Revenue Recognition

The following table presents Cintas' total revenue disaggregated by service type:



	Three Months Ended								Nine Months Ended
	February 28, 2019				February 28, 2018				February 28, 2019				February 28, 2018
(In thousands)	Revenue		%		Revenue		%		Revenue		%		Revenue		%

Uniform Rental and Facility Services	$	1,358,322	80.7	%	$	1,284,516	80.8	%	$	4,124,038	80.9	%	$	3,904,338	81.2	%
First Aid and Safety Services	149,170		8.9	%	137,327		8.7	%	455,935		8.9	%	416,999		8.7	%
Fire Protection Services	99,688		5.9	%	87,498		5.5	%	293,980		5.8	%	254,994		5.3	%
Uniform Direct Sales	75,150		4.5	%	79,797		5.0	%	224,620		4.4	%	230,751		4.8	%
Total revenue	$	1,682,330	100.0	%	$	1,589,138	100.0	%	$	5,098,573	100.0	%	$	4,807,082	100.0	%

For the three and nine months ended February 28, 2019, the percentage of revenue recognized over time as the services are performed was 95.4% and 95.6%, respectively, of Uniform Rental and Facility Services revenue, 90.6% and 90.7%, respectively, of First Aid and Safety Services revenue and 100% and 100%, respectively, of Fire Protection Services revenue. During the same periods, the Uniform Direct Sales business unit recognized 96.3% and 96.4%, respectively, of revenue at a point in time, which generally occurs when the goods are transferred to the customer. Fire Protection Services and Uniform Direct Sales are recorded within the All Other reportable segment disclosed in Note 11 entitled Segment Information.

Revenue Recognition Policy

More than 95% of the Company's revenues are derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services, performed by a Cintas employee-partner, at the customer's location of business. Revenues from our route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). The Company's remaining revenues, primarily within the Uniform Direct Sales operating segment, and representing less than 5% of the Company's total revenues, are 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.

Certain of our customer contracts, primarily within our Uniform Direct Sales business, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three or nine months ended February 28, 2019. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated condensed balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with ASC 606. These assets are included in other assets, net on the consolidated condensed balance sheet.

Additionally, in accordance with ASC 606, certain Uniform Direct Sales customer contracts contain a provision with an enforceable right of payment and the underlying product has no alternative use to Cintas. Consequently, when both aforementioned provisions are prevalent in a customer contract, the revenue is recorded for finished goods that the customer is obligated to purchase under the termination terms of the contract.

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. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. We review the deferred commission balances for impairment on an ongoing basis. Deferred 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 February 28, 2019, the current and noncurrent assets related to deferred commissions totaled $68.4 million and $203.3 million, respectively. We recorded amortization expense related to deferred commissions of $18.0 million and $52.7 million during the three and nine months ended February 28, 2019, respectively. These expenses are classified in selling and administrative expense on the consolidated condensed statements of income.