XML 37 R17.htm IDEA: XBRL DOCUMENT
v3.24.2

Income Taxes | 12 Months Ended
--- | ---
May 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income before income taxes consists of the following components for the fiscal years ended May 31:
(In thousands) | 2024 |  | 2023 |  | 2022
U.S. operations | $ | 1,860,859 |  |  | $ | 1,632,391 |  |  | $ | 1,445,719 |
Foreign operations | 112,776 |  |  | 60,757 |  |  | 53,049 |
| $ | 1,973,635 |  |  | $ | 1,693,148 |  |  | $ | 1,498,768 |
Income tax expense consists of the following components for the fiscal years ended May 31:
(In thousands) | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 327,616 |  |  | $ | 248,413 |  |  | $ | 162,269 |
State and local | 79,583 |  |  | 56,589 |  |  | 32,431 |
Foreign | 25,344 |  |  | 13,205 |  |  | 16,676 |
| 432,543 |  |  | 318,207 |  |  | 211,376 |
Deferred | (30,500) |  |  | 26,931 |  |  | 51,635 |
| $ | 402,043 |  |  | $ | 345,138 |  |  | $ | 263,011 |
Reconciliation of income tax expense using the statutory rate and actual income tax expense is as follows for the fiscal years ended May 31:
(In thousands) | 2024 |  | 2023 |  | 2022
Income taxes at the U.S. federal statutory rate | $ | 414,463 |  |  | $ | 355,561 |  |  | $ | 314,741 |
Permanent differences (1) | (67,310) |  |  | (59,502) |  |  | (85,413) |
State and local income taxes, net of federal benefit | 49,560 |  |  | 46,245 |  |  | 33,547 |
Other | 5,330 |  |  | 2,834 |  |  | 136 |
| $ | 402,043 |  |  | $ | 345,138 |  |  | $ | 263,011 |
(1) Primarily consists of the excess tax benefits related to stock-based compensation. The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31:
(In thousands) | 2024 |  | 2023
Deferred tax assets: |  |  |
Reserves related to accounts receivable | $ | 13,478 |  |  | $ | 12,562 |
Inventory reserves | 18,913 |  |  | 22,822 |
Insurance reserves | 45,154 |  |  | 45,153 |
Stock-based compensation | 71,146 |  |  | 63,186 |
Net operating loss and foreign related carry-forwards | 2,169 |  |  | — |
Operating lease liabilities | 48,964 |  |  | 46,258 |
Deferred compensation and other | 114,786 |  |  | 92,538 |
| 314,610 |  |  | 282,519 |
Valuation allowance | (2,129) |  |  | — |
| 312,481 |  |  | 282,519 |
Deferred tax liabilities: |  |  |
Uniform and other rental items in service | 251,394 |  |  | 248,883 |
Property and equipment | 175,214 |  |  | 171,971 |
Intangibles and other amortizable assets | 178,583 |  |  | 190,299 |
Treasury locks | 37,202 |  |  | 32,830 |
Capitalized contract costs | 91,551 |  |  | 88,056 |
Operating lease right-of-use assets | 48,964 |  |  | 46,258 |
State taxes and other | 5,085 |  |  | 2,578 |
| 787,993 |  |  | 780,875 |
Net deferred tax liability | $ | 475,512 |  |  | $ | 498,356 |
Although realization is not assured, management has evaluated its deferred tax assets to determine whether a valuation allowance is required or should be adjusted. This evaluation considers, among other items, the nature, frequency and amount of recent losses, reversal periods of taxable temporary differences, duration of statutory periods and tax planning strategies. As a result of this analysis, management believes it is more likely than not that the recorded deferred tax assets will be realized. Income taxes paid were $423.1 million, $291.9 million and $208.5 million for the fiscal years ended May 31, 2024, 2023 and 2022, respectively. As of May 31, 2024 and 2023, there was $32.7 million and $29.3 million, respectively, in total unrecognized tax benefits, which, if recognized, would favorably impact Cintas' effective tax rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of these items in prior reporting periods. The total amount accrued for interest and penalties as of May 31, 2024 and 2023, was $2.8 million and $3.2 million, respectively. Cintas records this tax liability in long-term accrued liabilities on the consolidated balance sheets. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:
(In thousands) |
Balance at June 1, 2022 | $ | 37,574 |
Additions for tax positions of the current year | 6,904 |
Additions for tax positions of prior years | 6,821 |
Settlements | (12,937) |
Statute expirations | (1,608) |
Balance at May 31, 2023 | 36,754 |
Additions for tax positions of the current year | 10,895 |
Additions for tax positions of prior years | 4,864 |
Settlements | (7,325) |
Statute expirations | (3,442) |
Balance at May 31, 2024 | $ | 41,746 |
The majority of Cintas' operations are in North America. Cintas is required to file U.S. federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax expense, either of which could have an impact on the consolidated results of operation in any given period. All U.S. federal income tax returns are closed to audit through fiscal 2020. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2018. Based on the status and resolution of the various audits and other potential regulatory developments, it is expected that the balance of unrecognized tax benefits will not materially change for the fiscal year ending May 31, 2025. Foreign Withholding Tax The Company asserts that all foreign earnings will be indefinitely reinvested, with the exception of certain foreign investments in which earnings and cash generation are in excess of local needs. With the passage of the Tax Cuts and Jobs Act in the U.S., dividends of earnings from non-U.S. operations are generally no longer subject to U.S. income tax. Cintas continues to analyze the estimated impact of the non-U.S. income and withholding tax liabilities based on the source of these earnings, as well as the expected means through which those earnings may be taxed; however, the unrecorded tax is not material to the consolidated financial statements.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration