Item 1. FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

			Three Months Ended
(In thousands except per share data)			August 31, 2024						August 31, 2023
Revenue:
Uniform rental and facility services			$	1,933,839					$	1,826,825
Other			567,748						515,505
Total revenue			2,501,587						2,342,330
Costs and expenses:
Cost of uniform rental and facility services			981,163						947,583
Cost of other			268,293						253,176
Selling and administrative expenses			691,100						641,015
Operating income			561,031						500,556
Interest income			(1,250)						(422)
Interest expense			25,619						24,544
Income before income taxes			536,662						476,434
Income taxes			84,629						91,349
Net income			$	452,033					$	385,085
Basic earnings per share			$	1.12					$	0.94
Diluted earnings per share			$	1.10					$	0.93
Dividends declared per share			$	0.39					$	0.3375

See accompanying notes.

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended
(In thousands)			August 31, 2024						August 31, 2023
Net income			$	452,033					$	385,085
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments			3,656						2,634
Change in fair value of interest rate lock agreements, net of tax (benefit) expense of $(3,408) and $2,806, respectively			(9,956)						8,199
Amortization of interest rate lock agreements, net of tax benefit of $(513) and $(487), respectively			(1,523)						(1,442)
Other comprehensive (loss) income, net of tax (benefit) expense of $(3,921) and $2,319, respectively			(7,823)						9,391
Comprehensive income			$	444,210					$	394,476

See accompanying notes.

CINTAS CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)			August 31, 2024						May 31, 2024
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents			$	101,373					$	342,015
Accounts receivable, net			1,293,791						1,244,182
Inventories, net			399,078						410,201
Uniforms and other rental items in service			1,061,065						1,040,144
Prepaid expenses and other current assets			188,085						148,665
Total current assets			3,043,392						3,185,207
Property and equipment, net			1,554,640						1,534,168
Investments			325,651						302,212
Goodwill			3,223,528						3,212,424
Service contracts, net			311,199						321,902
Operating lease right-of-use assets, net			190,965						187,953
Other assets, net			419,332						424,951
			$	9,068,707					$	9,168,817
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	395,931					$	339,166
Accrued compensation and related liabilities			125,004						214,130
Accrued liabilities			717,093						761,283
Income taxes, current			84,622						18,618
Operating lease liabilities, current			46,537						45,727
Debt due within one year			615,702						449,595
Total current liabilities			1,984,889						1,828,519
Long-term liabilities:
Debt due after one year			2,026,448						2,025,934
Deferred income taxes			474,461						475,512
Operating lease liabilities			149,345						146,824
Accrued liabilities			412,141						375,656
Total long-term liabilities			3,062,395						3,023,926
Shareholders’ equity:
Preferred stock, no par value:			—						—
100 shares authorized, none outstanding
Common stock, no par value, and paid-in capital:			2,415,723						2,305,301
1,700,000 shares authorized
FY 2025: 775,231 shares issued and 403,258 shares outstanding
FY 2024: 773,097 shares issued and 405,008 shares outstanding
Retained earnings			10,912,033						10,617,955
Treasury stock:			(9,389,711)						(8,698,085)
FY 2025: 371,972 shares
FY 2024: 368,089 shares
Accumulated other comprehensive income			83,378						91,201
Total shareholders’ equity			4,021,423						4,316,372
			$	9,068,707					$	9,168,817

See accompanying notes.

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

			Common Stock and Paid-In Capital																		Retained Earnings						Accumulated Other Comprehensive Income						Treasury Stock												Total Shareholders' Equity
(In thousands)			Shares						Amount															Shares						Amount
Balance at June 1, 2024			773,097						$	2,305,301											$	10,617,955					$	91,201					(368,089)						$	(8,698,085)					$	4,316,372
Net income			—						—												452,033						—						—						—						452,033
Comprehensive loss, net of tax			—						—												—						(7,823)						—						—						(7,823)
Dividends			—						—												(157,955)						—						—						—						(157,955)
Stock-based compensation			—						33,367												—						—						—						—						33,367
Vesting of stock-based compensation awards			792						—												—						—						—						—						—
Stock options exercised			1,342						77,055												—						—						(407)						(76,824)						231
Repurchase of common stock			—						—												—						—						(3,476)						(614,802)						(614,802)
Balance at August 31, 2024			775,231						$	2,415,723											$	10,912,033					$	83,378					(371,972)						$	(9,389,711)					$	4,021,423

			Common Stock and Paid-In Capital																		Retained Earnings						Accumulated Other Comprehensive Income						Treasury Stock												Total Shareholders' Equity
(In thousands)			Shares						Amount															Shares						Amount
Balance at June 1, 2023			768,796						$	2,031,542											$	9,597,315					$	77,778					(361,867)						$	(7,842,649)					$	3,863,986
Net income			—						—												385,085						—						—						—						385,085
Comprehensive income, net of tax			—						—												—						9,391						—						—						9,391
Dividends			—						—												(138,272)						—						—						—						(138,272)
Stock-based compensation			—						30,242												—						—						—						—						30,242
Vesting of stock-based compensation awards			625						—												—						—						—						—						—
Stock options exercised			1,210						59,691												—						—						(472)						(59,212)						479
Repurchase of common stock			—						—												—						—						(582)						(73,276)						(73,276)
Balance at August 31, 2023			770,631						$	2,121,475											$	9,844,128					$	87,169					(362,921)						$	(7,975,137)					$	4,077,635

See accompanying notes.

CINTAS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

			Three Months Ended
(In thousands)			August 31, 2024						August 31, 2023
Cash flows from operating activities:
Net income			$	452,033					$	385,085
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			73,838						67,613
Amortization of intangible assets and capitalized contract costs			41,366						39,199
Stock-based compensation			33,367						30,242
Deferred income taxes			1,887						(1,367)
Change in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net			(49,129)						(43,892)
Inventories, net			11,318						8,541
Uniforms and other rental items in service			(20,144)						(7,414)
Prepaid expenses and other current assets and capitalized contract costs			(68,719)						(66,791)
Accounts payable			56,698						12,443
Accrued compensation and related liabilities			(86,965)						(124,408)
Accrued liabilities and other			(44,268)						(48,952)
Income taxes, current			65,450						86,646
Net cash provided by operating activities			466,732						336,945
Cash flows from investing activities:
Capital expenditures			(92,921)						(106,697)
Purchases of investments			(7,124)						(6,525)
Acquisitions of businesses, net of cash acquired			(9,436)						(55,651)
Other, net			(4,851)						(963)
Net cash used in investing activities			(114,332)						(169,836)
Cash flows from financing activities:
Issuance of commercial paper, net			166,000						—
Repayment of debt			—						(10,000)
Proceeds from exercise of stock-based compensation awards			231						479
Dividends paid			(138,237)						(117,565)
Repurchase of common stock			(614,802)						(73,276)
Other, net			(5,984)						(2,013)
Net cash used in financing activities			(592,792)						(202,375)
Effect of exchange rate changes on cash and cash equivalents			(250)						(757)
Net decrease in cash and cash equivalents			(240,642)						(36,023)
Cash and cash equivalents at beginning of period			342,015						124,149
Cash and cash equivalents at end of period			$	101,373					$	88,126

See accompanying notes.

CINTAS CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Basis of Presentation

The consolidated condensed financial statements of Cintas Corporation (Cintas, the Company, we, us or our) included herein have been prepared by Cintas, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, we suggest that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (Annual Report) filed with the SEC on July 25, 2024. See Note 1 entitled Significant Accounting Policies of "Notes to Consolidated Financial Statements" of that Annual Report for a summary of our significant accounting policies. There have been no material changes in the accounting policies followed by Cintas during the current fiscal year.

Interim results are subject to variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, adjustments (which include only normal recurring adjustments) necessary for a fair statement of the consolidated results of the interim periods shown have been made.

Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Inventories, net are comprised of the following at:

(In thousands)			August 31, 2024						May 31, 2024
Raw materials			$	13,926					$	16,664
Work in process			47,536						48,458
Finished goods			337,616						345,079
Inventories, net			$	399,078					$	410,201

Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $65.2 million and $63.1 million at August 31, 2024 and May 31, 2024, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up.

Stock Split

On May 2, 2024, the Company announced a four-for-one split of its common stock (the Stock Split), in the form of a stock dividend. Shareholders of record, as of September 4, 2024, received three additional common stock shares for each common share held, which were distributed after market close on September 11, 2024. The Company's common stock shares began trading on a post Stock-Split basis after the market opening on September 12, 2024. All references made to common stock shares, equity awards, common stock per share amounts and treasury stock shares in the accompanying consolidated condensed financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Stock Split.

.

New Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 requires additional disclosures pertaining to significant expenses and other items of an entity’s reportable operating segments. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 (fiscal 2025). Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-07 on the consolidated condensed financial statements.

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

beginning after December 15, 2024 (fiscal 2026). The Company is currently evaluating the impact of ASU 2023-09 on the consolidated condensed financial statements.

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

Note 2 - Revenue Recognition

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

(In thousands)			2024												2023
Uniform Rental and Facility Services			$	1,933,839		77.3		%							$	1,826,825		78.0		%
First Aid and Safety Services			292,567			11.7		%							260,693			11.1		%
Fire Protection Services			197,497			7.9		%							174,316			7.5		%
Uniform Direct Sales			77,684			3.1		%							80,496			3.4		%
Total revenue			$	2,501,587		100.0		%							$	2,342,330		100.0		%

The Fire Protection Services and Uniform Direct Sales operating segments are included within All Other as disclosed in Note 10 entitled Segment Information.

Revenue Recognition Policy

Approximately 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services customers, performed by a Cintas employee-partner, at the customer's location of business. Revenue from our route servicing customer contracts represent a single-performance obligation. The Company recognizes revenue over time as services are performed, based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business. The Company's performance period generally corresponds with the monthly invoice period. The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer.

We are exposed to credit losses primarily through our trade receivables. We determine the allowance for credit losses using both an estimate, based on historical rates of collections, and reserves for specific accounts identified as uncollectible. The portion of the allowance for credit losses that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform Rental and Facility Services reportable operating segment, the First Aid and Safety Services reportable operating segment and All Other because of differences in customers served and the nature of each business. We update our allowance for credit losses quarterly, considering recent write-offs and collections information and underlying economic expectations.

Costs to Obtain a Contract

The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. Capitalized commissions are classified as current or noncurrent based on the timing of when we expect to recognize the expense. The current portion is included in prepaid expenses and other current assets, and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets. As of August 31, 2024, the current and noncurrent assets related to capitalized commissions totaled $95.0 million and $265.9 million, respectively. As of May 31, 2024, the current and noncurrent assets related to capitalized commissions totaled $94.6 million and $262.5 million, respectively. The Company recorded amortization expense related to capitalized commissions of $25.9 million and $24.4 million during the three months ended August 31, 2024 and 2023, respectively. These expenses are classified in selling and administrative expenses on the consolidated condensed statements of income.

Note 3 - Leases

Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated condensed balance sheets with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated condensed balance sheets.

Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of uniform rental and facility services and other on the Company's consolidated condensed statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $21.8 million and $19.7 million for the three months ended August 31, 2024 and 2023, respectively.

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

(In thousands)			2024						2023
Cash paid for amounts included in the measurement of operating lease liabilities			$	13,328					$	12,696
Operating lease right-of-use assets obtained in exchange for new and renewed operating lease liabilities			$	13,973					$	14,286

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

			August 31, 2024						May 31, 2024
Weighted-average remaining lease term			5.20 years						5.15 years
Weighted-average discount rate			3.64%						3.48%

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

(In thousands)
2025 (remaining nine months)						$	39,570
2026						47,203
2027						37,748
2028						31,759
2029						23,645
Thereafter						36,546
Total payments						216,471
Less interest						(20,589)
Total present value of lease payments						$	195,882

Note 4 - Fair Value Measurements

All financial instruments that are measured at fair value on a recurring basis have been classified within the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated condensed balance sheet dates. These financial instruments measured at fair value on a recurring basis are summarized below:

			As of August 31, 2024																											As of May 31, 2024
(In thousands)			Level 1						Level 2						Level 3						Fair Value									Level 1						Level 2						Level 3						Fair Value
Cash and cash equivalents			$	101,373					$	—					$	—					$	101,373								$	342,015					$	—					$	—					$	342,015
Other assets, net:
Interest rate lock agreements			—						81,465						—						81,465									—						94,829						—						94,829
Total assets at fair value			$	101,373					$	81,465					$	—					$	182,838								$	342,015					$	94,829					$	—					$	436,844

Cintas’ cash and cash equivalents are generally classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. 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 fair values of Cintas' interest rate lock agreements are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy. The fair value was determined by comparing the locked rates against the benchmarked treasury rate. No other amounts included in other assets, net, are recorded at fair value on a recurring basis.

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 condensed balance sheet dates.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, Cintas records assets and liabilities at fair value on a nonrecurring basis as required under U.S. GAAP. The assets and liabilities measured at fair value on a nonrecurring basis primarily relate to assets and liabilities acquired in a business acquisition.

Note 5 - Earnings Per Share

Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. The following tables set forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas’ common shares for the three months ended August 31 (in each case as adjusted to reflect the Stock Split):

Basic Earnings per Share (In thousands except per share data)			2024						2023
Net income			$	452,033					$	385,085
Less: net income allocated to participating securities			1,654						1,560
Net income available to common shareholders			$	450,379					$	383,525
Basic weighted average common shares outstanding			403,382						407,580
Basic earnings per share			$	1.12					$	0.94

Diluted Earnings per Share (In thousands except per share data)			2024						2023
Net income			$	452,033					$	385,085
Less: net income allocated to participating securities			1,654						1,560
Net income available to common shareholders			$	450,379					$	383,525
Basic weighted average common shares outstanding			403,382						407,580
Effect of dilutive securities – employee stock options			7,114						6,709
Diluted weighted average common shares outstanding			410,496						414,289
Diluted earnings per share			$	1.10					$	0.93

For the three months ended August 31, 2024 and 2023, options granted to purchase 0.3 million and 0.6 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. The exercise prices of these options were greater than the average market price of the common stock (anti-dilutive).

Cintas announced on July 27, 2021, July 26, 2022, and July 23, 2024, that the Board of Directors (the Board) authorized share buyback programs for $1.5 billion, $1.0 billion and $1.0 billion, respectively. None of the share buyback programs have an expiration date. The following table summarizes the share buyback activity by program and period for the three months ended August 31:

			2024																					2023
Buyback Activity (In thousands except per share data)			Shares						Avg. Price per Share						Purchase Price									Shares						Avg. Price per Share						Purchase Price
July 27, 2021 (1)			—						$	—					$	—								—						$	—					$	—
July 26, 2022			2,732						173.40						473,617									—						—						—
July 23, 2024			—						—						—									—						—						—
			2,732						$	173.40					$	473,617								—						$	—					$	—
Shares acquired for taxes due (2)			744						$	189.67					$	141,185								582						$	125.80					$	73,276
Total repurchase of Cintas common stock															$	614,802																				$	73,276

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

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

In addition to the share buyback activity presented above, Cintas acquired shares of Cintas common stock, via non-cash transactions, in connection with net-share settlements of option exercises. The following table summarizes Cintas' non-cash share buyback activity for the three months ended August 31:

			2024																					2023
(In thousands except per share data)			Shares						Avg. Price per Share						Non-Cash Value									Shares						Avg. Price per Share						Non-Cash Value
Non-cash transaction activity			407						$	188.68					$	76,824								472						$	125.56					$	59,212

There were no share buybacks in the period subsequent to August 31, 2024, through October 4, 2024. From the inception of the July 26, 2022 share buyback program through October 4, 2024, Cintas has purchased 3.1 million shares of Cintas common stock in the aggregate, at an average price of $172.85 per share, for a total purchase price of $530.7 million. Cintas has made no purchases under the July 23, 2024 share buyback program.

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

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

Goodwill (In thousands)			Uniform Rental and Facility Services						First Aid and Safety Services						All Other						Total
Balance as of June 1, 2024			$	2,773,565					$	293,747					$	145,112					$	3,212,424
Goodwill acquired			2,480						372						5,655						8,507
Foreign currency translation			2,378						211						8						2,597
Balance as of August 31, 2024			$	2,778,423					$	294,330					$	150,775					$	3,223,528

Service Contracts (In thousands)			Uniform Rental and Facility Services						First Aid and Safety Services						All Other						Total
Balance as of June 1, 2024			$	290,498					$	16,203					$	15,201					$	321,902
Service contracts acquired			492						167						2,158						2,817
Service contracts amortization			(11,567)						(1,318)						(1,013)						(13,898)
Foreign currency translation			361						17						—						378
Balance as of August 31, 2024			$	279,784					$	15,069					$	16,346					$	311,199

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

			As of August 31, 2024																					As of May 31, 2024
(In thousands)			Carrying Amount						Accumulated Amortization						Net									Carrying Amount						Accumulated Amortization						Net
Service contracts			$	1,037,621					$	726,422					$	311,199								$	1,033,762					$	711,860					$	321,902
Capitalized contract costs (1)			$	806,813					$	540,927					$	265,886								$	777,535					$	515,041					$	262,494
Noncompete and consulting agreements and other			225,380						71,934						153,446									233,334						70,877						162,457
Other assets			$	1,032,193					$	612,861					$	419,332								$	1,010,869					$	585,918					$	424,951

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

Amortization expense for service contracts and other assets was $40.7 million and $38.5 million for the three months ended August 31, 2024 and 2023, respectively. These expenses are recorded in selling and administrative expenses on the consolidated condensed statements of income. As of August 31, 2024, the estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, is as follows:

Fiscal Year (In thousands)
2025 (remaining nine months)						$	116,518
2026						136,350
2027						112,757
2028						86,291
2029						72,046
Thereafter						158,770
Total future amortization expense						$	682,732

Note 7 - Debt, Derivatives and Hedging Activities

Cintas' outstanding debt is summarized as follows:

(In thousands)			Interest Rate						Fiscal Year Issued						Fiscal Year Maturity						August 31, 2024						May 31, 2024
Debt due within one year
Commercial paper			5.44		%	(1)			2025						2025						$	166,000					$	—
Senior notes (2)			3.11		%				2015						2025						50,210						50,294
Senior notes			3.45		%				2022						2025						400,000						400,000
Debt issuance costs																					(508)						(699)
Total debt due within one year																					$	615,702					$	449,595
Debt due after one year
Senior notes			3.70		%				2017						2027						$	1,000,000					$	1,000,000
Senior notes			4.00		%				2022						2032						800,000						800,000
Senior notes			6.15		%				2007						2037						236,550						236,550
Debt issuance costs																					(10,102)						(10,616)
Total debt due after one year																					$	2,026,448					$	2,025,934

(1)Variable rate debt instrument. The rate presented is the variable borrowing rate at August 31, 2024.

(2)Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate until repayment in fiscal 2025.

Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on observable market prices. The carrying value and fair value of Cintas' debt as of August 31, 2024 were $2,486.6 million and $2,464.5 million, respectively, and as of May 31, 2024 were $2,486.6 million and $2,392.8 million, respectively. During the three months ended August 31, 2024, Cintas issued $166.0 million, net of commercial paper. During the three months ended August 31, 2023, Cintas repurchased, and subsequently retired, $10.0 million of its 6.15%, 30-year senior notes. In conjunction with these transactions Cintas recognized a loss of $0.8 million, which is recorded in interest expense on the consolidated condensed statements of income for the three months ended August 31, 2023.

The credit agreement that supports our commercial paper program has capacity under the revolving credit facility of $2.0 billion. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is March 23, 2027. As of August 31, 2024, there was $166.0 million of commercial paper outstanding with a weighted average interest rate of 5.44% and no borrowings on our revolving credit facility. As of May 31, 2024, there was no commercial paper outstanding and no borrowings on our revolving credit facility. The fair value of the commercial paper, which approximates carrying value, is estimated using level 2 inputs based on observable market prices and interest rates.

Cintas uses interest rate locks to manage its overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. Cintas used interest rate locks, which represent cash flow hedges, to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2017 and fiscal 2022. For the three months ended August 31, 2024 and 2023, the amortization of the interest rate locks resulted in a decrease to other comprehensive income (loss) of $1.5 million and $1.4 million, respectively.

During fiscal 2022 and fiscal 2020, Cintas entered into interest rate lock agreements for forecasted debt issuances. The aggregate notional value of outstanding cash flow hedges was $500.0 million at both August 31, 2024 and May 31, 2024.

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

												August 31, 2024									May 31, 2024
Fiscal Year of Issuance (In thousands)															Other assets, net																					Other assets, net
2022															$	50,692																				$	56,717
2020															$	30,773																				$	38,112

The changes in fair value of the interest rate locks are recorded in other comprehensive income (loss), net of tax. These interest rate locks had no impact on net income or cash flows for the three months ended August 31, 2024 or 2023.

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 consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all of the debt covenants for all periods presented.

Note 8 - Income Taxes

In the normal course of business, Cintas provides for uncertain tax positions and the related interest and adjusts its unrecognized tax benefits and accrued interest accordingly. As of August 31, 2024 and May 31, 2024, recorded unrecognized tax benefits were $35.2 million and $32.7 million, respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheets.

The majority of Cintas' operations are in North America. Cintas is required to file U.S. 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 operations in any given period.

All U.S. federal income tax returns are closed to audit through fiscal 2020. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2018. Based on the status and resolution of the various audits and other potential regulatory developments, it is expected that the balance of unrecognized tax benefits will not materially change for the fiscal year ending May 31, 2025.

Cintas’ effective tax rate was 15.8% and 19.2% for the three months ended August 31, 2024 and 2023, respectively. The effective tax rate for both periods was impacted by certain discrete items (primarily the tax accounting for stock-based compensation).

Note 9 - Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax:

(In thousands)			Foreign Currency						Unrealized Income on Interest Rate Locks						Other						Total
Balance at June 1, 2024			$	(18,292)					$	108,893					$	600					$	91,201
Other comprehensive income (loss) before reclassifications			3,656						(9,956)						—						(6,300)
Amounts reclassified from accumulated other comprehensive income (loss)			—						(1,523)						—						(1,523)
Net current period other comprehensive income (loss)			3,656						(11,479)						—						(7,823)
Balance at August 31, 2024			$	(14,636)					$	97,414					$	600					$	83,378

(In thousands)			Foreign Currency						Unrealized Income on Interest Rate Locks						Other						Total
Balance at June 1, 2023			$	(17,001)					$	96,714					$	(1,935)					$	77,778
Other comprehensive income before reclassifications			2,634						8,199						—						10,833
Amounts reclassified from accumulated other comprehensive income (loss)			—						(1,442)						—						(1,442)
Net current period other comprehensive income			2,634						6,757						—						9,391
Balance at August 31, 2023			$	(14,367)					$	103,471					$	(1,935)					$	87,169

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

Details about Accumulated Other Comprehensive Income (Loss) Components			Amount Reclassified from Accumulated Other Comprehensive Income (Loss)									Affected Line in the Consolidated Condensed Statements of Income
(In thousands)			2024						2023
Amortization of interest rate locks			$	2,036					$	1,929														Interest expense
Tax expense			(513)						(487)															Income taxes
Amortization of interest rate locks, net of tax			$	1,523					$	1,442

Note 10 - Segment Information

Cintas’ reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable 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 the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ operating segments, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other.

Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are revenue and operating income. The accounting policies of the operating segments are the same as those described in Note 1 entitled Basis of Presentation.

Information related to the operations of Cintas’ reportable operating segments and All Other is set forth below:

(In thousands)			Uniform Rental and Facility Services						First Aid and Safety Services						All Other						Corporate (1)						Total
As of and for the three months ended August 31, 2024
Revenue			$	1,933,839					$	292,567					$	275,181					$	—					$	2,501,587
Operating income			$	446,438					$	71,288					$	43,305					$	—					$	561,031
Total assets			$	7,588,895					$	756,833					$	621,606					$	101,373					$	9,068,707
As of and for the three months ended August 31, 2023
Revenue			$	1,826,825					$	260,693					$	254,812					$	—					$	2,342,330
Operating income			$	406,529					$	59,580					$	34,447					$	—					$	500,556
Total assets			$	7,346,364					$	723,687					$	561,504					$	88,126					$	8,719,681

(1) Corporate assets include cash and cash equivalents and marketable securities, if applicable, in all periods.

Note 11 - 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 operations or consolidated cash flows of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.

The Company is a defendant in a purported class action lawsuit, City of Laurel, Mississippi v. Cintas Corporation No. 2, filed on March 12, 2021. This is a contract dispute whereby plaintiffs allege that Cintas breached its contracts with participating public agencies and seek, among other things, contract-based damages. In March 2024, an agreement in principle was reached with the plaintiff which would require a one-time monetary payment related to the contract dispute of $45.0 million, which was accrued for and included in accrued liabilities on the consolidated condensed balance sheet at August 31, 2024. The amount reserved for this matter did not have a material impact on the consolidated condensed statements of income for any period presented. The Company will also make certain future investments such as people and technology. These future investments are not expected to be material to the Company. The tentative settlement remains subject to confirmatory discovery and approval of the U.S. District Court for the District of Nevada, however, we do not anticipate any material changes in the amounts reflected in the consolidated condensed financial statements.

The Company, the Board of Directors, Scott Farmer (Executive Chairman) and the Investment Policy Committee are defendants in a purported class action, filed on December 13, 2019, pending in the U.S. District Court for the Southern District of Ohio alleging violations of The Employee Retirement Income Security Act of 1974 (ERISA). The lawsuit asserts that the defendants improperly managed the costs of the employee retirement plan, breached their fiduciary duties in failing to investigate and select lower cost alternative funds and failed to monitor and control the employee retirement plan’s recordkeeping costs. In November 2023, an agreement in principle was reached with the plaintiffs, which would require a payment of an immaterial amount that would be covered by the Company's insurance. The settlement received final approval by the U.S. District Court for the Southern District of Ohio in August 2024.