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Discontinued Operations
 9 Months Ended
Feb. 29, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Discontinued Operations
 
Cintas' investment in Shred-it was classified as discontinued operations for all periods presented as a result of entering into a definitive agreement on July 15, 2015 to sell the investment. During fiscal 2015, Cintas sold Storage and, as a result, its operations are also classified as discontinued operations for all periods presented.

In the quarter ended November 30, 2015, we completed the transaction to sell our investment in Shred-it. Cintas’ share of the proceeds from the sale were $578.3 million. Cintas also has the opportunity to receive up to $34.0 million in additional consideration in the future, subject to certain holdback provisions. Because of the uncertainty surrounding the holdback provisions, this amount represents a gain contingency that has not been recorded. As of May 31, 2015, the equity method investment in Shred-it was $210.1 million. Cintas’ carrying value of its investment in Shred-it exceeded its share of the underlying equity in the net assets of Shred-it (basis difference). The basis difference was amortized over the weighted average estimated useful lives of the underlying assets which generated the basis difference (approximately 9 years) and was recorded as a reduction in our share of income from Shred-it, net of tax. For the nine months ended February 29, 2016, Cintas recorded a net loss on the investment in Shred-it of $24.3 million, which included amortization of basis differences of approximately $4.8 million. After the sale of Shred-it, the basis difference no longer exists and Cintas will no longer record income or loss from the investment in Shred-it.

In the first quarter of fiscal 2015, Cintas received additional proceeds related to the contribution of its shredding business to Shred-it. The Company realized a $3.9 million gain, net of tax, as a result of the additional consideration received. During the three and nine months ended February 28, 2015, Cintas recorded a net loss on our investment in Shred-it of $6.8 million and $7.0 million, respectively.

In fiscal 2015, Cintas sold Storage, excluding certain real estate owned by Cintas, in three separate transactions to three separate buyers. Certain real estate owned by Cintas is being leased by the buyers. These lease payments do not represent a material direct cash flow of the disposed Storage business and therefore do not impact the classification of the Storage business as a discontinued operation. On July 10, 2015, Cintas sold the remaining Storage assets classified as held for sale. During the nine months ended February 29, 2016, Cintas received additional proceeds related to contingent consideration on the sale of Storage. The Company realized a pre-tax gain of $10.9 million as a result of the additional consideration received. For the nine months ended February 29, 2016, Cintas received proceeds of $24.4 million from the sale of the remaining Storage assets previously classified as held for sale and realized a pre-tax gain of $4.8 million on the sale.

Following is selected financial information included in net income (loss) from discontinued operations for the Shredding and Storage businesses:
 
Three Months Ended
 
Nine Months Ended
(In thousands)
February 29,
2016
 
February 28,
2015(1)
 
February 29,
2016
 
February 28,
2015(1)
 
 
 
 
 
 
 
 
Revenue
$
—

 
$
—

 
$
—

 
$
31,379

 
 
 
 
 
 
 
 
(Loss) income before income taxes
(679
)
 
940

 
403

 
(4,172
)
Income tax benefit (expense)
264

 
(159
)
 
(157
)
 
2,063

Gain on Storage Transactions
—

 
899

 
15,786

 
35,036

Loss on investment in Shred-it Partnership(1)
—

 
(10,781
)
 
(24,288
)
 
(4,570
)
Gain on sale of investment in Shred-it
    Partnership
—

 
—

 
374,026

 
—

Income tax benefit (expense) on net
    gain (loss)
477

 
3,653

 
(142,078
)
 
(12,891
)
Net income (loss) from discontinued
     operations
$
62


$
(5,448
)

$
223,692


$
15,466

(1) Results for the three and nine months ended February 28, 2015 related to the net loss on the investment in Shred-it were previously presented in continuing operations and were reclassified to discontinued operations as previously discussed.