Supplemental Guarantor Information

6 Months Ended

Nov. 30, 2011

Supplemental Guarantor Information

Supplemental Guarantor Information

11.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 $1,275.0 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

THREE MONTHS ENDED NOVEMBER 30, 2011

(In thousands)

												Cintas
		Cintas				Subsidiary		Non-				Corporation
		Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Revenue:
Rental uniforms and ancillary products	$	—	$	558,143	$	141,673	$	51,276	$	(28,303)	$	722,789
Other services		—		367,926		14,511		28,838		(114,938)		296,337
Equity in net income of affiliates		74,350		—		—		—		(74,350)		—
		74,350		926,069		156,184		80,114		(217,591)		1,019,126
Costs and expenses (income):
Cost of rental uniforms and ancillary products		—		356,105		83,939		35,270		(65,067)		410,247
Cost of other services		—		236,673		3,794		18,305		(79,690)		179,082
Selling and administrative expenses		—		266,206		7,402		26,181		(2,677)		297,112
Operating income		74,350		67,085		61,049		358		(70,157)		132,685
Interest income		—		(77)		(111)		(215)		—		(403)
Interest expense (income)		—		17,813		(433)		348		—		17,728
Income before income taxes		74,350		49,349		61,593		225		(70,157)		115,360
Income taxes		—		18,231		22,753		36		(10)		41,010
Net income	$	74,350	$	31,118	$	38,840	$	189	$	(70,147)	$	74,350

CONDENSED CONSOLIDATING INCOME STATEMENT

THREE MONTHS ENDED NOVEMBER 30, 2010

(In thousands)

												Cintas
		Cintas				Subsidiary		Non-				Corporation
		Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Revenue:
Rental uniforms and ancillary products	$	—	$	505,557	$	131,978	$	47,427	$	(27,115)	$	657,847
Other services		—		341,415		136,664		28,737		(228,097)		278,719
Equity in net income of affiliates		55,866		—		—		—		(55,866)		—
		55,866		846,972		268,642		76,164		(311,078)		936,566
Costs and expenses (income):
Cost of rental uniforms and ancillary products		—		329,017		76,972		32,738		(61,256)		377,471
Cost of other services		—		225,797		115,067		17,317		(189,734)		168,447
Selling and administrative expenses		—		251,458		16,374		21,860		(1,388)		288,304
Operating income		55,866		40,700		60,229		4,249		(58,700)		102,344
Interest income		—		(159)		(189)		(46)		—		(394)
Interest expense (income)		—		12,813		(668)		16		—		12,161
Income before income taxes		55,866		28,046		61,086		4,279		(58,700)		90,577
Income taxes		—		9,661		23,843		1,209		(2)		34,711
Net income	$	55,866	$	18,385	$	37,243	$	3,070	$	(58,698)	$	55,866

CONDENSED CONSOLIDATING INCOME STATEMENT

SIX MONTHS ENDED NOVEMBER 30, 2011

(In thousands)

												Cintas
		Cintas				Subsidiary		Non-				Corporation
		Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Revenue:
Rental uniforms and ancillary products	$	—	$	1,111,891	$	283,588	$	103,859	$	(57,126)	$	1,442,212
Other services		—		725,658		31,672		58,640		(221,876)		594,094
Equity in net income of affiliates		142,988		—		—		—		(142,988)		—
		142,988		1,837,549		315,260		162,499		(421,990)		2,036,306
Costs and expenses (income):
Cost of rental uniforms and ancillary products		—		702,881		168,291		71,179		(128,698)		813,653
Cost of other services		—		457,505		1,734		36,130		(141,553)		353,816
Selling and administrative expenses		—		541,823		23,397		48,465		(6,107)		607,578
Operating income		142,988		135,340		121,838		6,725		(145,632)		261,259
Interest income		—		(157)		(238)		(373)		—		(768)
Interest expense (income)		—		35,589		(881)		354		—		35,062
Income before income taxes		142,988		99,908		122,957		6,744		(145,632)		226,965
Income taxes		—		36,897		45,409		1,683		(12)		83,977
Net income	$	142,988	$	63,011	$	77,548	$	5,061	$	(145,620)	$	142,988

CONDENSED CONSOLIDATING INCOME STATEMENT

SIX MONTHS ENDED NOVEMBER 30, 2010

(In thousands)

												Cintas
		Cintas				Subsidiary		Non-				Corporation
		Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Revenue:
Rental uniforms and ancillary products	$	—	$	1,012,908	$	264,212	$	93,807	$	(55,516)	$	1,315,411
Other services		—		672,360		258,574		51,517		(437,392)		545,059
Equity in net income of affiliates		117,143		—		—		—		(117,143)		—
		117,143		1,685,268		522,786		145,324		(610,051)		1,860,470
Costs and expenses (income):
Cost of rental uniforms and ancillary products		—		652,149		156,553		62,558		(122,274)		748,986
Cost of other services		—		439,511		217,859		31,517		(361,722)		327,165
Selling and administrative expenses		—		525,667		16,752		41,847		(2,537)		581,729
Operating income		117,143		67,941		131,622		9,402		(123,518)		202,590
Interest income		—		(354)		(470)		(100,179)		100,031		(972)
Interest expense (income)		—		25,411		(990)		14		—		24,435
Income before income taxes		117,143		42,884		133,082		109,567		(223,549)		179,127
Income taxes		—		13,170		40,870		7,941		3		61,984
Net income	$	117,143	$	29,714	$	92,212	$	101,626	$	(223,552)	$	117,143

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF NOVEMBER 30, 2011

(In thousands)

												Cintas
		Cintas				Subsidiary		Non-				Corporation
		Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	44,770	$	134,899	$	28,103	$	—	$	207,772
Marketable securities		—		—		—		129,833		—		129,833
Accounts receivable, net		—		326,852		80,559		39,939		—		447,350
Inventories, net		—		247,125		21,697		11,494		7,634		287,950
Uniforms and other rental items in service		—		325,229		91,896		34,355		(29,467)		422,013
Income taxes, current (receivable)		—		(7,644)		(1,823)		22,042		—		12,575
Deferred tax asset (liability)		—		535		58,354		(2,882)		—		56,007
Prepaid expenses and other		—		6,712		18,210		3,446		—		28,368
Total current assets		—		943,579		403,792		266,330		(21,833)		1,591,868
Property and equipment, at cost, net		—		584,612		274,327		79,725		—		938,664
Goodwill		—		—		1,416,751		66,884		—		1,483,635
Service contracts, net		—		80,491		488		5,682		—		86,661
Other assets, net		1,598,151		1,628,467		2,337,009		397,428		(5,846,571)		114,484
	$	1,598,151	$	3,237,149	$	4,432,367	$	816,049	$	(5,868,404)	$	4,215,312
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts (receivable) payable	$	(465,247)	$	(380,996)	$	899,280	$	20,080	$	38,019	$	111,136
Accrued compensation and related liabilities		—		44,820		15,340		4,212		—		64,372
Accrued liabilities		—		56,210		246,649		16,102		—		318,961
Long-term debt due within one year		—		225,863		(131)		—		—		225,732
Total current liabilities		(465,247)		(54,103)		1,161,138		40,394		38,019		720,201
Long-term liabilities:
Long-term debt due after one year		—		1,069,144		(11,399)		1,745		—		1,059,490
Deferred (credit) income taxes		—		(6)		188,875		5,563		—		194,432
Accrued liabilities		—		—		137,849		721		—		138,570
Total long-term liabilities		—		1,069,138		315,325		8,029		—		1,392,492
Total shareholders’ equity		2,063,398		2,222,114		2,955,904		767,626		(5,906,423)		2,102,619
	$	1,598,151	$	3,237,149	$	4,432,367	$	816,049	$	(5,868,404)	$	4,215,312

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MAY 31, 2011

(In thousands)

													Cintas
	Cintas					Subsidiary							Corporation
	Corporation		Corp. 2			Guarantors		Non-Guarantors			Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	54,957		$	313,283	$	69,866		$	—	$	438,106
Marketable securities	—		—			—		87,220			—		87,220
Accounts receivable, net	—		312,033			76,484		40,614			—		429,131
Inventories, net	—		204,536			24,943		13,266			6,913		249,658
Uniforms and other rental items in service	—		302,897			82,148		34,895			(26,114)		393,826
Income taxes, current	—		949			8,355		24,238			—		33,542
Deferred tax asset (liability)	—		566			47,905		(2,658		)	—		45,813
Prepaid expenses and other	—		5,738			13,732		4,011			—		23,481
Total current assets	—		881,676			566,850		271,452			(19,201)		1,700,777
Property and equipment, at cost, net	—		587,701			274,086		84,431			—		946,218
Goodwill	—		—			1,416,926		70,956			—		1,487,882
Service contracts, net	—		94,379			663		7,270			—		102,312
Other assets, net	1,778,595		1,629,598			2,070,017		369,527			(5,732,986)		114,751
	$	1,778,595	$	3,193,354		$	4,328,542	$	803,636		$	(5,752,187)	$	4,351,940
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts (receivable) payable	$	(465,247)	$	(329,430	)	$	855,739	$	11,198		$	38,019	$	110,279
Accrued compensation and related liabilities	—		55,138			20,153		4,543			—		79,834
Accrued liabilities	—		61,399			154,861		27,235			(804)		242,691
Long-term debt due within one year	—		855			480		—			—		1,335
Total current liabilities	(465,247)		(212,038		)	1,031,233		42,976			37,215		434,139
Long-term liabilities:
Long-term debt due after one year	—		1,294,674			(12,433)		1,745			804		1,284,790
Deferred (credit) income taxes	—		(7)			190,701		5,627			—		196,321
Accrued liabilities	—		—			133,427		614			—		134,041
Total long-term liabilities	—		1,294,667			311,695		7,986			804		1,615,152
Total shareholders’ equity	2,243,842		2,110,725			2,985,614		752,674			(5,790,206)		2,302,649
	$	1,778,595	$	3,193,354		$	4,328,542	$	803,636		$	(5,752,187)	$	4,351,940

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED NOVEMBER 30, 2011

(In thousands)

											Cintas
	Cintas				Subsidiary		Non-				Corporation
	Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	142,988	$	63,011	$	77,548	$	5,061	$	(145,620)	$	142,988
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	—		47,021		23,527		6,374		—		76,922
Amortization of deferred charges	—		17,305		205		2,594		—		20,104
Stock-based compensation	9,756		—		—		—		—		9,756
Deferred income taxes	—		—		(12,396)		629		—		(11,767)
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	—		(14,793)		(4,301)		(1,756)		—		(20,850)
Inventories, net	—		(42,583)		3,246		790		(721)		(39,268)
Uniforms and other rental items in service	—		(22,332)		(9,748)		(903)		3,353		(29,630)
Prepaid expenses and other	—		(974)		(4,476)		322		—		(5,128)
Accounts payable	—		(51,087)		42,294		10,636		—		1,843
Accrued compensation and related liabilities	—		(10,318)		(4,813)		(183)		—		(15,314)
Accrued liabilities	—		4,485		25,936		(4,919)		804		26,306
Income taxes payable	—		8,586		10,178		1,232		—		19,996
Net cash provided by (used in) operating activities	152,744		(1,679)		147,200		19,877		(142,184)		175,958
Cash flows from investing activities:
Capital expenditures	—		(50,166)		(23,731)		(5,935)		—		(79,832)
Proceeds from redemption of marketable securities	—		—		—		140,162		—		140,162
Purchase of marketable securities and investments	—		(1,282)		(33,394)		(189,255)		30,404		(193,527)
Acquisitions of businesses, net of cash acquired	—		(9,831)		(65)		(4,655)		—		(14,551)
Other, net	109,311		52,721		(268,817)		(27)		112,584		5,772
Net cash provided by (used in) investing activities	109,311		(8,558)		(326,007)		(59,710)		142,988		(141,976)
Cash flows from financing activities:
Repayment of debt	—		(522)		423		—		(804)		(903)
Exercise of stock-based compensation awards	78		—		—		—		—		78
Repurchase of common stock	(262,682)		—		—		—		—		(262,682)
Other, net	549		754		—		151		—		1,454
Net cash (used in) provided by financing activities	(262,055)		232		423		151		(804)		(262,053)
Effect of exchange rate changes on cash and cash  equivalents	—		(182)		—		(2,081)		—		(2,263)
Net decrease in cash and cash equivalents	—		(10,187)		(178,384)		(41,763)		—		(230,334)
Cash and cash equivalents at beginning of period	—		54,957		313,283		69,866		—		438,106
Cash and cash equivalents at end of period	$	—	$	44,770	$	134,899	$	28,103	$	—	$	207,772

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED NOVEMBER 30, 2010

(In thousands)

											Cintas
	Cintas				Subsidiary		Non-				Corporation
	Corporation		Corp. 2		Guarantors		Guarantors		Eliminations		Consolidated
Cash flows from operating activities:
Net income	$	117,143	$	29,714	$	92,212	$	101,626	$	(223,552)	$	117,143
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	—		46,558		22,383		5,622		—		74,563
Amortization of deferred charges	—		18,889		339		1,954		—		21,182
Stock-based compensation	5,799		—		—		----		—		5,799
Deferred income taxes	—		—		(6,731)		454		—		(6,277)
Changes in current assets and liabilities, net of acquisitions of businesses:
Accounts receivable, net	—		(19,216)		(4,368)		(4,190)		—		(27,774)
Inventories, net	—		(26,531)		(11,933)		(1,166)		792		(38,838)
Uniforms and other rental items in service	—		(26,556)		(6,073)		(3,597)		5,587		(30,639)
Prepaid expenses and other	—		188		(2,648)		(2,066)		—		(4,526)
Accounts payable	—		75,896		(73,488)		17,357		—		19,765
Accrued compensation and related liabilities	—		(4,480)		(9,151)		173		—		(13,458)
Accrued liabilities	—		(4,734)		(7,863)		1,711		820		(10,066)
Income taxes payable (receivable)	—		9,553		(1,076)		(6,122)		—		2,355
Net cash provided by (used in) operating activities	122,942		99,281		(8,397)		111,756		(216,353)		109,229
Cash flows from investing activities:
Capital expenditures	—		(38,392)		(43,862)		(5,880)		—		(88,134)
Proceeds from redemption of marketable securities	—		—		21,769		113,514		—		135,283
Purchase of marketable securities and investments	—		(17,693)		(43,794)		—		49,015		(12,472)
Acquisitions of businesses, net of cash acquired	—		(56,875)		—		(31,924)		—		(88,799)
Other	80,265		21,107		(176,860)		(99,528)		168,158		(6,858)
Net cash provided by (used in) investing activities	80,265		(91,853)		(242,747)		(23,818)		217,173		(60,980)
Cash flows from financing activities:
Proceeds from issuance of debt	—		—		1,781		—		—		1,781
Repayment of debt	—		(495)		521		—		(820)		(794)
Repurchase of common stock	(203,207)		—		—		—		—		(203,207)
Other	—		383		—		1,316		—		1,699
Net cash (used in) provided by financing activities	(203,207)		(112)		2,302		1,316		(820)		(200,521)
Effect of exchange rate changes on cash and cash equivalents	—		166		—		1,778		—		1,944
Net increase (decrease) in cash and cash equivalents	—		7,482		(248,842)		91,032		—		(150,328)
Cash and cash equivalents at beginning of period	—		34,905		339,701		36,675		—		411,281
Cash and cash equivalents at end of period	$	—	$	42,387	$	90,859	$	127,707	$	—	$	260,953