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Debt, Derivatives and Hedging Activities | 9 Months Ended
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Feb. 28, 2023
Debt Disclosure [Abstract] |
Debt, Derivatives and Hedging Activities | Debt, Derivatives and Hedging Activities Cintas' outstanding debt is summarized as follows:
(In thousands) | Interest Rate |  | Fiscal Year Issued |  | Fiscal Year Maturity |  | February 28, 2023 |  | May 31, 2022
Debt due within one year |  |  |  |  |  |  |  |  |
Commercial paper | 4.79 | % | (1) | 2023 |  | 2023 |  | $ | 199,000 |  |  | $ | 261,200 |
Senior notes (2) | 2.78 | % |  | 2013 |  | 2023 |  | 50,054 |  |  | 50,380 |
Debt issuance costs |  |  |  |  |  |  | (1) |  |  | (6) |
Total debt due within one year |  |  |  |  |  |  | $ | 249,053 |  |  | $ | 311,574 |
Debt due after one year |  |  |  |  |  |  |  |  |
Senior notes (3) | 3.11 | % |  | 2015 |  | 2025 |  | $ | 50,714 |  |  | $ | 50,965 |
Senior notes | 3.45 | % |  | 2022 |  | 2025 |  | 400,000 |  |  | 400,000 |
Senior notes | 3.70 | % |  | 2017 |  | 2027 |  | 1,000,000 |  |  | 1,000,000 |
Senior notes | 4.00 | % |  | 2022 |  | 2032 |  | 800,000 |  |  | 800,000 |
Senior notes | 6.15 | % |  | 2007 |  | 2037 |  | 250,000 |  |  | 250,000 |
Debt issuance costs |  |  |  |  |  |  | (14,762) |  |  | (17,033) |
Total debt due after one year |  |  |  |  |  |  | $ | 2,485,952 |  |  | $ | 2,483,932 |
(1) Variable rate debt instrument. The rate presented is the variable borrowing rate at February 28, 2023. (2) Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (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%. Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, 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 February 28, 2023 were $2,749.0 million and $2,641.2 million, respectively, and as of May 31, 2022 were $2,811.2 million and $2,862.2 million, respectively. During the nine months ended February 28, 2023, Cintas paid $62.2 million, net of commercial paper. During the nine months ended February 28, 2022, Cintas issued $559.2 million, net of commercial paper. The credit agreement that supports our commercial paper program has a revolving credit facility with a capacity of $2.0 billion. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is March 23, 2027. As of February 28, 2023, there was $199.0 million of commercial paper outstanding with a weighted average interest rate of 4.79% and maturity dates less than 90 days and no borrowings on our revolving credit facility. As of May 31, 2022, there was $261.2 million of commercial paper outstanding with a weighted average interest rate of 1.20% and maturity dates less than 90 days and no borrowings on our revolving credit facility. The fair value of the commercial paper, which approximates carrying value, is estimated using level 2 inputs based on general market prices and interest rates. 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 locks, which represent cash flow hedges, to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2013, fiscal 2017 and fiscal 2022. The amortization of the interest rate locks resulted in a decrease to comprehensive income of $1.5 million and $0.5 million for the three months ended February 28, 2023 and 2022, respectively. For the nine months ended February 28, 2023 and 2022, the amortization of the interest rate locks resulted in a decrease to comprehensive income of $4.6 million and $1.4 million, respectively. During fiscal 2022 and fiscal 2020, Cintas entered into interest rate lock agreements for forecasted debt issuances. The aggregate notional value of outstanding cash flow hedges was $500.0 million at both February 28, 2023 and May 31, 2022. The fair values of the outstanding interest rate locks, for forecasted debt issuances, are summarized as follows:
|  |  |  | February 28, 2023 |  | May 31, 2022
Fiscal Year of Issuance (in thousands) |  |  |  |  | Other assets, net |  |  |  |  |  |  | Other assets, net |  |
2022 |  |  |  |  | $ | 25,654 |  |  |  |  |  |  |  | $ | 18,331 |  |  |
2020 |  |  |  |  | $ | 44,417 |  |  |  |  |  |  |  | $ | 38,546 |  |  |
The change in fair value of the interest rate locks are recorded in other comprehensive (loss) income, net of tax. These interest rate locks had no impact on net income or cash flows for the three and nine months ended February 28, 2023 or 2022. 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.

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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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