Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Audited Consolidated Financial Statements for the Fiscal Years Ended May 31, 2013, 2012 and 2011

Management's Report on Internal Control over Financial Reporting	27
Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm	28
Consolidated Statements of Income	30
Consolidated Statements of Comprehensive Income	31
Consolidated Balance Sheets	32
Consolidated Statements of Shareholders' Equity	33
Consolidated Statements of Cash Flows	34
Notes to Consolidated Financial Statements	35

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 Chief Executive Officer and our Chief Financial Officer, management assessed our internal control over financial reporting as of May 31, 2013. Management based its assessment on criteria established in Internal Control — Integrated Framework (1992) 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, 2013, 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, 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 on Form 10-K.

		Scott D. Farmer Chief Executive Officer
		William C. Gale Senior Vice President and Chief Financial Officer

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Cintas Corporation

We have audited Cintas Corporation's internal control over financial reporting as of May 31, 2013, based on criteria established in Internal Control-Integrated Framework (1992) 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 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, 2013, 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, 2013 and 2012 and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended May 31, 2013 and our report dated July 30, 2013 expressed an unqualified opinion thereon.

		/s/ ERNST & YOUNG LLP

Cincinnati, Ohio

July 30, 2013

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Cintas Corporation

We have audited the accompanying consolidated balance sheets of Cintas Corporation as of May 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended May 31, 2013. Our audits also included the consolidated financial statement schedule listed in the Index at Item 15(a)(2). These consolidated financial statements and schedule are the responsibility of Cintas Corporation's management. Our responsibility is to express an opinion on these financial statements and schedule 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, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the period ended May 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

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, 2013, based on criteria established in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated July 30, 2013 expressed an unqualified opinion thereon.

		/s/ ERNST & YOUNG LLP

Cincinnati, Ohio

July 30, 2013

Consolidated Statements of Income
	Fiscal Years Ended May 31,
(In thousands except per share data)	2013				2012				2011
Revenue:
Rental uniforms and ancillary products	$	3,044,587			$	2,912,261			$	2,692,248
Other services	1,271,884				1,189,739				1,118,136
	4,316,471				4,102,000				3,810,384
Costs and expenses:
Cost of rental uniforms and ancillary products	1,756,297				1,648,551				1,530,456
Cost of other services	773,107				714,841				670,641
Selling and administrative expenses	1,221,856				1,198,981				1,168,944
Operating income	565,211				539,627				440,343
Interest income	(409		)		(1,942		)		(2,030		)
Interest expense	65,712				70,625				49,704
Income before income taxes	499,908				470,944				392,669
Income taxes	184,466				173,307				145,680
Net income	$	315,442			$	297,637			$	246,989
Basic earnings per share	$	2.53			$	2.27			$	1.68
Diluted earnings per share	$	2.52			$	2.27			$	1.68
Dividends declared and paid per share	$	0.64			$	0.54			$	0.49

See accompanying notes.

Consolidated Statements of Comprehensive Income
	Fiscal Years Ended May 31,
(In thousands)	2013				2012				2011
Net income	$	315,442			$	297,637			$	246,989
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	(1,087		)		(17,815		)		27,344
Change in fair value of derivatives(1)	(187		)		(5,286		)		(6,096		)
Amortization of interest rate lock agreements	1,952				1,508				767
Change in fair value of available-for-sale securities(2)	14				24				3
Other(3)	768				(575		)		656
Other comprehensive income (loss)	1,460				(22,144		)		22,674
Comprehensive income	$	316,902			$	275,493			$	269,663

(1) Net of less than $0.1 million, $3.1 million and $3.8 million of tax expense for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

(2) Net of less than $0.1 million of tax benefit for each of the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

(3) Net of $0.3 million of tax benefit, $0.2 million of tax expense and $0.2 million of tax benefit for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

See accompanying notes.

Consolidated Balance Sheets
	As of May 31,
(In thousands except share data)	2013				2012
Assets
Current assets:
Cash and cash equivalents	$	352,273			$	339,825
Marketable securities	5,680				—
Accounts receivable, principally trade, less allowance of $15,855 and $17,017, respectively	496,049				450,861
Inventories, net	240,440				251,205
Uniforms and other rental items in service	496,752				452,785
Income taxes, current	9,102				22,188
Prepaid expenses	24,530				21,222
Total current assets	1,624,826				1,538,086
Property and equipment, at cost, net	986,703				952,587
Goodwill	1,517,560				1,485,375
Service contracts, net	92,153				76,822
Other assets, net	124,390				112,836
	$	4,345,632			$	4,165,706
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	121,029			$	94,840
Accrued compensation and related liabilities	78,050				91,214
Accrued liabilities	271,821				261,442
Deferred tax liability	77,169				2,559
Long-term debt due within one year	8,187				225,636
Total current liabilities	556,256				675,691
Long-term liabilities:
Long-term debt due after one year	1,300,979				1,059,166
Deferred income taxes	210,483				204,581
Accrued liabilities	76,422				87,133
Total long-term liabilities	1,587,884				1,350,880
Shareholders' equity:
Preferred stock, no par value:
100,000 shares authorized, none outstanding	—				—
Common stock, no par value:
425,000,000 shares authorized
2013: 174,786,010 shares issued and 122,281,507 shares outstanding
2012: 173,745,913 shares issued and 126,519,758 shares outstanding	186,332				148,255
Paid-in capital	109,822				107,019
Retained earnings	3,717,771				3,482,073
Treasury stock:
2013: 52,504,503 shares
2012: 47,226,155 shares	(1,850,556		)		(1,634,875		)
Other accumulated comprehensive income (loss):
Foreign currency translation	51,312				52,399
Unrealized loss on derivatives	(14,339		)		(16,104		)
Other	1,150				368
Total shareholders' equity	2,201,492				2,139,135
	$	4,345,632			$	4,165,706

See accompanying notes.

Consolidated

Statements of Shareholders' Equity

	Common Stock							Paid-In Capital				Retained Earnings				Other Accumulated Comprehensive Income (Loss)				Treasury Stock							Total Shareholders' Equity
(In thousands)	Shares			Amount							Shares			Amount
Balance at June 1, 2010	173,207			$	132,058			$	84,616			$	3,080,079			$	36,133			(20,338	)		$	(798,857	)		$	2,534,029
Net income	—			—				—				246,989				—				—			—				246,989
Comprehensive income, net of tax	—			—				—				—				22,674				—			—				22,674
Dividends	—			—				—				(71,812		)		—				—			—				(71,812		)
Stock-based compensation	—			—				15,203				—				—				—			—				15,203
Vesting of stock-based compensation awards	139			3,343				(3,343		)		—				—				—			—				—
Repurchase of common stock	—			—				—				—				—				(15,424	)		(443,690		)		(443,690		)
Other	—			—				(744		)		—				—				—			—				(744		)
Balance at May 31, 2011	173,346			135,401				95,732				3,255,256				58,807				(35,762	)		(1,242,547		)		2,302,649
Net income	—			—				—				297,637				—				—			—				297,637
Comprehensive loss, net of tax	—			—				—				—				(22,144		)		—			—				(22,144		)
Dividends	—			—				—				(70,820		)		—				—			—				(70,820		)
Stock-based compensation	—			—				20,312				—				—				—			—				20,312
Vesting of stock-based compensation awards	297			9,513				(9,513		)		—				—				—			—				—
Stock options exercised, net of shares surrendered	103			3,341				—				—				—				—			—				3,341
Repurchase of common stock	—			—				—				—				—				(11,464	)		(392,328		)		(392,328		)
Other	—			—				488				—				—				—			—				488
Balance at May 31, 2012	173,746			148,255				107,019				3,482,073				36,663				(47,226	)		(1,634,875		)		2,139,135
Net income	—			—				—				315,442				—				—			—				315,442
Comprehensive income, net of tax	—			—				—				—				1,460				—			—				1,460
Dividends	—			—				—				(79,744		)		—				—			—				(79,744		)
Stock-based compensation	—			—				23,310				—				—				—			—				23,310
Vesting of stock-based compensation awards	610			23,270				(23,270		)		—				—				—			—				—
Stock options exercised, net of shares surrendered	430			14,807				—				—				—				—			—				14,807
Repurchase of common stock	—			—				—				—				—				(5,279	)		(215,681		)		(215,681		)
Other	—			—				2,763				—				—				—			—				2,763
Balance at May 31, 2013	174,786			$	186,332			$	109,822			$	3,717,771			$	38,123			(52,505	)		$	(1,850,556	)		$	2,201,492

See accompanying notes.

Consolidated Statements of Cash Flows
	Fiscal Years Ended May 31,
(In thousands)	2013				2012				2011
Cash flows from operating activities:
Net income	$	315,442			$	297,637			$	246,989
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	165,664				155,831				150,886
Amortization of intangible assets	23,713				38,334				42,581
Stock-based compensation	23,310				20,312				15,203
Deferred income taxes	48,023				56,727				47,908
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	(42,704		)		(24,261		)		(48,986		)
Inventories, net	10,997				(2,330		)		(78,824		)
Uniforms and other rental items in service	(44,179		)		(60,279		)		(58,180		)
Prepaid expenses	(3,281		)		(1,496		)		360
Accounts payable	25,023				(12,557		)		29,215
Accrued compensation and related liabilities	(13,161		)		11,625				12,493
Accrued liabilities and other	31,873				(20,371		)		(2,167		)
Income taxes, current	12,028				10,690				(16,592		)
Net cash provided by operating activities	552,748				469,862				340,886
Cash flows from investing activities:
Capital expenditures	(196,486		)		(160,802		)		(182,592		)
Proceeds from redemption of marketable securities	161,478				665,016				139,056
Purchase of marketable securities and investments	(178,464		)		(585,655		)		(78,307		)
Acquisitions of businesses, net of cash acquired	(69,370		)		(24,864		)		(171,552		)
Other	(1,339		)		2,011				(5,198		)
Net cash used in investing activities	(284,181		)		(104,294		)		(298,593		)
Cash flows from financing activities:
Proceeds from issuance of debt	250,000				—				1,002,281
Repayment of debt	(225,636		)		(1,323		)		(502,208		)
Proceeds from exercise of stock-based compensation awards	14,807				3,341				—
Dividends paid	(79,744		)		(70,820		)		(71,812		)
Repurchase of common stock	(215,681		)		(392,328		)		(443,690		)
Other	196				555				(4,609		)
Net cash used in financing activities	(256,058		)		(460,575		)		(20,038		)
Effect of exchange rate changes on cash and cash equivalents	(61		)		(3,274		)		4,570
Net increase (decrease) in cash and cash equivalents	12,448				(98,281		)		26,825
Cash and cash equivalents at beginning of year	339,825				438,106				411,281
Cash and cash equivalents at end of year	$	352,273			$	339,825			$	438,106

See accompanying notes.

Notes to Consolidated Financial Statements

1. Significant Accounting Policies

Business description. Cintas Corporation (collectively with its majority-owned subsidiaries and any entities over which it has control, "Cintas") provides highly specialized products and services to businesses of all types primarily throughout North America, as well as Latin America, Europe and Asia. 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 cleaning services and supplies, carpet and tile cleaning services, first aid, safety and fire protection products and services and document management services. Cintas' products and services are designed to enhance its customers' images and to provide additional safety and protection in the workplace.

Cintas classifies its businesses into four operating segments based on the types of products and services provided. The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items. 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 destruction, document imaging and document retention services.

Principles of consolidation. The consolidated financial statements include the accounts of Cintas controlled majority-owned subsidiaries and any entities over which Cintas has control. Intercompany balances and transactions have been eliminated as appropriate.

Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) 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 Rental 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, mops, shop towels and other ancillary 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 rental uniforms and ancillary products.

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.

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

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. At May 31, 2013, cash and cash equivalents includes $28.5 million of restricted cash used as collateral associated with the general insurance program.

Marketable securities. Marketable securities are comprised of fixed income securities and are classified as available-for-sale.

Accounts receivable. Accounts receivable is comprised of amounts owed through product shipments and services provided and is presented net of an allowance for doubtful accounts. The allowance is an estimate based on historical

rates of collectability and allowances for specific accounts identified as uncollectible. The allowance that is an estimate based on Cintas' historical rates of collectability 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 operating segment. When an account is considered uncollectible, it is written off against the allowance for doubtful accounts.

Inventories. Inventories are valued at the lower of cost (first-in, first-out) or market. Cintas applies a commonly accepted practice of using inventory turns to apply variances between actual and standard costs to the inventory balances. The judgments and estimates used to calculate inventory turns will have an impact on the valuation of inventories at the lower of cost or market. Inventory is comprised of the following amounts:

(In thousands)	2013				2012
Raw materials	$	19,800			$	19,138
Work in process	17,353				13,052
Finished goods	203,287				219,015
	$	240,440			$	251,205

Inventories are recorded net of reserves for obsolete inventory of $29.5 million and $29.4 million as of May 31, 2013 and 2012, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence.

Uniforms and other rental items in service. These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame resistant clothing, linens and restroom dispensers, are amortized over their useful lives, which range from 8 to 60 months. The amortization rates used are based on industry experience, Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory that is presented in the consolidated financial statements.

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 of the assets based on industry and company specific experience, in years:

Buildings	30 to 40
Building improvements	5 to 20
Equipment	3 to 10
Leasehold improvements	2 to 15

Long-lived assets. When events or circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated undiscounted future cash flows are compared to the carrying amount of the assets. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, an impairment loss is recorded based on the excess of the carrying amount of the assets over their respective fair values. Fair value is generally determined by discounted cash flows or based on prices of similar assets, as appropriate. Long-lived assets that are held for sale are reported at the lower of the carrying amount or the estimated fair value, less estimated costs to sell.

Goodwill. Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Goodwill is separately disclosed from other intangible assets on the consolidated balance sheet and not amortized. Cintas completes an annual goodwill impairment test which includes the determination of the estimated fair value of its reporting units. The methodology used is consistent with prior years. Based on the results of the annual impairment test, Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2013, 2012 or 2011. Cintas will continue to perform impairment tests as of March 1 in future years and when indicators of impairment exist, if any, 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. Certain noncompete agreements, as

well as all service contracts, require that a valuation be determined using a discounted cash flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. No impairment has been recognized by Cintas for the fiscal years ended May 31, 2013, 2012 or 2011.

Accrued liabilities. Current accrued liabilities are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Current accrued liabilities include the following amounts:

(In thousands)	2013				2012
General insurance liabilities	$	96,930			$	82,611
Employee benefit related liabilities	59,221				56,134
Taxes and related liabilities	7,776				8,523
Accrued interest	26,816				29,523
Other	81,078				84,651
	$	271,821			$	261,442

General insurance liabilities represent the estimated ultimate cost of all asserted and unasserted claims incurred, primarily related to worker's compensation, auto liability and other general liability exposure through the consolidated balance sheet date. Cintas records an increase or decrease in selling and administrative expenses related to development of prior claims, higher claims activity and other environmental factors in the period in which it becomes known.

Long-term accrued liabilities consists primarily of reserves associated with unrecognized tax benefits, which are described in more detail in Note 7 entitled Income Taxes, and retirement obligations, which are described in more detail in Note 9 entitled Defined Contribution Plans.

Stock-based compensation. Compensation expense is recognized for all share-based payments to employees, including stock options and restricted stock awards, in the consolidated statements of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. 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.

Derivatives and hedging activities. Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. Derivatives are recorded at fair value on the consolidated balance sheet, and gains and losses are recorded as adjustments to earnings or other comprehensive income, as appropriate.

Other accounting pronouncements. In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-02 (ASU 2013-02), Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The update requires disclosure of amounts reclassified out of accumulated other comprehensive income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about these amounts. The guidance is effective prospectively for interim and annual financial periods beginning after December 15, 2012. This new guidance is effective for Cintas in the first quarter of fiscal 2014. Cintas does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

2. Fair Value Measurements

FASB Accounting Standard Codification (ASC) Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. It also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

	Level 1 —	Quoted prices in active markets for identical assets or liabilities.
	Level 2 —	Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
	Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Cintas' assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

In order to meet the requirements of ASC 820, Cintas utilizes two basic valuation approaches to determine the fair value of its assets and liabilities required to be recorded on a recurring basis at fair value. The first approach is the cost approach. The cost approach is generally the value a market participant would expect to replace the respective asset or liability. The second approach is the market approach. The market approach looks at what a market participant would consider valuing an exact or similar asset or liability to that of Cintas, including those traded on exchanges.

All financial instruments that are measured at fair value on a recurring basis (at least annually) have been segregated into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below:

(In thousands)	As of May 31, 2013
	Level 1				Level 2				Level 3				Fair Value
Cash and cash equivalents	$	352,273			$	—			$	—			$	352,273
Marketable securities:
U.S. municipal bonds	—				5,680				—				5,680
Accounts receivable, net	—				39				—				39
Total assets at fair value	$	352,273			$	5,719			$	—			$	357,992

(In thousands)	As of May 31, 2012
	Level 1				Level 2				Level 3				Fair Value
Cash and cash equivalents	$	339,825			$	—			$	—			$	339,825
Total assets at fair value	$	339,825			$	—			$	—			$	339,825

Cintas' cash and cash equivalents and marketable securities are generally classified within Level 1 or Level 2 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets, and financial instruments classified as Level 2 are based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments.

The types of financial instruments Cintas classifies within Level 2 include highly rated U.S. state or municipal bonds. The valuation technique used for Cintas’ marketable securities classified within Level 2 of the fair value hierarchy is primarily the market approach. The primary inputs to value Cintas’ marketable securities is the respective instruments future cash flows based on its stated yield and the amount a market participant would pay for a similar instrument. Primarily all of Cintas’ marketable securities are actively traded and the recorded fair value reflects current market conditions. However, due to the inherent volatility in the investment market, there is at least a possibility that recorded investment values may change in the near term.

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 or expense. The cost of the securities sold is based on the specific identification method. The amortized cost basis of the marketable securities as of May 31, 2013 was $5.7 million. Purchases of marketable securities were $167.1 million, $579.7 million and $62.7 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively. There were no outstanding marketable securities as of May 31, 2012. All outstanding marketable securities as of May 31, 2013 had contractual maturities due within one year.

Accounts receivable, net include foreign currency forward contracts. The fair value of Cintas' foreign currency forward contracts are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy.

The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated balance sheet date.

Cintas' non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis primarily relate to assets and liabilities acquired in a business acquisition. Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis (including business acquisitions). Based on the nature of Cintas' business acquisitions, which occur regularly throughout the fiscal year, the majority of the assets acquired and liabilities assumed consist of working capital, primarily valued using Level 2 inputs, property and equipment, also primarily valued using Level 2 inputs and goodwill and other identified intangible assets valued using Level 3 inputs. In general, non-recurring fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows and company specific discount rates.

3. Property and Equipment

(In thousands)	2013				2012
Land	$	112,311			$	108,176
Buildings and improvements	512,717				497,249
Equipment	1,631,213				1,478,270
Leasehold improvements	27,543				25,502
Construction in progress	58,463				62,370
	2,342,247				2,171,567
Less: accumulated depreciation	1,355,544				1,218,980
	$	986,703			$	952,587

Interest expense is net of capitalized interest of $1.3 million and $2.2 million for the fiscal years ended May 31, 2012 and 2011, respectively. Interest was not capitalized during the fiscal year ended May 31, 2013.

4. Goodwill, Service Contracts and Other Assets

Changes in the carrying amount of goodwill and service contracts for the fiscal years ended May 31, 2013 and 2012, by operating segment, are as follows:

Goodwill (in thousands)	Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Total
Balance as of June 1, 2011	$	943,177			$	23,995			$	192,944			$	327,766			$	1,487,882
Goodwill acquired (adj.)	2,163				—				(479		)		945				2,629
Foreign currency translation	(891		)		(27		)		—				(4,218		)		(5,136		)
Balance as of May 31, 2012	$	944,449			$	23,968			$	192,465			$	324,493			$	1,485,375
Goodwill acquired	—				—				24,524				7,616				32,140
Foreign currency translation	(124		)		(26		)		—				195				45
Balance as of May 31, 2013	$	944,325			$	23,942			$	216,989			$	332,304			$	1,517,560

Service Contracts (in thousands)	Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Total
Balance as of June 1, 2011	$	44,628			$	—			$	35,878			$	21,806			$	102,312
Service contracts acquired	1,346				—				838				4,470				6,654
Service contracts amortization	(15,569		)		—				(7,382		)		(7,219		)		(30,170		)
Foreign currency translation	(1,249		)		—				—				(725		)		(1,974		)
Balance as of May 31, 2012	$	29,156			$	—			$	29,334			$	18,332			$	76,822
Service contracts acquired	—				—				11,413				24,670				36,083
Service contracts amortization	(6,002		)		—				(7,936		)		(6,766		)		(20,704		)
Foreign currency translation	(19		)		—				—				(29		)		(48		)
Balance as of May 31, 2013	$	23,135			$	—			$	32,811			$	36,207			$	92,153

Information regarding Cintas' service contracts and other assets is as follows:

	As of May 31, 2013
(In thousands)	Carrying Amount				Accumulated Amortization				Net
Service contracts	$	420,499			$	328,346			$	92,153
Noncompete and consulting agreements	$	77,863			$	72,970			$	4,893
Investments (1)	101,525				—				101,525
Other	22,711				4,739				17,972
Total	$	202,099			$	77,709			$	124,390

	As of May 31, 2012
(In thousands)	Carrying Amount				Accumulated Amortization				Net
Service contracts	$	384,622			$	307,800			$	76,822
Noncompete and consulting agreements	$	76,036			$	69,954			$	6,082
Investments (1)	90,198				—				90,198
Other	19,828				3,272				16,556
Total	$	186,062			$	73,226			$	112,836

(1)

Investments at May 31, 2013, include the cash surrender value of insurance policies of $73.0 million, equity method investments of $27.6 million and cost method investments of $0.9 million. During fiscal 2013, Cintas sold stock of an equity method investment for a gain of $8.5 million. Investments at May 31, 2012, include the cash surrender value of insurance policies of $57.4 million, equity method investments of $31.9 million and cost method investments of $0.9 million.

Amortization expense was $23.7 million, $38.3 million and $42.6 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively. Estimated amortization expense, excluding any future acquisitions, for each of the next five years is $22.1 million, $19.2 million, $14.0 million, $8.9 million and $7.7 million, respectively.

Investments recorded using the cost method are evaluated for impairment on an annual basis or when indicators of impairment are identified. For fiscal 2013, 2012, and 2011, no losses due to impairment were recorded.

5. Long-Term Debt and Derivatives

(In thousands)	2013				2012
Unsecured term notes due through 2036 at an average rate of 4.59%	$	1,309,166			$	1,284,802
Less: amounts due within one year	8,187				225,636
	$	1,300,979			$	1,059,166

Cintas' senior notes are recorded at cost. The fair value is estimated using Level 2 inputs based on Cintas' current incremental borrowing rate for similar types of borrowing arrangements. The carrying value and fair value of Cintas' long-term debt as of May 31, 2013 were $1,309.2 million and $1,447.1 million and as of May 31, 2012 were $1,284.8 million and $1,420.2 million.

Letters of credit outstanding were $85.8 million and $85.7 million at May 31, 2013 and 2012, respectively. Maturities of long-term debt during each of the next five years are $8.2 million, $0.5 million, $0.2 million, $250.2 million and $300.1 million, respectively.

Interest paid was $68.4 million, $62.3 million and $49.2 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

Cintas' commercial paper program has a capacity of $300.0 million that is fully supported by a backup revolving credit facility through a credit agreement with its banking group. This revolving credit facility has an accordion feature that allows for a maximum borrowing capacity of $450.0 million. The revolving credit facility was amended on October 7, 2011, to extend the maturity date from September 26, 2014 to October 6, 2016, to improve the applicable margin used to calculate the interest rate payable on any outstanding loans and the facility fee payable under the agreement and to replace the financial covenant regarding Cintas' net funded indebtedness to total capitalization with a requirement to maintain a leverage ratio of consolidated indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (debt to EBITDA) of no more than 3.5 to 1.0. We believe this program, along with cash generated from operations, will be adequate to provide necessary funding for our future cash requirements. No commercial paper or borrowings on our revolving credit facility were outstanding at May 31, 2013 or 2012.

On June 1, 2012, Cintas repaid at maturity $225.0 million aggregate principal amount of its 6.00% senior notes due 2012. Subsequently, on June 5, 2012, Cintas issued $250.0 million aggregate principal amount of senior notes due June 1, 2022. These senior notes bear interest at a rate of 3.25% paid semi-annually beginning December 1, 2012. The net proceeds ($25.0 million) generated from the offering were used for general corporate purposes.

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, 2007, 2008 and 2011. In addition, during the fourth quarter of fiscal 2012, Cintas entered into a new interest rate lock agreement in anticipation of the fiscal 2013 issuance. The amortization of the cash flow hedges resulted in a credit to other comprehensive income of $2.0 million, $1.5 million and $0.8 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

To hedge the exposure of movements in the foreign currency rates, Cintas may use foreign currency hedges. These hedges reduce the impact on cash flows from movements in the foreign currency exchange rates. Examples of foreign currency hedge instruments that Cintas may use are average rate options and forward contracts. Cintas had forward contracts included in accounts receivable of less than $0.1 million at May 31, 2013. Cintas did not have any forward contracts included in accounts receivable at May 31, 2012. These instruments did not impact foreign currency exchange during fiscal 2013 and increased foreign currency exchange loss by less than $0.1 million during fiscal 2012.

Cintas has certain 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 EBITDA 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.

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 $40.1 million, $34.5 million, $29.1 million, $22.7 million, $17.6 million and $65.5 million, respectively.

Rent expense under operating leases during the fiscal years ended May 31, 2013, 2012 and 2011, was $52.2 million, $48.7 million and $45.7 million, respectively.

7. Income Taxes

(In thousands)	2013				2012				2011
Income before income taxes consist of the following components:
U.S. operations	$	485,046			$	454,811			$	377,922
Foreign operations	14,862				16,133				14,747
	$	499,908			$	470,944			$	392,669

(In thousands)	2013				2012				2011
Income tax expense consists of the following components:
Current:
Federal	$	109,964			$	139,251			$	70,811
State and local	12,478				17,780				15,063
	122,442				157,031				85,874
Deferred	62,024				16,276				59,806
	$	184,466			$	173,307			$	145,680

(In thousands)	2013				2012				2011
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	$	174,968			$	164,830			$	137,434
State and local income taxes, net of federal benefit	12,192				11,876				11,984
Other	(2,694		)		(3,399		)		(3,738		)
	$	184,466			$	173,307			$	145,680

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

(In thousands)	2013				2012
Deferred tax assets:
Allowance for doubtful accounts	$	5,322			$	5,577
Inventory obsolescence	12,220				11,507
Insurance and contingencies	33,984				28,708
Stock-based compensation	17,513				16,017
Foreign tax credit carry-forward	5,397				9,054
Treasury locks	8,020				9,032
Other	20,030				9,421
	102,486				89,316
Valuation allowance	(12,789		)		(9,054		)
	89,697				80,262
Deferred tax liabilities:
In service inventory	131,334				64,061
Property	123,904				122,675
Intangibles	99,267				88,696
State taxes and other	22,844				11,970
	377,349				287,402
Net deferred tax liability	$	287,652			$	207,140

Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets, net of valuation allowances, will be realized.

Income taxes paid were $122.2 million, $160.8 million and $105.8 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

In the fourth quarter of fiscal 2012, Cintas repatriated approximately $110 million of cash from foreign subsidiaries on which no U.S. federal income taxes were previously provided, since Cintas had previously intended to permanently reinvest cumulative undistributed earnings of its foreign subsidiaries in foreign operations. Cintas recognized an income tax expense of $8.9 million, net of foreign tax credits in fiscal 2012 as a result of the repatriation described above.

Undistributed earnings of foreign subsidiaries were approximately $194.0 million, $140.7 million and $222.0 million as of May 31, 2013, 2012 and 2011, respectively, for which deferred taxes have not been provided. Such earnings are considered to be permanently reinvested in Cintas' foreign subsidiaries. If such earnings were repatriated, additional tax expense may result. The current calculation of such additional taxes is not practicable.

Accounting for uncertain tax positions requires the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the 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.

As of May 31, 2013 and 2012, there was $10.9 million and $9.0 million, respectively, in total unrecognized tax benefits, which, if recognized, would favorably impact Cintas' effective tax rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of these items in prior reporting periods. The total amount accrued for interest and penalties as of May 31, 2013 and 2012, was $1.1 million and $2.0 million, respectively. Cintas records this tax liability as current and long-term accrued liabilities on the consolidated balance sheets, as appropriate.

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. Unrecognized tax benefits related to continuing operations decreased by $29.2 million in fiscal 2013, decreased by $55.0 million in fiscal 2012 and increased by $6.4 million in fiscal 2011. Accrued interest decreased by $0.9 million, $7.1 million and $6.6 million in fiscal 2013, 2012 and 2011, respectively.

A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:

(In thousands)
Balance at June 1, 2011	$	103,099
Additions for tax positions of prior years	5,660
Settlements	(5,048		)
Change in tax regulations	(57,182		)
Statute expirations	(1,998		)
Balance at May 31, 2012	$	44,531
Additions based on tax positions related to the current year	1,843
Additions for tax positions of prior years	2,960
Change in tax regulations	(33,600		)
Statute expirations	(2,025		)
Balance at May 31, 2013	$	13,709

On December 23, 2011, the U.S. Department of the Treasury and the Internal Revenue Service issued temporary regulations (Regulations Section 2011-14) that provide guidance on amounts paid to improve tangible property and acquire or produce tangible property, as well as guidance regarding the disposition of property and the expensing of supplies and materials. The effective date of the final regulations was extended and will be effective for Cintas' fiscal year ending May 31, 2015. Early adoption is available, and as such, Cintas elected early adoption of the regulations on specific assets (material and supplies) resulting in gross decreases in unrecognized tax benefits of $33.6 million and $57.2 million in fiscal 2013 and 2012, respectively. Due to indications of coming changes to the de minimis and disposition rules, Cintas continues to review these regulations but does not believe there will be a material impact on the consolidated financial statements when they are fully adopted.

The majority of Cintas' operations are in North America. 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 certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of operation in any given period.

All U.S. federal income tax returns are closed to audit through fiscal 2010. 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 2005. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $1.4 million for the fiscal year ending May 31, 2014.

8. Acquisitions

The purchase price paid for each acquisition has been allocated to the fair value of the assets acquired and liabilities assumed. During fiscal 2013, Cintas acquired three First Aid, Safety and Fire Protection Services operating segment businesses and twelve Document Management Services operating segment businesses. During fiscal 2012, Cintas acquired two Uniform Rental and Ancillary Products operating segment businesses, two First Aid, Safety and Fire Protection Services operating segment businesses and four Document Management Services operating segment businesses.

The following summarizes the aggregate purchase price for all businesses acquired:

(In thousands)	2013				2012
Fair value of tangible assets acquired	$	7,212			$	536
Fair value of service contracts acquired	34,858				5,494
Fair value of other intangibles acquired	2,049				743
Net goodwill recognized	32,133				2,618
Total fair value of assets acquired	76,252				9,391
Fair value of liabilities assumed and incurred (settled)	6,882				(15,473		)
Total cash paid for acquisitions	$	69,370			$	24,864

The results of operation 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 to Cintas.

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 employee-partners who have completed one year of service. The Plan also includes a 401(k) savings feature covering substantially all U.S. employee-partners. The amounts of contributions to the Plan and ESOP, as well as the matching contribution to the 401(k), are made at the discretion of Cintas. Total contributions, including Cintas' matching contributions, which approximate cost, were $28.4 million, $26.0 million and $21.1 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

Cintas has a non-contributory deferred profit sharing plan (DPSP), which covers substantially all Canadian employee-partners. In addition, a registered retirement savings plan (RRSP) is offered to those employees. The amounts of contributions to the DPSP, as well as the matching contribution to the RRSP, are made at the discretion of Cintas. Total contributions, which approximate cost, were $1.4 million, $1.3 million and $1.0 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

Cintas has a supplemental executive retirement plan (SERP) subject to Section 409A of the Internal Revenue Code for the benefit of certain highly compensated Cintas employee-partners. The SERP allows participants to defer the receipt of compensation which would otherwise become payable to them. Matching contributions are made at the discretion of Cintas. Total matching contributions were $4.7 million, $5.7 million and $6.1 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

10. Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas' common shares:

(In thousands except per share data)	2013				2012				2011
Basic Earnings per Share
Net income	$	315,442			$	297,637			$	246,989
Less dividends to:
Common shares	$	78,866			$	70,055			$	71,197
Unvested shares	878				765				615
Total dividends	$	79,744			$	70,820			$	71,812
Undistributed net income	$	235,698			$	226,817			$	175,177
Less: net income allocated to participating unvested securities	1,896				1,880				1,097
Net income available to common shareholders	$	233,802			$	224,937			$	174,080
Basic weighted average common shares outstanding	123,956				129,891				146,586
Basic earnings per share:
Common shares — distributed earnings	$	0.64			$	0.54			$	0.49
Common shares — undistributed earnings	1.89				1.73				1.19
Total common shares	$	2.53			$	2.27			$	1.68
Unvested shares — distributed earnings	$	0.64			$	0.54			$	0.49
Unvested shares — undistributed earnings	1.89				1.73				1.19
Total unvested shares	$	2.53			$	2.27			$	1.68

(In thousands except per share data)	2013				2012				2011
Diluted Earnings per Share
Net income	$	315,442			$	297,637			$	246,989
Less dividends to:
Common shares	$	78,866			$	70,055			$	71,197
Unvested shares	878				765				615
Total dividends	$	79,744			$	70,820			$	71,812
Undistributed net income	$	235,698			$	226,817			$	175,177
Less: net income allocated to participating unvested securities	1,896				1,880				1,097
Net income available to common shareholders	$	233,802			$	224,937			$	174,080
Basic weighted average common shares outstanding	123,956				129,891				146,586
Effect of dilutive securities — employee stock options	575				142				—
Diluted weighted average common shares outstanding	124,531				130,033				146,586
Diluted earnings per share:
Common shares — distributed earnings	$	0.64			$	0.54			$	0.49
Common shares — undistributed earnings	1.88				1.73				1.19
Total common shares	$	2.52			$	2.27			$	1.68
Unvested shares — distributed earnings	$	0.64			$	0.54			$	0.49
Unvested shares — undistributed earnings	1.88				1.73				1.19
Total unvested shares	$	2.52			$	2.27			$	1.68

For the fiscal years ended May 31, 2013, 2012 and 2011, options granted to purchase 0.7 million, 2.0 million and 3.9 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. The exercise prices of these options were greater than the average market price of the common shares (anti-dilutive).

We completed the October 26, 2010 share buyback program by purchasing 8.1 million shares of Cintas common stock in June and July 2011 for a total of $259.5 million. On October 18, 2011, we announced that the Board of Directors authorized an additional $500.0 million share buyback program. Under this new program, we purchased 3.3 million shares of Cintas common stock in April and May 2012 for a total purchase price of $129.6 million. During fiscal 2013, Cintas purchased a total of 5.1 million shares of Cintas common stock at an average price of $40.97 per share for a total purchase price of $208.0 million. From the inception of the October 18, 2011 share buyback program through July 30, 2013, Cintas has purchased a total of 8.6 million shares of Cintas common stock at an average price of $40.43 per share for a total purchase price of $348.9 million. In addition, for the fiscal year ended May 31, 2013, Cintas acquired 0.2 million shares of Cintas common stock in trade for employee payroll taxes due on restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $38.04 per share for a total purchase price of $7.7 million.

11. Stock-Based Compensation

Under the 2005 Equity Compensation Plan adopted by Cintas in fiscal 2006, Cintas may grant officers and key employee-partners equity compensation in the form of stock options, stock appreciation rights, restricted and unrestricted stock awards, performance awards and other stock unit awards up to an aggregate of 14,000,000 shares of Cintas' common stock. At May 31, 2013, 6,148,994 shares of common stock are reserved for future issuance under the 2005 Equity Compensation Plan. The compensation cost for stock-based awards was $23.3 million, $20.3 million and $15.2 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively. The total income tax benefit recognized in the consolidated income statement for share-based compensation arrangements was $6.6 million, $5.6 million and $4.5 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

Stock Options

Stock options are granted at the fair market value of the underlying common stock on the date of grant. The option terms are determined by the Compensation Committee of the Board of Directors, but no stock option may be exercised later than 10 years after the date of the grant. The option awards generally have 10-year terms with graded vesting in years 3 through 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:

	2013			2012			2011
Risk-free interest rate	1.3	%		2.4	%		2.5	%
Dividend yield	1.8	%		1.7	%		1.5	%
Expected volatility of Cintas' common stock	28.0	%		28.0	%		30.0	%
Expected life of the option in years	7.5			7.5			7.5

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 2013, 2012 and 2011 was $9.55, $9.48 and $8.04, respectively.

The information presented in the following table relates primarily to stock options granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans:

	Shares			Weighted Average Exercise Price
Outstanding, June 1, 2010 (1,838,530 shares exercisable)	6,467,206			$	37.63
Granted	2,030,764			32.42
Canceled	(833,267	)		38.76
Exercised	—			—
Outstanding, May 31, 2011 (1,945,207 shares exercisable)	7,664,703			36.12
Granted	1,638,907			36.26
Canceled	(1,591,480	)		36.90
Exercised	(103,013	)		32.66
Outstanding, May 31, 2012 (2,105,702 shares exercisable)	7,609,117			36.04
Granted	1,722,081			44.67
Canceled	(884,384	)		38.69
Exercised	(561,176	)		36.44
Outstanding, May 31, 2013 (1,815,795 shares exercisable)	7,885,638			$	37.60

The intrinsic value of stock options exercised was $3.7 million and $0.6 million for the fiscal years ended May 31, 2013 and 2012, respectively. The total cash received from employees as a result of employee stock option exercises for the fiscal years ended May 31, 2013 and 2012 was $14.8 million and $3.3 million, respectively. There were no stock options exercised during the fiscal year ended May 31, 2011.

The fair value of stock options vested was $13.2 million, $12.9 million and $9.0 million for the fiscal years ended May 31, 2013, 2012 and 2011, respectively.

The following table summarizes the information related to stock options outstanding at May 31, 2013:

			Outstanding Options						Exercisable Options
Range of Exercise Prices	Number Outstanding		Average Remaining Option Life		Weighted Average Exercise Price				Number Exercisable			Weighted Average Exercise Price
$ 20.29 – $ 34.05	1,720,863		6.65		$	27.01			352,058			$	26.71
34.06 – 37.83	1,338,274		7.39		34.94				97,092			36.28
37.84 – 41.98	1,959,113		6.97		38.59				377,057			39.63
41.99 – 49.30	2,867,388		7.20		44.43				989,588			43.11
$ 20.29 – $ 49.30	7,885,638		7.05		$	37.60			1,815,795			$	38.85

At May 31, 2013, the aggregate intrinsic value of stock options outstanding and exercisable was $63.8 million and $12.4 million, respectively. The weighted-average remaining contractual term of stock options exercisable is 2.3 years.

Restricted Stock Awards

Restricted stock awards consist of Cintas' common stock that is subject to such conditions, restrictions and limitations as the Compensation Committee of the Board of Directors determines to be appropriate. The vesting period is generally three years after the grant date. The recipient of restricted stock awards will have all rights of a shareholder of Cintas, including the right to vote and the right to receive cash dividends, during the vesting period. Cintas recognizes compensation expense for these restricted stock awards using the straight-line recognition method over the vesting period.

The information presented in the following table relates to restricted stock awards granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans:

	Shares			Weighted Average Grant Price
Outstanding, unvested grants at June 1, 2010	1,407,351			$	27.45
Granted	712,721			31.59
Canceled	(66,754	)		25.54
Vested	(135,936	)		39.26
Outstanding, unvested grants at May 31, 2011	1,917,382			28.22
Granted	452,267			35.95
Canceled	(188,685	)		30.62
Vested	(291,968	)		27.60
Outstanding, unvested grants at May 31, 2012	1,888,996			29.93
Granted	810,453			41.72
Canceled	(73,856	)		31.78
Vested	(610,570	)		25.40
Outstanding, unvested grants at May 31, 2013	2,015,023			$	35.97

The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2013, was $62.3 million. The weighted-average period of time over which this cost will be recognized is 2.5 years.

12. Litigation and Other Contingencies

Cintas is subject to legal proceedings, insurance receipts, legal settlements 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 consolidated financial position, consolidated results of operation or consolidated cash flows of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.

Cintas 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 alleged 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. On October 27, 2008, the United States District Court in the Eastern District of Michigan granted summary judgment in favor of Cintas limiting the scope of the putative class in the Serrano lawsuit to female applicants for service sales representative positions at Cintas locations within the state of Michigan. Consequently, all claims brought by female applicants for service sales representative positions outside of the state of Michigan were dismissed. Similarly, any claims brought by the EEOC on behalf of similarly situated female applicants outside of the state of Michigan have also been dismissed from the Serrano lawsuit. In September 2010, the Court in Serrano dismissed all private individual claims and all claims of the EEOC and the 13 individuals it claimed to represent. The EEOC appealed the District Court's summary judgment decisions and various other rulings to the United States Court of Appeals for the Sixth Circuit. On November 9, 2012, the Sixth Circuit Court of Appeals reversed the District Court's opinion and remanded the claims back to the District Court. On April 16, 2013, Cintas filed with the United States Supreme Court a Petition for a Writ of Certiorari seeking to review the judgment of the United States Court of Appeals for the Sixth Circuit.

Cintas is a defendant in another purported class action lawsuit, Blanca Nelly Avalos, et al. v. Cintas Corporation (Avalos), which was filed in the United States District Court, Eastern District of Michigan, Southern Division. The Avalos plaintiffs alleged 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 sought injunctive relief, compensatory damages, punitive damages, attorneys' fees and other remedies. The claims in Avalos originally were brought in the 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 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 was known as Mirna E. Serrano/Blanca Nelly Avalos, et al. v. Cintas Corporation (Serrano/Avalos). On March 31, 2009, the United States District Court, Eastern District of Michigan, Southern Division entered an order denying class certification to all plaintiffs in the Serrano/Avalos lawsuits. Following denial of class certification, the Court permitted the individual Avalos and Serrano plaintiffs to proceed separately. In the Avalos case, the Court dismissed the remaining claims of the individual plaintiffs who remained in that case after the denial of class certification. On May 11, 2010, Plaintiff Tanesha Davis, on behalf of all similarly situated plaintiffs in the Avalos case, filed a notice of appeal of the District Court's summary judgment order in the United States Court of Appeals for the Sixth Circuit. On May 30, 2013, the United States Court of Appeals for the Sixth Circuit affirmed the denial of class certification.

The litigation discussed above, if decided or settled adversely to Cintas, may, individually or in the aggregate, result in liability material to Cintas' consolidated financial condition, consolidated results of operation or consolidated cash flows and could increase costs of operations on an ongoing 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.

13. Operating Segment Information

Cintas classifies its businesses into four operating segments based on the types of products and services provided. The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items. 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 destruction, document imaging and document retention 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 related to the operations of Cintas' operating segments is set forth below:

(In thousands)	Rental Uniforms & Ancillary Products				Uniform Direct Sales				First Aid, Safety & Fire Protection				Document Management				Corporate				Total
May 31, 2013
Revenue	$	3,044,587			$	461,328			$	460,592			$	349,964			$	—			$	4,316,471
Gross margin	$	1,288,290			$	134,985			$	199,314			$	164,478			$	—			$	1,787,067
Selling and admin. expenses	835,249				81,739				156,232				148,636				—				1,221,856
Interest income	—				—				—				—				(409		)		(409		)
Interest expense	—				—				—				—				65,712				65,712
Income before income taxes	$	453,041			$	53,246			$	43,082			$	15,842			$	(65,303	)		$	499,908
Depreciation and amortization	$	116,867			$	8,049			$	20,832			$	43,629			$	—			$	189,377
Capital expenditures	$	140,327			$	6,908			$	11,809			$	37,442			$	—			$	196,486
Total assets	$	2,830,941			$	152,551			$	398,614			$	605,573			$	357,953			$	4,345,632
May 31, 2012
Revenue	$	2,912,261			$	433,994			$	415,703			$	340,042			$	—			$	4,102,000
Gross margin	$	1,263,710			$	129,614			$	178,465			$	166,819			$	—			$	1,738,608
Selling and admin. expenses	834,210				80,577				143,338				140,856				—				1,198,981
Interest income	—				—				—				—				(1,942		)		(1,942		)
Interest expense	—				—				—				—				70,625				70,625
Income before income taxes	$	429,500			$	49,037			$	35,127			$	25,963			$	(68,683	)		$	470,944
Depreciation and amortization	$	121,842			$	7,087			$	19,641			$	45,595			$	—			$	194,165
Capital expenditures	$	107,152			$	5,161			$	15,264			$	33,225			$	—			$	160,802
Total assets	$	2,770,491			$	136,478			$	362,128			$	556,784			$	339,825			$	4,165,706
May 31, 2011
Revenue	$	2,692,248			$	419,222			$	377,663			$	321,251			$	—			$	3,810,384
Gross margin	$	1,161,792			$	126,475			$	156,060			$	164,960			$	—			$	1,609,287
Selling and admin. expenses	822,230				78,220				134,604				133,890				—				1,168,944
Interest income	—				—				—				—				(2,030		)		(2,030		)
Interest expense	—				—				—				—				49,704				49,704
Income before income taxes	$	339,562			$	48,255			$	21,456			$	31,070			$	(47,674	)		$	392,669
Depreciation and amortization	$	122,767			$	6,720			$	18,599			$	45,381			$	—			$	193,467
Capital expenditures	$	108,557			$	5,223			$	23,215			$	45,597			$	—			$	182,592
Total assets	$	2,721,261			$	154,109			$	355,332			$	595,912			$	525,326			$	4,351,940

14. Quarterly Financial Data (Unaudited)

The following is a summary of the results of operation for each of the quarters within the fiscal years ended May 31, 2013 and 2012:

May 31, 2013 (in thousands)	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenue	$	1,051,325			$	1,060,386			$	1,075,674			$	1,129,086
Gross margin	$	445,875			$	432,036			$	441,941			$	467,215
Net income	$	76,733			$	78,027			$	74,705			$	85,977
Basic earnings per share	$	0.61			$	0.63			$	0.60			$	0.69
Diluted earnings per share	$	0.60			$	0.63			$	0.60			$	0.69
Weighted average number of shares outstanding	126,110				124,185				123,120				122,392

May 31, 2012 (in thousands)	First Quarter				Second Quarter				Third Quarter				Fourth Quarter
Revenue	$	1,017,180			$	1,019,126			$	1,012,112			$	1,053,582
Gross margin	$	439,040			$	429,797			$	425,903			$	443,868
Net income	$	68,638			$	74,350			$	76,035			$	78,614
Basic earnings per share	$	0.52			$	0.57			$	0.58			$	0.60
Diluted earnings per share	$	0.52			$	0.57			$	0.58			$	0.60
Weighted average number of shares outstanding	131,309				129,727				129,735				128,788

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 $1,300.0 million of long-term senior 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 following condensed consolidating financial statements has been fully consolidated in Cintas' consolidated financial statements. The following 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.

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, 2013 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products	$	—			$	2,314,386			$	616,726			$	220,946			$	(107,471	)		$	3,044,587
Other services	—				1,587,000				31,210				124,234				(470,560		)		1,271,884
Equity in net income of affiliates	315,442				—				—				—				(315,442		)		—
	315,442				3,901,386				647,936				345,180				(893,473		)		4,316,471
Costs and expenses (income):
Cost of rental uniforms and ancillary products	—				1,454,791				392,134				155,490				(246,118		)		1,756,297
Cost of other services	—				1,016,074				(12,694		)		77,103				(307,376		)		773,107
Selling and administrative expenses	—				1,210,755				(66,640		)		97,646				(19,905		)		1,221,856
Operating income	315,442				219,766				335,136				14,941				(320,074		)		565,211
Interest income	—				(40		)		(272		)		(28,334		)		28,237				(409		)
Interest expense (income)	—				66,584				(875		)		3				—				65,712
Income before income taxes	315,442				153,222				336,283				43,272				(348,311		)		499,908
Income taxes	—				54,474				119,556				10,479				(43		)		184,466
Net income	$	315,442			$	98,748			$	216,727			$	32,793			$	(348,268	)		$	315,442

Condensed Consolidating Income Statement

Year Ended May 31, 2012 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products	$	—			$	2,233,085			$	574,950			$	210,683			$	(106,457	)		$	2,912,261
Other services	—				1,488,163				28,660				117,791				(444,875		)		1,189,739
Equity in net income of affiliates	297,637				—				—				—				(297,637		)		—
	297,637				3,721,248				603,610				328,474				(848,969		)		4,102,000
Costs and expenses (income):
Cost of rental uniforms and ancillary products	—				1,386,320				362,803				145,293				(245,865		)		1,648,551
Cost of other services	—				955,148				(13,649		)		73,130				(299,788		)		714,841
Selling and administrative expenses	—				1,184,888				(69,882		)		(145,953		)		229,928				1,198,981
Operating income	297,637				194,892				324,338				256,004				(533,244		)		539,627
Interest income	—				(111,631		)		(589		)		(190,345		)		300,623				(1,942		)
Interest expense (income)	—				72,212				(1,543		)		(44		)		—				70,625
Income before income taxes	297,637				234,311				326,470				446,393				(833,867		)		470,944
Income taxes	—				68,752				95,793				8,814				(52		)		173,307
Net income	$	297,637			$	165,559			$	230,677			$	437,579			$	(833,815	)		$	297,637

Condensed Consolidating Income Statement

Year Ended May 31, 2011 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Revenue:
Rental uniforms and ancillary products	$	—			$	2,069,895			$	531,525			$	196,380			$	(105,552	)		$	2,692,248
Other services	—				1,395,119				340,063				109,634				(726,680		)		1,118,136
Equity in net income of affiliates	246,989				—				—				—				(246,989		)		—
	246,989				3,465,014				871,588				306,014				(1,079,221		)		3,810,384
Costs and expenses:
Cost of rental uniforms and ancillary products	—				1,305,908				330,442				132,463				(238,357		)		1,530,456
Cost of other services	—				876,359				316,650				67,997				(590,365		)		670,641
Selling and administrative expenses	—				1,065,037				17,270				92,839				(6,202		)		1,168,944
Operating income	246,989				217,710				207,226				12,715				(244,297		)		440,343
Interest income	—				(589		)		(697		)		(100,777		)		100,033				(2,030		)
Interest expense (income)	—				52,357				(2,687		)		34				—				49,704
Income before income taxes	246,989				165,942				210,610				113,458				(344,330		)		392,669
Income taxes	—				60,028				76,186				9,494				(28		)		145,680
Net income	$	246,989			$	105,914			$	134,424			$	103,964			$	(344,302	)		$	246,989

Condensed Consolidating Statement of Comprehensive Income

Year Ended May 31, 2013 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Net income	$	315,442			$	98,748			$	216,727			$	32,793			$	(348,268	)		$	315,442
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	—				(12		)		—				(1,075		)		—				(1,087		)
Change in fair value of derivatives	—				(187		)		—				—				—				(187		)
Amortization of interest rate lock agreements	—				1,952				—				—				—				1,952
Change in fair value of available-for-sale securities	—				—				14				—				—				14
Other	—				—				768				—				—				768
Other comprehensive income (loss)	—				1,753				782				(1,075		)		—				1,460
Comprehensive income	$	315,442			$	100,501			$	217,509			$	31,718			$	(348,268	)		$	316,902

Condensed Consolidating Statement of Comprehensive Income

Year Ended May 31, 2012 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Net income	$	297,637			$	165,559			$	230,677			$	437,579			$	(833,815	)		$	297,637
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	—				(18		)		—				(17,797		)		—				(17,815		)
Change in fair value of derivatives	—				(5,604		)		—				318				—				(5,286		)
Amortization of interest rate lock agreements	—				1,508				—				—				—				1,508
Change in fair value of available-for-sale securities	—				—				—				24				—				24
Other	—				—				(575		)		—				—				(575		)
Other comprehensive loss	—				(4,114		)		(575		)		(17,455		)		—				(22,144		)
Comprehensive income	$	297,637			$	161,445			$	230,102			$	420,124			$	(833,815	)		$	275,493

Condensed Consolidating Statement of Comprehensive Income

Year Ended May 31, 2011 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Net income	$	246,989			$	105,914			$	134,424			$	103,964			$	(344,302	)		$	246,989
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	—				110				—				27,234				—				27,344
Change in fair value of derivatives	—				(5,814		)		—				(282		)		—				(6,096		)
Amortization of interest rate lock agreements	—				767				—				—				—				767
Change in fair value of available-for-sale securities	—				(22		)		—				25				—				3
Other	—				—				656				—				—				656
Other comprehensive (loss) income	—				(4,959		)		656				26,977				—				22,674
Comprehensive income	$	246,989			$	100,955			$	135,080			$	130,941			$	(344,302	)		$	269,663

Condensed Consolidating Balance Sheet

As of May 31, 2013 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—			$	54,511			$	247,070			$	50,692			$	—			$	352,273
Marketable securities	—				—				5,680				—				—				5,680
Accounts receivable, net	—				355,429				96,569				44,051				—				496,049
Inventories, net	—				201,260				25,584				10,342				3,254				240,440
Uniforms and other rental items in service	—				363,662				113,024				38,917				(18,851		)		496,752
Income taxes, current	—				4,172				3,437				1,493				—				9,102
Deferred tax asset (liability)	—				534				(534		)		—				—				—
Prepaid expenses	—				7,450				12,909				4,171				—				24,530
Total current assets	—				987,018				503,739				149,666				(15,597		)		1,624,826
Property and equipment, at cost, net	—				631,480				259,586				95,637				—				986,703
Goodwill	—				—				1,449,445				68,115				—				1,517,560
Service contracts, net	—				88,157				166				3,830				—				92,153
Other assets, net	1,698,122				1,627,505				2,698,197				768,903				(6,668,337		)		124,390
	$	1,698,122			$	3,334,160			$	4,911,133			$	1,086,151			$	(6,683,934	)		$	4,345,632
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(465,247	)		$	(561,454	)		$	1,084,986			$	24,728			$	38,016			$	121,029
Accrued compensation and related liabilities	—				54,591				17,642				5,817				—				78,050
Accrued liabilities	—				67,490				193,261				11,837				(767		)		271,821
Deferred tax liability	—				—				68,231				8,938				—				77,169
Long-term debt due within one year	—				8,436				(249		)		—				—				8,187
Total current liabilities	(465,247		)		(430,937		)		1,363,871				51,320				37,249				556,256
Long-term liabilities:
Long-term debt due after one year	—				1,310,384				(11,020		)		848				767				1,300,979
Deferred income taxes	—				(6		)		216,368				(5,879		)		—				210,483
Accrued liabilities	—				—				75,571				851				—				76,422
Total long-term liabilities	—				1,310,378				280,919				(4,180		)		767				1,587,884
Total shareholders' equity	2,163,369				2,454,719				3,266,343				1,039,011				(6,721,950		)		2,201,492
	$	1,698,122			$	3,334,160			$	4,911,133			$	1,086,151			$	(6,683,934	)		$	4,345,632

Condensed Consolidating Balance Sheet

As of May 31, 2012 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—			$	58,737			$	229,287			$	51,801			$	—			$	339,825
Accounts receivable, net	—				327,442				81,243				42,176				—				450,861
Inventories, net	—				210,283				20,258				10,781				9,883				251,205
Uniforms and other rental items in service	—				337,298				101,435				35,051				(20,999		)		452,785
Income taxes, current	—				5,296				3,642				13,250				—				22,188
Prepaid expenses	—				7,905				9,288				4,029				—				21,222
Total current assets	—				946,961				445,153				157,088				(11,116		)		1,538,086
Property and equipment, at cost, net	—				605,015				263,576				83,996				—				952,587
Goodwill	—				—				1,419,535				65,840				—				1,485,375
Service contracts, net	—				71,337				326				5,159				—				76,822
Other assets, net	1,637,225				1,628,516				2,467,198				759,439				(6,379,542		)		112,836
	$	1,637,225			$	3,251,829			$	4,595,788			$	1,071,522			$	(6,390,658	)		$	4,165,706
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(465,247	)		$	(475,624	)		$	978,932			$	18,760			$	38,019			$	94,840
Accrued compensation and related liabilities	—				63,797				21,619				5,798				—				91,214
Accrued liabilities	—				72,101				176,570				13,557				(786		)		261,442
Deferred tax (asset) liability	—				(538		)		(87		)		3,184				—				2,559
Long-term debt due within one year	—				225,866				(230		)		—				—				225,636
Total current liabilities	(465,247		)		(114,398		)		1,176,804				41,299				37,233				675,691
Long-term liabilities:
Long-term debt due after one year	—				1,068,820				(11,288		)		848				786				1,059,166
Deferred income taxes	—				(6		)		199,404				5,183				—				204,581
Accrued liabilities	—				—				86,406				727				—				87,133
Total long-term liabilities	—				1,068,814				274,522				6,758				786				1,350,880
Total shareholders' equity	2,102,472				2,297,413				3,144,462				1,023,465				(6,428,677		)		2,139,135
	$	1,637,225			$	3,251,829			$	4,595,788			$	1,071,522			$	(6,390,658	)		$	4,165,706

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2013 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income	$	315,442			$	98,748			$	216,727			$	32,793			$	(348,268	)		$	315,442
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	—				16,647				135,345				13,672				—				165,664
Amortization of intangible assets	—				21,077				200				2,436				—				23,713
Stock-based compensation	23,310				—				—				—				—				23,310
Deferred income taxes	—				—				53,916				(5,893		)		—				48,023
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	—				(25,206		)		(15,326		)		(2,172		)		—				(42,704		)
Inventories, net	—				9,034				(5,292		)		626				6,629				10,997
Uniforms and other rental items in service	—				(26,364		)		(11,590		)		(4,077		)		(2,148		)		(44,179		)
Prepaid expenses	—				507				(3,620		)		(168		)		—				(3,281		)
Accounts payable	—				(55,802		)		75,034				5,794				(3		)		25,023
Accrued compensation and related liabilities	—				(9,206		)		(3,977		)		22				—				(13,161		)
Accrued liabilities	—				(5,416		)		38,099				(829		)		19				31,873
Income taxes, current	—				1,110				206				10,712				—				12,028
Net cash provided by operating activities	338,752				25,129				479,722				52,916				(343,771		)		552,748
Cash flows from investing activities:
Capital expenditures	—				(39,975		)		(131,208		)		(25,303		)		—				(196,486		)
Proceeds from redemption of marketable securities	—				—				13,899				147,579				—				161,478
Purchase of marketable securities and investments	—				(683		)		(31,075		)		(158,378		)		11,672				(178,464		)
Acquisitions of businesses, net of cash acquired	—				(67,431		)		112				(2,051		)		—				(69,370		)
Other	(60,918		)		58,589				(315,519		)		(15,609		)		332,118				(1,339		)
Net cash used in investing activities	(60,918		)		(49,500		)		(463,791		)		(53,762		)		343,790				(284,181		)
Cash flows from financing activities:
Proceeds from the issuances of debt	—				250,000				638				(638		)		—				250,000
Repayment of debt	—				(225,866		)		445				(196		)		(19		)		(225,636		)
Proceeds from exercise of stock-based compensation awards	14,807				—				—				—				—				14,807
Dividends paid	(79,723		)		—				—				(21		)		—				(79,744		)
Repurchase of common stock	(215,681		)		—				—				—				—				(215,681		)
Other	2,763				(3,989		)		769				653				—				196
Net cash (used in) provided by financing activities	(277,834		)		20,145				1,852				(202		)		(19		)		(256,058		)
Effect of exchange rate changes on cash and cash equivalents	—				—				—				(61		)		—				(61		)
Net (decrease) increase in cash and cash equivalents	—				(4,226		)		17,783				(1,109		)		—				12,448
Cash and cash equivalents at beginning of period	—				58,737				229,287				51,801				—				339,825
Cash and cash equivalents at end of period	$	—			$	54,511			$	247,070			$	50,692			$	—			$	352,273

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2012 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income	$	297,637			$	165,559			$	230,677			$	437,579			$	(833,815	)		$	297,637
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	—				102,613				40,613				12,605				—				155,831
Amortization of intangible assets	—				33,114				393				4,827				—				38,334
Stock-based compensation	20,312				—				—				—				—				20,312
Deferred income taxes	—				—				56,411				316				—				56,727
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	—				(15,280		)		(4,985		)		(3,996		)		—				(24,261		)
Inventories, net	—				(5,635		)		4,685				1,590				(2,970		)		(2,330		)
Uniforms and other rental items in service	—				(34,401		)		(19,286		)		(1,477		)		(5,115		)		(60,279		)
Prepaid expenses	—				(2,154		)		950				(292		)		—				(1,496		)
Accounts payable	—				(143,189		)		661,243				(530,611		)		—				(12,557		)
Accrued compensation and related liabilities	—				8,659				1,466				1,500				—				11,625
Accrued liabilities	—				16,929				(30,586		)		(6,732		)		18				(20,371		)
Income taxes, current	—				(4,357		)		4,712				10,335				—				10,690
Net cash provided by (used in) operating activities	317,949				121,858				946,293				(74,356		)		(841,882		)		469,862
Cash flows from investing activities:
Capital expenditures	—				(116,954		)		(26,270		)		(17,578		)		—				(160,802		)
Proceeds from redemption of marketable securities	—				—				—				665,016				—				665,016
Purchase of marketable securities and investments	—				(2,740		)		(416,100		)		(579,654		)		412,839				(585,655		)
Acquisitions of businesses, net of cash acquired	—				(19,323		)		(65		)		(5,476		)		—				(24,864		)
Other	141,350				20,090				(588,518		)		28				429,061				2,011
Net cash provided by (used in) investing activities	141,350				(118,927		)		(1,030,953		)		62,336				841,900				(104,294		)
Cash flows from financing activities:
Proceeds from the issuance of debt	—				—				(786		)		—				786				—
Repayment of debt	—				(843		)		324				—				(804		)		(1,323		)
Proceeds from exercise of stock-based compensation awards	3,341				—				—				—				—				3,341
Dividends paid	(70,800		)		—				—				(20		)		—				(70,820		)
Repurchase of common stock	(392,328		)		—				—				—				—				(392,328		)
Other	488				1,508				(574		)		(867		)		—				555
Net cash (used in) provided by financing activities	(459,299		)		665				(1,036		)		(887		)		(18		)		(460,575		)
Effect of exchange rate changes on cash and cash equivalents	—				184				1,700				(5,158		)		—				(3,274		)
Net increase (decrease) in cash and cash equivalents	—				3,780				(83,996		)		(18,065		)		—				(98,281		)
Cash and cash equivalents at beginning of period	—				54,957				313,283				69,866				—				438,106
Cash and cash equivalents at end of period	$	—			$	58,737			$	229,287			$	51,801			$	—			$	339,825

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2011 (in thousands)	Cintas Corporation				Corp. 2				Subsidiary Guarantors				Non- Guarantors				Eliminations				Cintas Corporation Consolidated
Cash flows from operating activities:
Net income	$	246,989			$	105,914			$	134,424			$	103,964			$	(344,302	)		$	246,989
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	—				103,039				36,032				11,815				—				150,886
Amortization of intangible assets	—				37,615				543				4,423				—				42,581
Stock-based compensation	15,203				—				—				—				—				15,203
Deferred income taxes	—				(4,886		)		51,996				798				—				47,908
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	—				(39,060		)		(2,079		)		(7,847		)		—				(48,986		)
Inventories, net	—				(59,223		)		(8,112		)		(2,957		)		(8,532		)		(78,824		)
Uniforms and other rental items in service	—				(45,149		)		(11,671		)		(7,179		)		5,819				(58,180		)
Prepaid expenses	—				223				2,085				(1,948		)		—				360
Accounts payable	—				(392,210		)		393,185				28,244				(4		)		29,215
Accrued compensation and related liabilities	—				12,957				(1,577		)		1,113				—				12,493
Accrued liabilities	—				(2,740		)		(6,318		)		6,875				16				(2,167		)
Income taxes, current	—				4,265				(8,858		)		(11,999		)		—				(16,592		)
Net cash provided by (used in) operating activities	262,192				(279,255		)		579,650				125,302				(347,003		)		340,886
Cash flows from investing activities:
Capital expenditures	—				(99,739		)		(68,274		)		(14,579		)		—				(182,592		)
Proceeds from redemption of marketable securities	—				—				23,206				115,850				—				139,056
Purchase of marketable securities and investments	—				(16,897		)		(55,438		)		(61,438		)		55,466				(78,307		)
Acquisitions of businesses, net of cash acquired	—				(133,378		)		(1,831		)		(36,343		)		—				(171,552		)
Other	253,387				54,296				(504,637		)		(99,797		)		291,553				(5,198		)
Net cash provided by (used in) investing activities	253,387				(195,718		)		(606,974		)		(96,307		)		347,019				(298,593		)
Cash flows from financing activities:
Proceeds from the issuance of debt	—				1,000,500				1,781				—				—				1,002,281
Repayment of debt	—				(501,316		)		(876		)		—				(16		)		(502,208		)
Dividends paid	(71,801		)		—				—				(11		)		—				(71,812		)
Repurchase of common stock	(443,690		)		—				—				—				—				(443,690		)
Other	(88		)		(4,576		)		—				55				—				(4,609		)
Net cash (used in) provided by financing activities	(515,579		)		494,608				905				44				(16		)		(20,038		)
Effect of exchange rate changes on cash and cash equivalents	—				417				—				4,153				—				4,570
Net increase (decrease) in cash and cash equivalents	—				20,052				(26,419		)		33,192				—				26,825
Cash and cash equivalents at beginning of period	—				34,905				339,702				36,674				—				411,281
Cash and cash equivalents at end of period	$	—			$	54,957			$	313,283			$	69,866			$	—			$	438,106