Business Strategy
Cintas helps more than one million businesses of all types and sizes, primarily
in the U.S., as well as Canada, Latin America, Europe and Asia, get READY™ to
open their doors with confidence every day by providing a wide range of products
and services that enhance our customers' image and help keep their facilities
and employees clean, safe and looking their best. With products and services
including uniforms, mats, mops, restroom supplies, first aid and safety
products, fire extinguishers and testing, and training and compliance courses,
Cintas helps customers get Ready for the Workday®.

We are 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 and safety services and fire
protection products and services.

Cintas' principal objective is "to exceed customers' expectations in order to
maximize the long-term value of Cintas for shareholders and working partners,"
and it provides the framework and focus for Cintas' business strategy. This
strategy is to achieve revenue growth for all our products and services by
increasing our penetration at existing customers and by broadening our customer
base to include business segments to which we have not historically served. We
will also continue to identify additional product and service opportunities for
our current and future customers.

To pursue the strategy of increasing penetration, we have a highly talented and
diverse team of service professionals visiting our customers on a regular basis.
This frequent contact with our customers enables us to develop close personal
relationships. The combination of our distribution system and these strong
customer relationships provides a platform from which we launch additional
products and services.

We pursue the strategy of broadening our customer base in several ways. Cintas
has a national sales organization introducing all our products and services to
prospects in all business segments. Our broad range of products and services
allows our sales organization to consider any type of business a prospect. We
also broaden our customer base through geographic expansion, especially in our
first aid and safety and fire protection businesses. Finally, we evaluate
strategic acquisitions as opportunities arise.

Results of Operations
This Management's Discussion and Analysis of Financial Condition and Results of
Operations focuses on discussion of fiscal 2020 results compared to 2019
results. For discussion of fiscal 2019 results compared to fiscal 2018 results,
see the "Management's Discussion and Analysis of Financial Condition and Results
of Operations" within our Annual Report on Form 10-K for the fiscal year ended
May 31, 2019, filed with the SEC on July 26, 2019.

Cintas classifies its business into two reportable operating segments and places
the remainder of its operating segments in an All Other category. Cintas' two
reportable operating segments are the Uniform Rental and Facility Services
operating segment and the First Aid and Safety Services operating segment. 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, carpet
and tile cleaning services 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' business, which
consists of Fire Protection Services operating segment and the Uniform Direct
Sale operating segment, is included in All Other. These operating segments
consist of fire protection products and services and the direct sale of uniforms
and related items. Cintas evaluates operating segment performance based on
revenue and income before income taxes. Revenue and income before income taxes
for each of these reportable operating segments for the years ended May 31,
2020, 2019 and 2018 are presented in   Note 14   entitled Operating Segment
Information of "  Notes to Consolidated Financial Statements  ." The Company
regularly reviews its operating segments for reporting purposes based on the
information its chief operating decision maker regularly reviews for purposes of
allocating resources and assessing performance and makes changes when
appropriate.
                                                                            

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In March 2020, the World Health Organization characterized a novel strain of
coronavirus (COVID-19) as a pandemic. Through the first three quarters of fiscal
2020, the COVID-19 pandemic did not have a significant impact on our business.
However, efforts to contain the spread of COVID-19 intensified during our fiscal
2020 fourth quarter. Most states and municipalities within the U.S. enacted
temporary closures of businesses, issued quarantine orders and took other
restrictive measures in response to the COVID-19 pandemic. Within the U.S., our
business was designated an essential business, which allowed us to continue to
serve customers that remained open.

We have operations throughout the U.S. and participate in a global supply chain.
During the fourth quarter of fiscal 2020, the existence of the COVID-19
pandemic, the fear associated with the COVID-19 pandemic and the reactions of
governments around the world in response to the COVID-19 pandemic to regulate
the flow of labor and products and impede the business of our customers,
impacted our ability to conduct normal business operations, which had an adverse
effect on our business.

In response to the impact of COVID-19, Cintas put in place health and safety
measures to keep Cintas employees, contractors and customers safe. These health
and safety measures have not materially impacted our ability to service our
customers. Many of Cintas' customers were also impacted by COVID-19 and we did
see an impact on some customer's ability to pay. While there was minimal
disruption to our supply chain, Cintas did experience an increase in inventory
caused by the impact of COVID-19. See   Note 1   entitled Significant Accounting
Policies of "  Notes to Consolidated Financial Statements  " for additional
detail on steps taken to assess the higher collection risk related to our
customers and the additional reserve placed on inventory.

Cintas also initiated certain activities to reduce operating costs and better
align its workforce with the needs of its ongoing business. During the fourth
quarter of fiscal 2020, Cintas recorded $24.5 million in employee termination
costs and $9.2 million in long-lived asset impairment costs. See   N    ote 1
entitled Significant Accounting Policies of "  Notes to Consolidated Financial
Statements  ." The impact of the COVID-19 pandemic is fluid and continues to
evolve, and therefore, we cannot predict the extent to which our business,
consolidated results of operations, consolidated financial condition or
liquidity will ultimately be impacted.
                                                                            

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The following table sets forth certain consolidated statements of income data as
a percent of revenue by reportable operating segment, All Other and in total for
the fiscal years ended May 31:
                                                           2020        2019 

2018

Revenue:


Uniform Rental and Facility Services                      79.7%       80.6%       81.0%
First Aid and Safety Services                             10.0%        9.0%        8.7%
All Other                                                 10.3%       10.4%       10.3%
Total revenue                                             100.0%      100.0%      100.0%

Cost of sales:
Uniform Rental and Facility Services                      54.1%       54.5%       55.0%
First Aid and Safety Services                             52.2%       52.0%       52.9%
All Other                                                 58.2%       57.4%       57.5%
Total cost of sales                                       54.4%       54.6%       55.1%

Gross margin:
Uniform Rental and Facility Services                      45.9%       45.5%       45.0%
First Aid and Safety Services                             47.8%       48.0%       47.1%
All Other                                                 41.8%       42.6%       42.5%
Total gross margin                                        45.6%       45.4%       44.9%

Selling and administrative expenses:
Uniform Rental and Facility Services                      28.1%       27.6%       28.6%
First Aid and Safety Services                             32.7%       33.4%       33.7%
All Other                                                 34.9%       33.3%       33.9%
Total selling and administrative expenses                 29.2%       28.7% 

29.6%



G&K Services, Inc. integration expenses                     -%         0.2% 

0.6%



Gain on sale of a cost method investment                    -%         1.0%         -%

Interest expense, net                                      1.5%        1.5%        1.7%

Income from continuing operations before income taxes 14.9% 16.0%


      13.0%



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Fiscal 2020 Compared to Fiscal 2019
Fiscal 2020 total revenue was $7.1 billion, an increase of 2.8% over the prior
fiscal year. Revenue increased organically by 3.1% as a result of increased
sales volume. Organic growth adjusts for the impact of acquisitions, foreign
currency exchange rate fluctuations and workday differences. Total revenue was
positively impacted by 0.2% due to acquisitions, negatively impacted by 0.1% due
to foreign currency exchange rate fluctuations and negatively impacted by 0.4%
due to one less workday in fiscal 2020 compared to fiscal 2019.

As previously discussed, the government enactment of temporary closures of
certain businesses in response to COVID-19 impacted our ability to service some
of our customers during the fourth quarter of fiscal 2020. As a result, revenue
in the fourth quarter was negatively impacted by COVID-19. Due to the constantly
changing impact of COVID-19, uncertainty remains about the pace of the economic
recovery and about its impact on future Cintas consolidated financial results.

Organic growth by quarter for fiscal 2020 is as follows:


                                          Organic Growth

First quarter ended August 31, 2019            8.3%

Second quarter ended November 30, 2019 7.3% Third quarter ended February 29, 2020 5.7% Fourth quarter ended May 31, 2020

              -8.4%

For the fiscal year ended May 31, 2020 3.1%





Uniform Rental and Facility Services reportable operating segment revenue
consists predominantly of revenue derived from the rental of corporate identity
uniforms and other garments, including flame resistant clothing, and the rental
and/or sale of mats, mops, shop towels, restroom supplies and other rental
services. Revenue from the Uniform Rental and Facility Services reportable
operating segment increased 1.6% compared to fiscal 2019 due to an organic
growth increase of 2.0%. Revenue growth was positively impacted by 0.1% due to
acquisitions, negatively impacted by 0.1% due to foreign currency exchange rate
fluctuations and negatively impacted by 0.4% due to one less workday in fiscal
2020 compared to fiscal 2019. Revenue growth was a result of new business, the
penetration of additional products and services into existing customers and
price increases, partially offset by lost business. New business growth resulted
from an increase in the number and productivity of sales representatives.
Generally, sales productivity improvements are due to increased tenure and
improved training, which produce a higher number of products and services sold.

Other revenue, consisting of revenue from the First Aid and Safety Services
reportable operating segment and All Other, increased 7.6% compared to fiscal
2019. Revenue increased organically by 7.5% primarily due to improved sales
representative productivity and the increased sales of personal protective
equipment, offset by a decrease in sales related to customers in All Other as a
result of the impact from COVID-19. Revenue growth was positively impacted by
0.5% due to acquisitions and negatively impacted by 0.4% due to one less workday
in fiscal 2020 compared to fiscal 2019.

Cost of uniform rental and facility services increased 0.9% compared to fiscal
2019. Cost of uniform rental and facility services consists primarily of
production expenses, delivery expenses and the amortization of in service
inventory, including uniforms, mats, shop towels and other ancillary items. The
cost of uniform rental and facility services increase compared to fiscal 2019
was due to increased Uniform Rental and Facility Services reportable operating
segment sales volume from organic growth, partially offset by fewer inventory
purchases and a reduced amount of inventory put in service during the fourth
quarter of fiscal 2020.

Cost of other consists primarily of cost of goods sold (predominantly first aid
and safety products, uniforms and fire protection products), delivery expenses
and distribution expenses in the First Aid and Safety Services reportable
operating segment and All Other. Cost of other increased 8.2% in fiscal 2020
compared to fiscal 2019. The increase was primarily related to the increased
sales volumes in the First Aid and Safety Services reportable operating segment
and an increase in the proportion of sales from personal protective equipment.

Selling and administrative expenses increased $90.4 million, or 4.6%, compared
to fiscal 2019, primarily due to increases in labor and other employee-partner
related expenses. In addition, as previously discussed, Cintas
                                                                            

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initiated certain activities to reduce operating costs and better align its
workforce with the needs of its ongoing business. During the fourth quarter of
fiscal 2020, Cintas recorded $24.5 million in employee termination costs and
$9.2 million in long-lived asset impairment costs.

Operating income in fiscal 2019 was negatively impacted by $14.4 million of
integration expenses incurred in connection with the G&K Services, Inc. (G&K)
acquisition. The after-tax effect of these integration expenses represents a
negative impact on diluted earnings per share of $0.10 per share in fiscal 2019.
No material integration expenses were recorded in fiscal 2020.

During fiscal 2019, Cintas sold a cost method investment for $73.3 million, resulting in a pre-tax gain of $69.4 million. The after-tax effect of the one-time gain represents a positive impact on diluted earnings per share of $0.47 per share.



Net interest expense (interest expense less interest income) was $104.4 million
in fiscal 2020 compared to $100.5 million in fiscal 2019. The increase in
interest expense in fiscal 2020 was due to the timing of interest being incurred
on our term loan in the current year (twelve months as opposed to one month in
fiscal 2019), partially offset by lower commercial paper borrowings in fiscal
2020 compared to fiscal 2019.
Income before income taxes was $1,058.3 million, a decrease of $44.1 million, or
4.0%, compared to fiscal 2019. The decrease in income before income taxes was
primarily due to the negative impact of COVID-19, as previously discussed, as
well as the fiscal 2019 one-time gain on sale of a cost method investment.

Cintas' effective tax rate on continuing operations was 17.2% for fiscal 2020
compared to 19.9% in fiscal 2019. The effective tax rate in both periods was
impacted by certain permanent differences (primarily the tax accounting for
stock-based compensation).

Net income from continuing operations for fiscal 2020 of $876.4 million was a
0.7% decrease compared to fiscal 2019. Diluted earnings per share from
continuing operations of $8.11 was a 1.8% increase compared to fiscal 2019
diluted earnings per share from continuing operations of $7.97. Diluted earnings
per share from continuing operations increased primarily due to the positive
impact from the lower diluted weighted average common shares outstanding during
fiscal 2020.

Uniform Rental and Facility Services Reportable Operating Segment
Uniform Rental and Facility Services reportable operating segment revenue
increased $91.1 million, or 1.6%, and the cost of uniform rental and facility
services increased $27.5 million, or 0.9%, due to the reasons previously
discussed. The reportable operating segment's fiscal 2020 gross margin was 45.9%
of revenue compared to 45.5% in fiscal 2019. The increase in gross margin was
driven by new business sold by sales representatives, penetration of additional
products and services into existing customers and continuous improvements in
process efficiency.

Selling and administrative expenses for the Uniform Rental and Facility Services
reportable operating segment increased $50.1 million in fiscal 2020 compared to
fiscal 2019. Selling and administrative expense as a percent of revenue for
fiscal 2020 was 28.1% compared to 27.6% in fiscal 2019. The increase in selling
and administrative expenses as a percent of revenue was due to increases in
labor and other employee-partner related expenses as well as impacts caused by
COVID-19. In the fourth quarter of fiscal 2020, the Uniform Rental and Facility
Services reportable operating segment initiated certain activities to reduce
operating costs and better align its workforce with the needs of its ongoing
business. During the fourth quarter of fiscal 2020, the reportable operating
segment recorded $20.2 million in employee termination costs and $9.2 million in
long-lived asset impairment costs. Due to the constantly changing impact of
COVID-19, it is uncertain if similar additional activities will be initiated in
the future.

The Uniform Rental and Facility Services reportable operating segment incurred
$14.4 million of integration expenses directly related to the G&K acquisition in
fiscal 2019, which consisted primarily of facility closure expenses. There were
no such expenses incurred in fiscal 2020.

Income before income taxes increased $27.8 million to $1,004.6 million for
fiscal 2020 compared to fiscal 2019. Income before income taxes as a percent of
revenue at 17.8% increased 20 basis points from 17.6% in fiscal 2019. The
increase was primarily due to the increase in gross margin, which was partially
offset by the previously discussed impacts of COVID-19.
                                                                            

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First Aid and Safety Services Reportable Operating Segment
First Aid and Safety Services reportable operating segment revenue increased
$89.1 million in fiscal 2020, a 14.4% increase compared to fiscal 2019. Revenue
increased organically by 14.8% as a result of new business and sales
productivity increases, penetration of additional products and services into
existing customers and sales of personal protective equipment in response to
COVID-19. Revenue growth was negatively impacted by 0.4% due to one less workday
in fiscal 2020 compared to fiscal 2019.

Cost of sales for the First Aid and Safety Services reportable operating segment
increased $47.5 million, or 14.7%, in fiscal 2020, primarily due to higher sales
volume. Gross margin for the First Aid and Safety Services reportable operating
segment is defined as revenue less cost of goods, warehouse expenses, service
expenses and training expenses. The gross margin as a percent of revenue was
47.8% for fiscal 2020 compared to 48.0% in fiscal 2019. The decrease was
primarily driven by an increase in the proportion of sales of personal
protective equipment as a result of the impact of COVID-19.

Selling and administrative expenses for the First Aid and Safety Services
reportable operating segment increased by $24.8 million, or 12.0%, in fiscal
2020 compared to fiscal 2019 due to increased labor and other employee-partner
related expenses. Selling and administrative expenses as a percent of revenue
were 32.7% in fiscal 2020 compared to 33.4% in fiscal 2019. The decrease in
selling and administrative expenses as a percent of revenue was due to revenue
growing at a faster pace than labor and employee-partner related expenses.

Income before income taxes for the First Aid and Safety Services reportable operating segment was $106.9 million in fiscal 2020, an increase of $16.8 million, or 18.7%, compared to fiscal 2019. Income before income taxes as a percent of revenue at 15.1%, increased from 14.5% in fiscal 2019 due to the previously discussed growth in revenue and improvement in selling and administrative expenses as a percent of revenue.



Liquidity and Capital Resources
The following table summarizes our cash flows and cash and cash equivalents as
of and for the fiscal years ended May 31:
(In thousands)                                    2020              2019

Net cash provided by operating activities $ 1,291,483 $ 1,067,862 Net cash used in investing activities $ (285,398) $ (235,638) Net cash used in financing activities $ (955,207) $ (873,305)

Cash and cash equivalents at end of year $ 145,402 $ 96,645

Cash and cash equivalents as of May 31, 2020 and 2019 include $30.2 million and $28.5 million, respectively, that is located outside of the U.S.



Cash flows provided by operating activities have historically supplied us with a
significant source of liquidity. We generally use these cash flows to fund most,
if not all, of our operations and expansion activities and dividends on our
common stock. We may also use cash flows provided by operating activities, as
well as proceeds from long-term debt and short-term borrowings, to fund growth
and expansion opportunities, as well as other cash requirements such as the
repurchase of our common stock and payment of long-term debt.

The disruption from COVID-19 negatively impacted Cintas' fiscal 2020 fourth
quarter financial results, however, net cash flow provided by operating
activities in the fourth quarter was not significantly impacted. At May 31,
2020, our short-term liquidity position remained solid, as our cash flows from
operating activities are expected to remain sufficient to provide us with
adequate levels of short-term liquidity. In addition, we have access to $1.0
billion of short-term debt from our revolving credit facility. However, our
long-term liquidity position remains unclear due to the constantly changing
scope and nature of the impacts of COVID-19. Accordingly, we have taken
proactive measures to maintain financial flexibility within the landscape of the
COVID-19 pandemic. We believe the Company has sufficient liquidity to operate in
the current business environment as a result of these actions. In order to
preserve cash during this time of uncertainty, we plan to limit/reduce capital
expenditures to essential business needs. Also, we will limit share buybacks
until we obtain more certainty regarding the impacts of COVID-19. Acquisitions
and dividends remain strategic objectives, however, they will be dependent on
the economic outlook and liquidity of the Company.
                                                                            

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Net cash provided by operating activities was $1.3 billion for fiscal 2020,
which was an increase of $223.6 million compared to fiscal 2019. The increase
was primarily the result of favorable changes in working capital, specifically
accounts receivable and inventories.

Net cash used in investing activities was $285.4 million in fiscal 2020 compared
to $235.6 million in fiscal 2019. Net cash used in investing activities includes
capital expenditures, purchases of investments, proceeds from the sale of
assets, cost method investments and businesses and cash paid for acquisitions of
businesses. Capital expenditures were $230.3 million and $276.7 million for
fiscal 2020 and fiscal 2019, respectively. Capital expenditures for fiscal 2020
included $183.4 million for the Uniform Rental and Facility Services reportable
operating segment and $35.7 million for the First Aid and Safety Services
reportable operating segment. Cash paid for acquisitions of businesses, net of
cash acquired, was $53.7 million and $9.8 million for fiscal 2020 and fiscal
2019, respectively. The acquisitions in both fiscal 2020 and 2019 occurred in
our Uniform Rental and Facility Services reportable operating segment, our First
Aid and Safety Services reportable operating segment and our Fire Protection
operating segment, which is included in All Other. In fiscal 2020, investing
activities included proceeds of $13.3 million from the sale of assets, and in
fiscal 2019, included proceeds of $73.3 million from the sale of a cost method
investment and $3.2 million from the sale of a business included in discontinued
operations. Net cash used in investing activities also included $10.0 million
and $17.8 million of investment purchases during fiscal 2020 and fiscal 2019,
respectively.

Net cash used in financing activities was $955.2 million for fiscal 2020,
compared to $873.3 million in fiscal 2019. The increase in cash used from
financing activities from fiscal 2019 is primarily due to the payment of the
$312.5 million of debt in fiscal 2020 versus issuance of $312.5 million of debt
in fiscal 2019, partially offset by a decrease in cash used to repurchase common
stock. On August 2, 2016, we announced that the Board of Directors authorized a
$500.0 million share buyback program. This program was completed in November
2018. On October 30, 2018, we announced that the Board of Directors authorized a
$1.0 billion share buyback program, which does not have an expiration date. On
October 29, 2019, we announced the Board of Directors authorized a new
$1.0 billion share buyback program, which does not have an expiration date. The
following table summarizes the buyback activity by program and fiscal year ended
May 31:
                                                        2020                                                                                         2019
Buyback Program
(In thousands except per                            Avg. Price                                                        Avg. Price
share data)                      Shares              per Share          Purchase Price             Shares              per Share          Purchase Price

August 2, 2016                          -          $        -          $            -                 2,130          $   192.55          $      410,003
October 30, 2018                    1,607          $   246.19          $      395,681                 2,673          $   203.30          $      543,442
October 29, 2019                        -          $        -          $            -                     -          $        -          $            -
                                    1,607          $   246.19          $      395,681                 4,803          $   198.53          $      953,445



There were no share buybacks in the period subsequent to May 31, 2020 through
July 29, 2020, under any share buyback program. From the inception of the
October 30, 2018 share buyback program through July 29, 2020, Cintas has
purchased a total of 4.3 million shares of Cintas common stock at an average
price of $219.42 for a total purchase price of $939.1 million. In addition, for
the fiscal year ended May 31, 2020, Cintas acquired 0.3 million shares of Cintas
common stock in satisfaction of employee payroll taxes due on restricted stock
awards that vested during the fiscal year. These shares were acquired at an
average price of $260.89 per share for a total purchase price of $68.8 million.
For the fiscal year ended May 31, 2019, Cintas acquired 0.3 million shares of
Cintas common stock in satisfaction of employee payroll taxes due on restricted
awards that vested during the fiscal year. These shares were acquired at an
average price of 204.50 per share for a total purchase price of $62.9 million.
On October 29, 2019, Cintas declared an annual cash dividend of $2.55 per share
on outstanding common stock, a 24.4% increase over the annual dividend paid in
the prior year. The dividend was paid on December 6, 2019, to shareholders of
record as of November 8, 2019. This marked the 37th consecutive year that Cintas
has increased its annual dividend, every year since going public in 1983.

During the fiscal year ended May 31, 2020, Cintas paid a net total of $112.5
million on commercial paper borrowings and paid off the term loan balance of
$200.0 million with cash on hand. During the fiscal year ended May 31, 2019,
Cintas issued $112.5 million, net of commercial paper borrowings and received
proceeds of $200.0 million as a result of a new term loan.

                                                                            

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The following table summarizes Cintas' outstanding debt at May 31:


                                       Interest             Fiscal Year            Fiscal Year
(In thousands)                           Rate                  Issued                Maturity                2020                 2019

Debt due within one year
Commercial paper                            2.68  % (1)         2019                   2020             $         -          $   112,500
Term loan                                   3.06  % (1)         2019                   2020                       -              200,000
Debt issuance costs                                                                                               -                 (236)
Total debt due within one year                                                                          $         -          $   312,264

Debt due after one year
Senior notes                                4.30  %             2012                   2022             $   250,000          $   250,000
Senior notes                                2.90  %             2017                   2022                 650,000              650,000
Senior notes                                3.25  %             2013                   2023                 300,000              300,000
Senior notes (2)                            2.78  %             2013                   2023                  51,250               51,684
Senior notes (3)                            3.11  %             2015                   2025                  51,637               51,973
Senior notes                                3.70  %             2017                   2027               1,000,000            1,000,000
Senior notes                                6.15  %             2007                   2037                 250,000              250,000

Debt issuance costs                                                                                         (13,182)             (16,150)
  Total debt due after one year                                                                         $ 2,539,705          $ 2,537,507

(1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2019.



(2)  Cintas assumed these senior notes with the acquisition of 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. The principal amount of these notes
is $50.0 million with a stated interest rate of 3.73%.
(3)  Cintas assumed these senior notes with the acquisition of 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. The principal amount of these notes
is $50.0 million with a stated interest rate of 3.88%.

The credit agreement that supports our commercial paper program was amended and
restated on May 24, 2019. The amendment increased the capacity of the revolving
credit facility from $600.0 million to $1.0 billion and created a new term loan
of $200.0 million. The credit agreement has an accordion feature that provides
Cintas the ability to request increases to the borrowing commitments under
either the revolving credit facility or the term loan of up to $250.0 million in
the aggregate, subject to customary conditions. The maturity date of the
revolving credit facility is May 23, 2024, and the maturity date of the term
loan was May 23, 2020. As of May 31, 2020, there was no commercial paper
outstanding and no borrowings on our credit facility. As of May 31, 2019, there
was $112.5 million of commercial paper outstanding with a weighted average
interest rate of 2.7% and maturity dates less than 30 days and no borrowings on
our revolving credit facility.

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.

Our access to the commercial paper and long-term debt markets has historically
provided us with sources of liquidity. We do not anticipate having difficulty in
obtaining financing from those markets in the future in view of our favorable
experiences in the debt markets in the recent past. However, the COVID-19
pandemic, which has caused disruption in the capital markets, could make
financing more difficult and/or expensive. Additionally, our ability to continue
to access the commercial paper and long-term debt markets on favorable interest
rate and other terms will depend, to a significant degree, on the ratings
assigned by the credit rating agencies to our indebtedness.
                                                                            

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As of May 31, 2020, our ratings were as follows:


       Rating Agency              Outlook        Commercial Paper       Long-term Debt

Standard & Poor's                Negative              A-2                    A-
Moody's Investors Service         Stable               P-2                    A3



Standard and Poor's change in outlook from stable to negative reflects the
inherent uncertainty regarding the spread of COVID-19 and the potential impact
to Cintas' operating conditions, which could result in Cintas being unable to
maintain adjusted leverage of less than two times total debt to EBITDA.

In the event that the ratings of our commercial paper or our outstanding
long-term debt issues were substantially lowered or withdrawn for any reason, or
if the ratings assigned to any new issue of long-term debt securities were
significantly lower than those noted above, particularly if we no longer had
investment grade ratings, our ability to access the debt markets may be
adversely affected. In addition, in such a case, our cost of funds for new
issues of commercial paper and long-term debt would be higher than our cost of
funds would have been had the ratings of those new issues been at or above the
level of the ratings noted above. The rating agency ratings are not
recommendations to buy, sell or hold our commercial paper or debt securities.
Each rating may be subject to revision or withdrawal at any time by the
assigning rating organization and should be evaluated independently of any other
rating. Moreover, each credit rating is specific to the security to which it
applies.

To monitor our credit rating and our capacity for long-term financing, we
consider various qualitative and quantitative factors. One such factor is the
ratio of our total debt to EBITDA. For the purpose of this calculation, debt is
defined as the sum of short-term borrowings, long-term debt due within one year,
long-term debt and standby letters of credit.

We have assessed the impact of events subsequent to our balance sheet date but
prior to the issuance of this filing. The impact from COVID-19, however,
continues to evolve, and the scope and nature of the impacts of COVID-19 remain
unclear. As such, our conclusions regarding both our short-term and long-term
liquidity position remain unchanged. Management will continue to evaluate the
Company's liquidity position and our near- and longer-term financial performance
as we manage the Company through the uncertainty related to COVID-19.

Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas'
Senior Notes
As discussed in   Note 7   entitled Debt and Derivatives of "  Notes to
Consolidated Financial Statements  ," Cintas Corporation No. 2 (Corp. 2) is the
indirectly, wholly owned principal operating subsidiary of Cintas. Corp. 2 is
the issuer of the $2,550.0 million aggregate principal amount of senior notes
outstanding as of May 31, 2020, which are unconditionally guaranteed, jointly
and severally, by Cintas Corporation and its wholly owned, direct and indirect
domestic subsidiaries.
Basis of Preparation of the Summarized Financial Information
The following tables include summarized financial information of Cintas
Corporation (Issuer), Corp. 2 and subsidiary guarantors (together, the Obligor
Group). Investments in and equity in the earnings of non-guarantors, which are
not members of the Obligor Group, have been excluded. Non-guarantor subsidiaries
are located outside the U.S., and therefore, excluded from the Obligor Group.

The summarized financial information of the Obligor Group is presented on a
combined basis with intercompany balances and transactions between entities in
the Obligor Group eliminated. The Obligor Group's amounts due from, amounts due
to and transactions with non-guarantors have been presented in separate line
items, if they are material. Summarized financial information of the Obligor
Group is as follows:
Summarized Consolidated Statement of Income for the Year Ended May 31,
2020
(In thousands)                                                              

Obligor Group



Net sales to unrelated parties                                                $     6,642,196
Net sales to non-guarantors                                                   $         4,778
Operating income                                                              $     1,140,318
Net income                                                                    $       860,022



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Summarized Consolidated Balance Sheet as of May 31, 2020 (In thousands)

                                                  Obligor 

Group

Assets


Receivables due from non-obligor subsidiaries                  $      3,199
Total other current assets                                     $  2,143,489
Total other noncurrent assets                                  $  4,938,093

Liabilities


Amounts due to non-obligor subsidiaries                        $      3,437
Current liabilities                                            $    843,203
Noncurrent liabilities                                         $  3,495,956



Contractual Obligations
                                                                          Payments Due by Period
                                                             One year             Two to             Four to            After five
(In thousands)                            Total              or less           three years          five years            years

Debt (1)                              $ 2,550,000          $       -          $ 1,250,000          $  50,000          $ 1,250,000
Operating leases (2)                      178,131             46,765               68,226             34,725               28,415
Interest payments                         606,183             95,530              151,210            108,630              250,813
Unconditional purchase obligations
(3)                                       117,571            117,571                    -                  -                    -

Total contractual cash obligations $ 3,451,885 $ 259,866

$ 1,469,436 $ 193,355 $ 1,529,228




(1)See   Note 7   entitled Debt and Derivatives of "  Notes to Consolidated
Financial Statements  " for a detailed presentation of Cintas' debt.
(2)See   Note 8   entitled Leases of "  Notes to Consolidated financial
Statements  " for a detailed presentation of Cintas' leases.
(3)Commitments entered into with key suppliers for minimum purchases quantities
related to inventory needs in response to COVID-19.
Cintas also makes payments to defined contribution plans and may make payments
to defined benefit plans to satisfy minimum funding requirements. The amount of
contributions made to the defined contribution plans are at the discretion of
the Board of Directors of Cintas. Future contributions to the defined
contribution plans are expected to be $70.2 million in the next year, $151.2
million in the next two to three years and $166.7 million in the next four to
five years. Future contributions to the defined benefit plans are expected to be
$4.8 million in the next year, $6.2 million in the next two to three years and
$6.2 million in the next four to five years.
Other Commitments
                                                                Amount of 

Commitment Expiration per Period


                                                             One year             Two to             Four to            After five
(In thousands)                            Total              or less           three years          five years            years

Lines of credit (1)                   $   999,877          $       -       

$ - $ 999,877 $ - Standby letters of credit and surety bonds (2)

                                 120,634            118,831                1,803                  -                  -
Total other commitments               $ 1,120,511          $ 118,831

$ 1,803 $ 999,877 $ -




(1)Back-up facility for the commercial paper program (reference   Note 7
entitled Debt and Derivatives of "  Notes to Consolidated Financial
Statements  " for further discussion).
(2)These standby letters of credit and surety bonds support certain outstanding
debt (reference   Note 7   entitled Debt and Derivatives of "  Notes to
Consolidated Financial Statements  "), self-insured workers' compensation and
general liability insurance programs.
Inflation and Changing Prices
Changes in wages, benefits and energy costs have the potential to materially
impact Cintas' consolidated results of operations. Management believes inflation
has not had a material impact on Cintas' consolidated financial condition or a
negative impact on the consolidated results of operations.
                                                                            

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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.

The Company and three executive officers were defendants in a purported class
action, filed on December 12, 2019, pending in the U.S. District Court for the
Southern District of Ohio alleging violations of federal securities laws. The
lawsuit asserted that the defendants made material misstatements regarding the
Company's margins, earnings guidance and regulatory compliance that caused the
Company's stock to trade at artificially inflated prices between March 2017 and
November 2019. The lawsuit was dismissed without prejudice on April 22, 2020.

The Company, the Board of Directors, CEO 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
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. The defendants deny
liability.
New Accounting Standards
In February 2016, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) 2016-02, "Leases (Topic 842)," as amended.
Cintas adopted this standard effective June 1, 2019, using a modified
retrospective transition approach. Topic 842 requires lessees to apply a dual
approach, classifying leases as either finance or operating leases based on the
principle of whether or not the lease is effectively a financed purchase by the
lessee. This classification will determine whether lease expense is recognized
based on an effective interest method or on a straight-line basis over the term
of the lease. A lessee is also required to record a right-of-use asset and a
lease liability for all leases with a term of greater than 12 months regardless
of their classification. Topic 842 provided a number of optional practical
expedients in transition, and we have determined to use certain of these
practical expedients upon our adoption of Topic 842. Specifically, the Company
elected the package of practical expedients permitted under Topic 842, which
allows a lessee to carryforward their population of existing leases, the
classification of each lease, as well as the treatment of initial direct lease
costs as of the period of adoption. The Company also elected the practical
expedient related to lease and non-lease components, as an accounting policy
election for the fleet and vehicle asset class, which allows a lessee to not
separate non-lease from lease components and instead account for consideration
paid in a contract as a single lease component. In addition, the Company elected
the short-term lease recognition exemption for all leases with a term of 12
months or less, which means it will not recognize right-of-use assets or lease
liabilities for these leases. The adoption of Topic 842, on June 1, 2019,
resulted in the Company recognizing right-of-use assets, net of $168.0 million
and corresponding lease liabilities of $173.4 million. The adoption of Topic 842
did not have a material impact on the Company's consolidated statements of
income or consolidated statements of cash flows.

In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting
Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income." This standard allows entities to elect
to reclassify the income tax effects of the Tax Cuts and Jobs Act (Tax Act) on
items within accumulated other comprehensive income to retained earnings.
Effective June 1, 2019, Cintas adopted ASU 2018-02, on a prospective basis,
which resulted in a $2.0 million reclassification adjustment of the stranded tax
effects from retained earnings to accumulated other comprehensive loss that was
determined using a specific identification method.

In April 2019, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses
(Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13
will replace the incurred loss impairment methodology with a methodology that
reflects expected credit losses and requires consideration of a broader range of
reasonable and supportable information to inform credit loss estimates. In
connection with recognizing credit losses on accounts receivable and other
financial instruments, Cintas will be required to use a forward-looking expected
loss model rather than the incurred loss model. ASU 2016-13 is effective for
annual periods beginning after December 15, 2019, with early adoption permitted.
The adoption of this standard will be through a cumulative-effect adjustment to
retained earnings as of the effective date. Cintas will adopt this standard on
June 1, 2020, and the adoption of this standard is not expected to have a
material impact on the consolidated financial statements.
                                                                            

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In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill
Impairment." ASU 2017-04 eliminates the two-step process that required
identification of potential impairment and a separate measure of the actual
impairment. Goodwill impairment charges, if any, would be determined by the
difference between a reporting unit's carrying value and its fair value
(impairment loss is limited to the carrying value). This standard was adopted by
Cintas in the current fiscal year and did not have a material impact on the
consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers
(Topic 606)," to clarify revenue recognition principles. This guidance is
intended to improve disclosure requirements and enhance the comparability of
revenue recognition practices. Improved disclosures under the amended guidance
relate to the nature, amount, timing and uncertainty of revenue that is
recognized from contracts with customers. We adopted ASU 2014-09, and all the
related amendments, effective June 1, 2018 using the modified retrospective
method. ASU 2014-09 requires a company to recognize revenue to depict the
transfer of goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those
goods or services. Upon adoption of ASU 2014-09, we recorded an adjustment to
the opening balance of retained earnings as of June 1, 2018. The adjustment to
retained earnings primarily relates to the capitalization of certain direct and
incremental contract costs required by the new guidance. Capitalized costs are
amortized ratably over the anticipated period of benefit. We applied ASU 2014-09
only to contracts that were not completed prior to fiscal 2019. The adoption of
ASU 2014-09 did not have a material impact on our consolidated statements of
comprehensive income and had no impact to the Company's operating cash flow.

In March 2020, the SEC amended Rule 3-10 of Regulation S-X regarding financial
disclosure requirements for registered debt offerings involving subsidiaries as
either issuers or guarantors and affiliates whose securities are pledged as
collateral. This new guidance narrows the circumstances that require separate
financial statements of subsidiary issuers and guarantors and streamlines the
alternative disclosure required in lieu of those statements. We adopted these
amendments for the year ended May 31, 2020. Accordingly, combined summarized
financial information has been presented only for the issuer and guarantors of
our senior notes for the most recent fiscal year and the year-to-date interim
period, and the location of the required disclosures has been removed from the
notes to the consolidated financial statements and moved to   Part II. Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations .

No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the consolidated financial statements.



Critical Accounting Policies and Estimates
The preparation of Cintas' consolidated financial statements in conformity with
U.S. GAAP requires management to make estimates and judgments that have a
significant effect on the amounts reported in the consolidated financial
statements and accompanying notes. These critical accounting policies should be
read in conjunction with   Note 1   entitled Significant Accounting Policies of
"  Notes to Consolidated Financial Statements  ." Significant changes, estimates
or assumptions related to any of the following critical accounting policies,
including those impacted by COVID-19, could possibly have a material impact on
the consolidated financial statements.

Revenue recognition
Rental revenue, which is recorded in the Uniform Rental and Facility Services
reportable operating segment, is recognized when services are performed. Other
revenue, which is recorded in the First Aid and Safety Services reportable
operating segments and All Other, is recognized when either services are
performed or the obligations under the terms of a contract with a customer are
satisfied. See   Note 2   entitled Revenue Recognition of the "  Notes to
Consolidated Financial Statements  " for more information on Cintas' revenue.

Uniforms and other rental items in service
Uniforms and other rental items in service 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 and related cost of uniforms and
ancillary products that are presented in the consolidated financial statements.
                                                                            

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Property and equipment
Depreciation is calculated using the straight-line method over the estimated
useful lives of the assets based on industry and Cintas specific experience,
which is typically 30 to 40 years for buildings, 5 to 20 years for building
improvements, 3 to 10 years for equipment and 2 to 15 years for leasehold
improvements. 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. As a
result of certain restructuring activities to eliminate excess capacity and
reduce our cost structure, an indicator of potential impairment was identified.
Cintas recognized an impairment loss of $9.2 million during the year ended May
31, 2020, based on the excess of the carrying amount of assets over their
respective fair values. The undiscounted cash flows were estimated, using Level
2 inputs based on both the cost and market approaches, at the lowest discernible
level of cash flows, which is at the location level. Cintas did not identify any
indicators of impairment for the fiscal years ended May 31, 2019 and 2018.

Goodwill

Goodwill, obtained through acquisitions of businesses, is valued at cost less
any impairment. Cintas completes an annual impairment test, that includes an
assessment of qualitative factors including, but not limited to, macroeconomic,
industry and market conditions, and entity specific factors such as strategies
and financial performance. In fiscal 2020, we identified the impact from
COVID-19 as a qualitative factor that necessitated a quantitative analysis. We
test for goodwill impairment at the reporting unit level. Cintas has identified
four reporting units for purposes of evaluating goodwill impairment: Uniform
Rental and Facility Services, First Aid and Safety Services and two reporting
units within All Other. To test for goodwill impairment, using a quantitative
analysis, we estimate the fair value of each of our reporting units using both a
discounted cash flow valuation technique and a market-based approach.

The impairment test is dependent upon a number of significant estimates and
assumptions, including macroeconomic conditions, growth rates, competitive
activities, cost containment, margin expansion and our business plans. We
believe these estimates and assumptions are reasonable. However, future changes
in the judgments, assumptions and estimates that are used in our impairment
testing for goodwill and identifiable intangible assets, including discount and
tax rates or future cash flow projections, could result in significantly
different estimates of the fair values. The most significant assumptions used in
the determination of the estimated fair value of the reporting units are the
revenue and EBITDA growth rates (including terminal growth rates) and the
discount rate. The terminal growth rate represents the rate at which the
reporting unit is expected to grow beyond the shorter-term business planning
period. The terminal growth rate utilized in our fair value estimate is
consistent with the reporting unit operating plans and approximates expected
long-term category market growth rates and inflation. The discount rate, which
is consistent with a weighted average cost of capital that is likely to be
expected by a market participant, is based upon industry required rates of
return, including consideration of both debt and equity components of the
capital structure. The discount rates may be impacted by adverse changes in the
macroeconomic environment, specifically the COVID-19 pandemic, volatility in the
equity and debt markets or other factors. Based on the results of the annual
impairment tests, Cintas was not required to recognize an impairment of goodwill
for the fiscal years ended May 31, 2020, 2019 or 2018. Cintas will continue to
perform impairment tests as of March 1 in future years and when indicators of
impairment exist.

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. The G&K service contract asset is being
amortized over a period of 15 years, which represents the estimated life of the
economic benefit and the asset amortization is based on the annual economic
value of the underlying asset, which generally decreases over the 15-year term.
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, 2020, 2019 or 2018.
                                                                            

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Insurance reserve
The insurance reserve represents the estimated ultimate cost of all asserted and
unasserted claims, primarily related to workers' compensation, auto liability
and other general liability exposure through the consolidated balance sheet
dates. Our reserves are estimated through actuarial procedures, with the
assistance of third-party actuarial specialists, of the insurance industry and
by using industry assumptions, adjusted for specific expectations based on our
claims history. 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. These changes in estimates may be material to the consolidated financial
statements.

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. Generally, 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. See   Note 12
entitled Stock-Based Compensation of "  Notes to Consolidated Financial
Statements  " for further information.

Litigation and other contingencies
Cintas is subject to legal proceedings and claims arising from the ordinary
course of its business, including personal injury, customer contract,
environmental and employment claims. U.S. GAAP requires that a liability for
contingencies be recorded when it is probable that a liability has occurred and
the amount of the liability can be reasonably estimated. Significant judgment is
required to determine the existence of a liability, as well as the amount to be
recorded. While a significant change in assumptions and judgments could have a
material impact on the amounts recorded for contingent liabilities, Cintas does
not believe that they will result in a material adverse effect on the
consolidated financial statements.

Income taxes
Deferred tax assets and liabilities are determined by the differences between
the consolidated financial statement carrying amounts and the tax basis of
assets and liabilities. Therefore, the Company has not recorded deferred taxes
for basis differences expected to reverse in future periods. Cintas accounts for
Global Intangible Low-Taxed Income (GILTI) as a current-period expense when
incurred. See   Note 9   entitled Income Taxes of "  Notes to Consolidated
Financial Statements  " for the types of items that give rise to significant
deferred income tax assets and liabilities. Deferred income taxes are classified
as assets or liabilities based on the classification of the related asset or
liability for financial reporting purposes. Cintas regularly reviews deferred
tax assets for recoverability based upon projected future taxable income and the
expected timing of the reversals of existing temporary differences. Although
realization is not assured, management believes it is more likely than not that
the recorded deferred tax assets, as adjusted for valuation allowances, will be
realized.

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 consolidated 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
consolidated 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.

Cintas is periodically reviewed by domestic and foreign tax authorities
regarding the amount of taxes due. These reviews include questions regarding the
timing and amount of deductions and the allocation of income among various tax
jurisdictions. In evaluating the exposure associated with various filing
positions, Cintas records reserves as deemed appropriate. Based on Cintas'
evaluation of current tax positions, Cintas believes its tax related accruals
are appropriate.

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