of the opt-in plaintiffs to arbitrate their claims in accordance with the terms of their Cintas employment agreement. On February 14, 2006, the court also permitted plaintiffs to file

a second amended complaint alleging state law claims in the 15 states listed above only with respect to the putative class members that may litigate their claims in court. No determination has been made by the court or an arbitrator regarding class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. If a court or arbitrator certifies a class in this action and there is an adverse verdict on the merits, or in the event of a negotiated settlement of the action, the resulting liability and/or any increased costs of operations on an ongoing basis could be material to Cintas. Any estimated liability relating to this lawsuit is not determinable at this time.

Cintas also is a defendant in a purported class action lawsuit, Mirna E. Serrano, et al. v. Cintas Corporation (Serrano), filed on May 10, 2004, and pending in the United States District Court, Eastern District of Michigan, Southern Division. The Serrano plaintiffs allege that Cintas discriminated against women in hiring into various service sales representative positions across all divisions of Cintas. On November 15, 2005, the Equal Employment Opportunity Commission (EEOC) intervened in the Serrano lawsuit. The Serrano plaintiffs seek injunctive relief, compensatory damages, punitive damages, attorneys’ fees and other remedies. Cintas is a defendant in another purported class action lawsuit, Blanca Nelly Avalos, et al. v. Cintas Corporation (Avalos), currently pending in the United States District Court, Eastern District of Michigan, Southern Division. Ms. Avalos’ claims have been dismissed, but her putative class complaint remains pending. The Avalos plaintiffs allege that Cintas discriminated against women, African-Americans and Hispanics in hiring into various service sales representative positions in Cintas’ Rental division only throughout the United States. The Avalos plaintiffs seek injunctive relief, compensatory damages, punitive damages, attorneys’ fees and other remedies. The claims in Avalos originally were brought in the previously disclosed lawsuit captioned Robert Ramirez, et al. v. Cintas Corporation (Ramirez), filed on January 20, 2004, in the United States District Court, Northern District of California, San Francisco Division. On April 27, 2005, the EEOC intervened in the claims asserted in Ramirez. On May 11, 2006, the Ramirez and Avalos African-American, Hispanic and female failure to hire into service sales representative positions claims and the EEOC's intervention were consolidated for pretrial purposes with the Serrano case and transferred to the United States District Court for the Eastern District of Michigan, Southern Division. The consolidated case is known as Mirna E. Serrano/Blanca Nelly Avalos, et al. v. Cintas Corporation (Serrano/Avalos), and remains pending in the United States District Court, Eastern District of Michigan, Southern Division. No filings or determinations have been made in Serrano/Avalos as to class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. The non-service sales representative hiring claims in the previously disclosed Ramirez case that have not been dismissed remain pending in the Northern District of California, San Francisco Division, but were ordered to arbitration and stayed pending the completion of arbitration. The Ramirez purported class action claims currently in arbitration include allegations that Cintas failed to promote Hispanics into supervisory positions, discriminated against African-Americans and Hispanics in service sales representative route assignments and discriminated against African-Americans in hourly pay in Cintas’ Rental division only throughout the United States. The Ramirez plaintiffs seek injunctive relief, compensatory damages, punitive damages, attorneys’ fees and other remedies. No filings or determinations have been made in Ramirez as to class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. On February 24, 2006, a motion to intervene in Serrano was filed by intervening plaintiffs Colleen Grindle, et al., on behalf of a subclass of female employees at Cintas’ Perrysburg, Ohio rental location who allegedly were denied hire, promotion or transfer to service sales representative positions. On March 24, 2006, the plaintiffs Colleen Grindle, et al., withdrew their motion to intervene without prejudice. On February 20, 2007, the plaintiffs Colleen Grindle, et al., filed a separate lawsuit in the Court of Common Pleas, Wood County, Ohio, captioned Colleen Grindle, et al. v. Cintas Corporation (Grindle), on behalf of a class of female employees at Cintas’ Perrysburg, Ohio location who allegedly were denied hire, promotion or transfer to service sales representative positions on the basis of their gender. The Grindle plaintiffs seek injunctive relief, compensatory damages, punitive damages, attorneys’ fees and other remedies. The Grindle case is stayed pending the class certification proceedings in Serrano. No filings or determinations have been made in Grindle as to class certification. There can be no assurance as to whether a class will be certified or, if a class is certified, as to the geographic or other scope of such class. In addition, a class action lawsuit, Larry Houston, et al. v. Cintas Corporation (Houston), was filed on August 3, 2005, in the United States District Court for the Northern District of California on behalf of African-American managers alleging racial discrimination. On November 22, 2005, the court entered an order requiring the named plaintiffs in the Houston lawsuit to arbitrate all of their claims for monetary damages.

On July 17, 2008, Manville Personal Injury Settlement Trust filed a purported shareholder derivative lawsuit in the Court of Common Pleas, Hamilton County, Ohio, captioned Manville Personal Injury Settlement Trust v. Richard T. Farmer, et. al., A0806822 against certain directors and officers, alleging that they breached their fiduciary duties to the Company by consciously failing to cause Cintas to comply with worker safety and employment-related laws and regulations. The Company is named as a nominal defendant in the case. The complaint contends that, as a consequence of such alleged breach of duty, the Company suffered substantial monetary losses and other injuries and seeks, among other things, an award of compensatory damages, other non-monetary remedies and expenses.

The litigation discussed above, if decided or settled adversely to Cintas, may, individually or in the aggregate, result in liability material to Cintas’ financial condition or results of operations and could increase costs of operations on an on-going basis. Any estimated liability relating to these proceedings is not determinable at this time. Cintas may enter into discussions regarding settlement of these and other lawsuits, and may enter into settlement agreements if it believes such settlement is in the best interest of Cintas’ shareholders.

Cintas is subject to various environmental laws and regulations, as are other companies in the uniform rental industry. While environmental compliance is not a material component of our costs, Cintas must incur capital expenditures and associated operating costs, primarily for water treatment and waste removal, on a regular basis. Environmental spending related to water treatment and waste removal was approximately $17 million in fiscal 2008 and approximately $16 million in fiscal 2007. Capital expenditures to limit or monitor hazardous substances were approximately $4 million in fiscal 2008 and approximately $2 million in fiscal 2007. Cintas does not expect a material change in the cost of environmental compliance on a percent to revenue basis and is not aware of any material non-compliance with environmental laws.

13. Operating Segment Information

Cintas historically classified its businesses into two operating segments, Rentals and Other Services. The Rentals operating segment reflects the rental and servicing of uniforms and other garments, mats, mops and shop towels. In addition to these rental items, restroom and hygiene products and services are also provided within this operating segment. Effective June 1, 2007, this operating segment has been renamed Rental Uniforms and Ancillary Products.

The Other Services operating segment historically consisted of the direct sale of uniforms and related items, first aid, safety and fire protection products and services, document management services and branded promotional products. Effective June 1, 2007, the Other Services operating segment was separated into three reportable operating segments – Uniform Direct Sales operating segment, First Aid, Safety and Fire Protection Services operating segment and Document Management Services operating segment. This change provides more visibility to these operating segments as they continue to grow and have a larger impact on Cintas’ consolidated results. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of document shredding and document storage services.

Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled Significant Accounting Policies. Information as to the operations of Cintas’ operating segments is set forth below. The information for the years ended May 31, 2007 and 2006, have been restated to reflect the changes in the reportable operating segments described above.

		Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Corporate				Total
May 31, 2008
Revenue		$	2,834,568			$	517,490			$	403,552			$	182,290			$	—			$	3,937,900
Gross margin		$	1,252,951			$	168,210			$	160,823			$	99,616			$	—			$	1,681,600
Selling and admin. expenses			801,691				103,444				125,185				73,825				—				1,104,145
Interest income			—				—				—				—				(6,072	)			(6,072	)
Interest expense			—				—				—				—				52,823				52,823
Income before income taxes		$	451,260			$	64,766			$	35,638			$	25,791			$	(46,751	)		$	530,704
Depreciation and amortization		$	139,781			$	7,072			$	17,483			$	27,567			$	—			$	191,903
Capital expenditures		$	140,838			$	6,454			$	12,043			$	30,998			$	—			$	190,333
Total assets		$	2,620,138			$	205,638			$	345,479			$	445,651			$	191,695			$	3,808,601
May 31, 2007
Revenue		$	2,734,629			$	501,443			$	362,417			$	108,411			$	—			$	3,706,900
Gross margin		$	1,219,444			$	160,676			$	144,439			$	56,796			$	—			$	1,581,355
Selling and admin. expenses			757,058				97,361				106,171				49,592				(6,224	)			1,003,958
Interest income			—				—				—				—				(6,480	)			(6,480	)
Interest expense			—				—				—				—				50,324				50,324
Income before income taxes		$	462,386			$	63,315			$	38,268			$	7,204			$	(37,620	)		$	533,553
Depreciation and amortization		$	135,207			$	6,548			$	14,943			$	19,228			$	—			$	175,926
Capital expenditures		$	132,857			$	7,955			$	11,384			$	28,628			$	—			$	180,824
Total assets		$	2,567,070			$	183,373			$	330,735			$	333,889			$	155,413			$	3,570,480
May 31, 2006
Revenue		$	2,568,776			$	484,934			$	285,348			$	64,550			$	—			$	3,403,608
Gross margin		$	1,161,947			$	145,837			$	113,142			$	33,866			$	—			$	1,454,792
Selling and admin. expenses			693,579				104,672				82,259				31,240				—				911,750
Interest income			—				—				—				—				(6,759	)			(6,759	)
Interest expense			—				—				—				—				31,782				31,782
Income before income taxes		$	468,368			$	41,165			$	30,883			$	2,626			$	(25,023	)		$	518,019
Depreciation and amortization		$	130,327			$	6,396			$	11,383			$	12,547			$	—			$	160,653
Capital expenditures		$	125,290			$	8,163			$	11,272			$	11,907			$	—			$	156,632
Total assets		$	2,530,685			$	162,456			$	285,378			$	205,265			$	241,453			$	3,425,237

14.	Quarterly Financial Data (Unaudited)

The following is a summary of the results of operations for each of the quarters within the years ended May 31, 2008 and 2007:

May 31, 2008		First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenue		$	969,128			$	983,865			$	975,952			$	1,008,955
Gross margin		$	417,372			$	420,568			$	411,225			$	432,435
Net income		$	81,063			$	82,853			$	81,828			$	89,661
Basic earnings per share		$	.51			$	.53			$	.53			$	.58
Diluted earnings per share		$	.51			$	.53			$	.53			$	.58
Weighted average number of shares outstanding (000's)			158,771				156,563				153,679				153,686

May 31, 2007		First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenue		$	914,161			$	923,266			$	905,398			$	964,075
Gross margin		$	390,481			$	391,073			$	385,827			$	413,974
Net income		$	84,962			$	82,527			$	76,727			$	90,322
Basic earnings per share		$	.53			$	.51			$	.48			$	.57
Diluted earnings per share		$	.53			$	.51			$	.48			$	.57
Weighted average number of shares outstanding (000's)			160,770				160,312				159,311				158,657

15.	Supplemental Guarantor Information

Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly-owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the $775,000 of long-term notes, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly-owned, direct and indirect domestic subsidiaries.

As allowed by SEC rules, the following condensed consolidating financial statements are provided as an alternative to filing separate financial statements of the guarantors. Each of the subsidiaries presented in the condensed consolidating financial statements has been fully consolidated in Cintas' consolidated financial statements. The condensed consolidating financial statements should be read in conjunction with the consolidated financial statements of Cintas and notes thereto of which this note is an integral part.

Effective June 1, 2007, Cintas reorganized its legal structure to provide better alignment with the organizational structure of Cintas. The impact of this change is that certain subsidiary guarantor locations and their balances have moved into Corp. 2 and certain Corp. 2 locations are now subsidiary guarantors. The effect of this change is shown in the column entitled “Effect of Legal Restructure” on the May 31, 2007 consolidated balance sheet as shown below.

Condensed consolidating financial statements for Cintas, Corp. 2, the subsidiary guarantors and non-guarantors are presented on the following pages:

Condensed Consolidating Income Statement

Year Ended May 31, 2008		Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non-Guarantors			Eliminations					Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products		$	—			$	2,055,690			$	578,426			$	201,563			$	(1,111	)		$	2,834,568
Other services			—				1,418,410				536,881				67,212				(919,171	)			1,103,332
Equity in net income of affiliates			335,405				—				—				—				(335,405	)			—
			335,405				3,474,100				1,115,307				268,775				(1,255,687	)			3,937,900
Costs and expenses (income):
Cost of rental uniforms and ancillary products			—				1,259,752				372,225				118,443				(168,802	)			1,581,618
Cost of other services			—				928,597				456,758				41,992				(752,665	)			674,682
Selling and administrative expenses			—				1,078,047				(27,702	)			58,176				(4,376	)			1,104,145
Operating income			335,405				207,704				314,026				50,164				(329,844	)			577,455
Interest income			—				—				(1,450	)			(4,622	)			—				(6,072	)
Interest expense (income)			—				54,144				(7,106	)			5,785				—				52,823
Income before income taxes			335,405				153,560				322,582				49,001				(329,844	)			530,704
Income taxes			—				57,504				120,798				16,997				—				195,299
Net income		$	335,405			$	96,056			$	201,784			$	32,004			$	(329,844	)		$	335,405

Condensed Consolidating Income Statement

Year Ended May 31, 2007		Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non-Guarantors				Eliminations				Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products		$	—			$	2,009,095			$	554,595			$	171,634			$	(695	)		$	2,734,629
Other services			—				1,337,319				543,535				57,625				(966,208	)			972,271
Equity in net income of affiliates			334,538				—				—				—				(334,538	)			—
			334,538				3,346,414				1,098,130				229,259				(1,301,441	)			3,706,900
Costs and expenses (income):
Cost of rental uniforms and ancillary poducts			—				1,249,798				333,004				102,133				(169,750	)			1,515,185
Cost of other services			—				1,015,381				352,099				35,424				(792,544	)			610,360
Selling and administrative expenses			—				891,836				70,341				48,817				(7,036	)			1,003,958
Operating income			334,538				189,399				342,686				42,885				(332,111	)			577,397
Interest income			—				(2,628	)			(528	)			(3,324	)			—				(6,480	)
Interest expense (income)			—				50,981				(6,307	)			5,650				—				50,324
Income before income taxes			334,538				141,046				349,521				40,559				(332,111	)			533,553
Income taxes			—				52,853				130,972				15,190				—				199,015
Net income		$	334,538			$	88,193			$	218,549			$	25,369			$	(332,111	)		$	334,538

Condensed Consolidating Income Statement

Year Ended May 31, 2006		Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non-Guarantors				Eliminations				Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products		$	—			$	1,887,625			$	524,556			$	157,124			$	(529	)		$	2,568,776
Other services			—				1,154,847				434,851				54,812				(809,678	)			834,832
Equity in net income of affiliates			323,382				—				—				—				(323,382	)			—
			323,382				3,042,472				959,407				211,936				(1,133,589	)			3,403,608
Costs and expenses (income):
Cost of rental uniforms and ancillary products			—				1,162,222				324,602				92,753				(172,748	)			1,406,829
Cost of other services			—				870,532				284,310				35,082				(647,937	)			541,987
Selling and administrative expenses			—				838,556				26,580				45,922				692				911,750
Operating income			323,382				171,162				323,915				38,179				(313,596	)			543,042
Interest income			—				(4,721	)			(366	)			(1,672	)			—				(6,759	)
Interest expense (income)			—				32,323				(4,864	)			4,323				—				31,782
Income before income taxes			323,382				143,560				329,145				35,528				(313,596	)			518,019
Income taxes			—				55,395				127,005				12,237				—				194,637
Net income		$	323,382			$	88,165			$	202,140			$	23,291			$	(313,596	)		$	323,382

Condensed Consolidating Balance Sheet

As of May 31, 2008		Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non-Guarantors				Eliminations				Cintas Corporation Consolidated
Assets
Current assets:
Cash and cash equivalents		$	—			$	36,627			$	7,851			$	21,746			$	—			$	66,224
Marketable securities			—				—				—				125,471				—				125,471
Accounts receivable, net			—				312,424				119,592				29,329				(31,267	)			430,078
Inventories, net			—				218,109				18,349				8,928				(6,717	)			238,669
Uniforms and other rental items in service			—				288,097				85,753				24,319				(27,753	)			370,416
Deferred tax asset			—				—				41,664				(2,254	)			—				39,410
Prepaid expenses			—				5,038				5,876				1,154				—				12,068
Total current assets			—				860,295				279,085				208,693				(65,737	)			1,282,336
Property and equipment, at cost, net			—				675,559				236,519				62,497				—				974,575
Goodwill			—				—				1,279,819				35,750				—				1,315,569
Service contracts, net			—				145,115				2,612				5,030				—				152,757
Other assets, net			1,736,604				1,601,661				1,758,268				369,232				(5,382,401	)			83,364
		$	1,736,604			$	3,282,630			$	3,556,303			$	681,202			$	(5,448,138	)		$	3,808,601
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	(465,247	)		$	289,695			$	255,399			$	(3,668	)		$	18,576			$	94,755
Accrued compensation and related liabilities			—				29,869				18,210				2,526				—				50,605
Accrued liabilities			—				54,113				146,669				8,063				(920	)			207,925
Current income taxes			—				(75	)			12,686				276				—				12,887
Long-term debt due within one year			—				698				574				—				(202	)			1,070
Total current liabilities			(465,247	)			374,300				433,538				7,197				17,454				367,242
Long-term liabilities:
Long-term debt due after one year			—				952,595				893				27,213				(37,965	)			942,736
Deferred income taxes			—				—				118,479				5,705				—				124,184
Accrued liabilities			—				—				120,308				—				—				120,308
Total long-term liabilities			—				952,595				239,680				32,918				(37,965	)			1,187,228
Total shareholders' equity			2,201,851				1,955,735				2,883,085				641,087				(5,427,627	)			2,254,131
		$	1,736,604			$	3,282,630			$	3,556,303			$	681,202			$	(5,448,138	)		$	3,808,601

Condensed Consolidating Balance Sheet

As of May 31, 2007		Cintas Corporation				Corp. 2				Effect of Legal Restructure*				Subsidiary Guarantors				Non-Guarantors				Eliminations				Cintas Corporation Consolidated
Assets
Current assets:
Cash and cash equivalents		$	—			$	1,327			$	32,622			$	(24,835	)		$	26,246			$	—			$	35,360
Marketable securities			—				36,664				(36,664	)			36,664				83,389				—				120,053
Accounts receivable, net			—				271,868				26,974				109,375				24,252				(23,599	)			408,870
Inventories, net			—				204,164				4,032				23,350				7,775				(7,580	)			231,741
Uniforms and other rental items in service			—				273,246				33				82,621				21,482				(32,451	)			344,931
Prepaid expenses			—				11,486				(6,115	)			9,506				904				—				15,781
Total current assets			—				798,755				20,882				236,681				164,048				(63,630	)			1,156,736
Property and equipment, at cost, net			—				619,691				25,787				218,903				55,862				—				920,243
Goodwill			—				347,516				(347,516	)			1,223,896				21,981				—				1,245,877
Service contracts, net			—				102,574				60,387				3,724				4,676				—				171,361
Other assets, net			1,665,370				72,191				10,721				1,363,667				194,142				(3,229,828	)			76,263
		$	1,665,370			$	1,940,727			$	(229,739	)		$	3,046,871			$	440,709			$	(3,293,458	)		$	3,570,480
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	(465,247	)		$	(423,711	)		$	(1,387,144	)		$	2,312,352			$	1,926			$	26,446			$	64,622
Accrued compensation and related liabilities			—				42,152				5,478				12,189				3,007				—				62,826
Accrued liabilities			—				196,158				(151,805	)			150,790				6,477				(934	)			200,686
Current income taxes			—				586				(23	)			16,206				1,815				—				18,584
Deferred income taxes			—				—				—				50,237				1,942				—				52,179
Long-term debt due within one year			—				3,228				222,586				(221,486	)			—				(187	)			4,141
Total current liabilities			(465,247	)			(181,587	)			(1,310,908	)			2,320,288				15,167				25,325				403,038
Long-term debt due after one year			—				882,921				(221,352	)			159,255				92,448				(36,198	)			877,074
Deferred income taxes			—				—				—				117,485				5,145				—				122,630
Total shareholders' equity			2,130,617				1,239,393				1,302,521				449,843				327,949				(3,282,585	)			2,167,738
		$	1,665,370			$	1,940,727			$	(229,739	)		$	3,046,871			$	440,709			$	(3,293,458	)		$	3,570,480

• The amounts in this column represent the net transfer of balances between subsidiary guarantors and Corp. 2 caused by the legal restructure as described above. The subsidiary guarantor column has been changed to reflect the new legal structure as of June 1, 2007. The combination of the Corp. 2 amounts and this column represents the restructured Corp. 2 as of June 1, 2007.

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2008		Cintas Corporation				Corp. 2				Subsidiary Guarantors			Non- Guarantors					Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income		$	335,405			$	96,056			$	201,784			$	32,004			$	(329,844	)		$	335,405
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			—				97,251				42,730				8,585				—				148,566
Amortization of deferred charges			—				39,762				1,303				2,272				—				43,337
Stock-based compensation			7,456				—				—				—				—				7,456
Deferred income taxes			—				—				1,380				283				—				1,663
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable			—				(9,775	)			(10,217	)			(2,615	)			7,668				(14,939	)
Inventories			—				(9,703	)			5,053				(587	)			(863	)			(6,100	)
Uniforms and other rental items in service			—				(14,818	)			(3,183	)			(1,155	)			(4,698	)			(23,854	)
Prepaid expenses			—				325				3,630				(125	)			—				3,830
Accounts payable			—				2,160,426				(2,139,010	)			17,021				(7,870	)			30,567
Accrued compensation and related liabilities			—				(17,761	)			6,021				(690	)			—				(12,430	)
Accrued liabilities and other			—				20,634				(752	)			2,305				14				22,201
Income taxes payable			—				(638	)			11,122				(1,643	)			—				8,841
Net cash provided by (used in) operating activities			342,861				2,361,759				(1,880,139	)			55,655				(335,593	)			544,543
Cash flows from investing activities:
Capital expenditures			—				(121,962	)			(60,818	)			(7,553	)			—				(190,333	)
Proceeds from sale or redemption of marketable securities			—				—				37,663				8,128				—				45,791
Purchase of marketable securities and investments			—				(1,523,625	)			(377,963	)			(42,921	)			1,890,011				(54,498	)
Acquisitions of businesses, net of cash acquired			—				(93,773	)			(41	)			(17,721	)			—				(111,535	)
Other			(84,965	)			(678,313	)			2,315,520				(6	)			(1,552,636	)			(400	)
Net cash (used in) provided by investing activities			(84,965	)			(2,417,673	)			1,914,361				(60,073	)			337,375				(310,975	)
Cash flows from financing activities:
Proceeds from issuance of debt			—				295,000				—				—				—				295,000
Repayment of debt			—				(229,090	)			(1,537	)			—				(1,782	)			(232,409	)
Stock options exercised			8,371				—				—				—				—				8,371
Dividends paid			(70,831	)			—				—				—				—				(70,831	)
Repurchase of common stock			(191,479	)			—				—				—				—				(191,479	)
Other			(3,957	)			(7,318	)			—				(81	)			—				(11,356	)
Net cash (used in) provided by financing activities			(257,896	)			58,592				(1,537	)			(81	)			(1,782	)			(202,704	)
Net increase (decrease) in cash and cash equivalents			—				2,678				32,685				(4,499	)			—				30,864
Cash and cash equivalents at beginning of period			—				33,949				(24,834	)			26,245				—				35,360
Cash and cash equivalents at end of period		$	—			$	36,627			$	7,851			$	21,746			$	—			$	66,224

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2007		Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income		$	334,538			$	88,193			$	218,549			$	25,369			$	(332,111	)		$	334,538
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			—				96,145				32,371				6,665				—				135,181
Amortization of deferred charges			—				23,349				15,079				2,317				—				40,745
Stock-based compensation			4,500				—				—				—				—				4,500
Deferred income taxes			—				(10,263	)			9,072				859				—				(332	)
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable			—				(13,456	)			(7,148	)			(2,237	)			11,381				(11,460	)
Inventories			—				(31,593	)			1,328				712				(2,537	)			(32,090	)
Uniforms and other rental items in service			—				(1,049	)			(5,192	)			(836	)			109				(6,968	)
Prepaid expenses			—				(3,229	)			(845	)			(428	)			—				(4,502	)
Accounts payable			—				(210,868	)			199,229				15,552				(11,567	)			(7,654	)
Accrued compensation and related liabilities			—				7,356				5,016				228				—				12,600
Accrued liabilities			—				5,429				3,859				678				15				9,981
Income taxes payable			—				(3,495	)			(21,173	)			(480	)			—				(25,148	)
Net cash provided by (used in) operating activities			339,038				(53,481	)			450,145				48,399				(334,710	)			449,391
Cash flows from investing activities:
Capital expenditures			—				(106,396	)			(63,606	)			(10,822	)			—				(180,824	)
Proceeds from sale or redemption of marketable securities			—				120,365				—				(2,191	)			—				118,174
Purchase of marketable securities and investments			—				(12,247	)			(17,346	)			(30,051	)			11,129				(48,515	)
Acquisitions of businesses, net of cash acquired			—				(81,212	)			(79,192	)			(303	)			—				(160,707	)
Other			(82,809	)			49,477				(292,970	)			325				324,141				(1,836	)
Net cash (used in) provided by investing activities			(82,809	)			(30,013	)			(453,114	)			(43,042	)			335,270				(273,708	)
Cash flows from financing activities:
Proceeds from issuance of debt			—				250,000				2,460				—				—				252,460
Repayment of debt			—				(169,049	)			(378	)			—				(560	)			(169,987	)
Stock options exercised			10,863				—				—				—				—				10,863
Dividends paid			(61,996	)			—				—				—				—				(61,996	)
Repurchase of common stock			(198,949	)			—				—				—				—				(198,949	)
Other			(6,147	)			(5,591	)			—				110				—				(11,628	)
Net cash (used in) provided by financing activities			(256,229	)			75,360				2,082				110				(560	)			(179,237	)
Net (decrease) increase in cash and cash equivalents			—				(8,134	)			(887	)			5,467				—				(3,554	)
Cash and cash equivalents at beginning of period			—				9,461				8,674				20,779				—				38,914
Cash and cash equivalents at end of period		$	—			$	1,327			$	7,787			$	26,246			$	—			$	35,360

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2006		Cintas Corporation			Corp. 2			Subsidiary Guarantors			Non- Guarantors			Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income		$	323,382		$	88,165		$	202,140		$	23,291		$	(313,596	)		$	323,382
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation			—			91,528			29,220			6,369			—				127,117
Amortization of deferred charges			—			18,611			12,115			2,810			—				33,536
Stock-based compensation			4,725			—			—			—			—				4,725
Deferred income taxes			—			41			(484	)		391			—				(52	)
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable			—			(9,074	)		(22,532	)		(12,376	)		(172	)			(44,154	)
Inventories			—			28,804			(1,688	)		831			(5,914	)			22,033
Uniforms and other rental items in service			—			(16,621	)		(2,749	)		(3,412	)		(3,901	)			(26,683	)
Prepaid expenses			—			(1,901	)		(537	)		133			—				(2,305	)
Accounts payable			—			(294,789	)		311,988			(14,870	)		—				2,329
Accrued compensation and related liabilities			—			6,509			4,128			787			—				11,424
Accrued liabilities			—			(6,848	)		2,902			2,028			13				(1,905	)
Income taxes payable			—			4,721			5,871			957			29				11,578
Net cash provided by (used in) operating activities			328,107			(90,854	)		540,374			6,939			(323,541	)			461,025
Cash flows from investing activities:
Capital expenditures			—			(79,858	)		(60,271	)		(16,503	)		—				(156,632	)
Proceeds from sale or redemption of marketable securities			—			70,772			—			16,705			—				87,477
Purchase of marketable securities and investments			—			(10,266	)		(19,489	)		(34,119	)		31,942				(31,932	)
Acquisitions of businesses, net of cash acquired			—			(231,896	)		(109,312	)		(5,155	)		—				(346,363	)
Other			44,523			11,108			(346,339	)		3,671			294,441				7,404
Net cash provided by (used in) investing activities			44,523			(240,140	)		(535,411	)		(35,401	)		326,383				(440,046	)
Cash flows from financing activities:
Proceeds from issuance of debt			—			333,500			—			—			—				333,500
Repayment of debt			—			(6,594	)		(8,859	)		10,992			(2,842	)			(7,303	)
Stock options exercised			14,402			—			—			—			—				14,402
Dividends paid			(58,823	)		—			—			—			—				(58,823	)
Repurchase of common stock			(323,409	)		—			—			—			—				(323,409	)
Other			(4,800	)		290			—			20,882			—				16,372
Net cash (used in) provided by financing activities			(372,630	)		327,196			(8,859	)		31,874			(2,842	)			(25,261	)
Net (decrease) increase in cash and cash equivalents			—			(3,798	)		(3,896	)		3,412			—				(4,282	)
Cash and cash equivalents at beginning of period			—			13,259			12,570			17,367			—				43,196
Cash and cash equivalents at end of period		$	—		$	9,461		$	8,674		$	20,779		$	—			$	38,914