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Debt and Derivatives | 12 Months Ended
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May 31, 2020
Debt Disclosure [Abstract] |
Debt and Derivatives | Debt and Derivatives Cintas' debt is summarized as follows at May 31:
(In thousands) | Interest Rate |  | Fiscal Year Issued |  | Fiscal Year 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 average interest rate for all Cintas debt at May 31, 2020 was 3.8% with maturity dates through fiscal year 2037. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, and term loan 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 general market prices. The carrying value and fair value of Cintas' debt as of May 31, 2020 were $2,550.0 million and $2,804.2 million, respectively, and as of May 31, 2019 were $2,866.2 million and $2,998.7 million, respectively. During the fiscal year ended May 31, 2020, Cintas paid a net total of $112.5 million of commercial paper. During the fiscal year ended May 31, 2019, Cintas issued $112.5 million, net of commercial paper. Letters of credit outstanding were $120.6 million at both May 31, 2020 and 2019. Maturities of debt during each of the next five years are $0.0 million, $900.0 million, $350.0 million, $0.0 million and $50.0 million, respectively. Interest paid was $105.5 million, $101.8 million and $122.1 million for the fiscal years ended May 31, 2020, 2019 and 2018, respectively. 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 revolving credit facility. There was $112.5 million of commercial paper outstanding with a weighted average interest rate of 2.7% with maturity dates less than 30 days and no borrowings on our revolving credit facility as of May 31, 2019. The fair value of the commercial paper, which approximates the carrying value, is estimated using Level 2 inputs based on general market prices. 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 lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income (loss) of $1.4 million, $1.2 million and $0.9 million in the fiscal years ended May 31, 2020, 2019 and 2018, respectively. During fiscal 2020, Cintas entered into interest rate lock agreements with a total notional value of $950.0 million for forecasted debt issuances in connection with upcoming debt maturities. As of May 31, 2020, the fair values of these interest rate locks were an asset of $1.5 million and a liability of $53.8 million, recorded in other assets, long-term accrued liabilities and in other comprehensive loss, net of tax. During fiscal 2019, Cintas entered into interest rate lock agreements with a notional value of $500.0 million for a forecasted debt issuance. As of May 31, 2020 and 2019, the fair values of these interest rate locks entered into during fiscal 2019 were a liability of $111.9 million and $36.4 million, respectively, that were recorded in long-term accrued liabilities and in other comprehensive loss, net of tax. These interest rate locks had no impact on net income or cash flows from continuing operations for fiscal 2020 or fiscal 2019. 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 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. As of May 31, 2020, the Company has unrecognized inventory purchase commitments with various suppliers totaling $117.6 million. In fiscal 2020, we made $32.7 million of inventory purchases related to the unrecognized commitments, and the Company expects to purchase all remaining commitments within the next twelve months. No such arrangements existed at the May 31, 2019 consolidated balance sheet date.

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- Definition Information about whether or not the entity is in compliance with debt covenants and the effects of noncompliance with debt covenants; and the entity's entire derivative instruments and hedging activities disclosure as a single block of text which describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References No definition available. + Details
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