10-Q 1 ctas-20221130.htm 10-Q ctas-20221130
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedNovember 30, 2022
 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                         to                                        
 Commission file number 0-11399
ctas-20221130_g1.jpg
Cintas Corporation
(Exact name of registrant as specified in its charter)
Washington31-1188630
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification Number)
6800 Cintas Boulevard
P.O. Box 625737
Cincinnati,Ohio45262-5737
(Address of Principal Executive Offices)(Zip Code)
 
Registrant's Telephone Number, Including Area Code: (513) 459-1200
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, no par valueCTASThe NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by checkmark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No
Indicate by checkmark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No
Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer                 Accelerated Filer                                               Non-Accelerated Filer  
Smaller Reporting Company           Emerging Growth Company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding December 31, 2022
Common Stock, no par value 101,620,479



CINTAS CORPORATION
TABLE OF CONTENTS

Page
November 30, 2022 and May 31, 2022
 



Part I. Financial Information
ITEM 1.                             
FINANCIAL STATEMENTS
CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)


 Three Months EndedSix Months Ended
(In thousands except per share data)November 30, 2022November 30, 2021November 30, 2022November 30, 2021
Revenue:  
Uniform rental and facility services$1,709,987 $1,535,271 $3,407,759 $3,043,447 
Other464,871 387,010 933,553 775,784 
Total revenue2,174,858 1,922,281 4,341,312 3,819,231 
Costs and expenses:  
Cost of uniform rental and facility services
906,727 817,261 1,797,493 1,596,562 
Cost of other245,684 219,879 493,260 434,772 
Selling and administrative expenses577,513 503,913 1,165,505 1,012,568 
Operating income444,934 381,228 885,054 775,329 
Interest income(344)(56)(499)(112)
Interest expense28,920 21,902 56,640 43,756 
Income before income taxes416,358 359,382 828,913 731,685 
Income taxes92,065 64,713 152,931 105,837 
Net income$324,293 $294,669 $675,982 $625,848 
Basic earnings per share$3.18 $2.83 $6.63 $6.02 
Diluted earnings per share$3.12 $2.76 $6.51 $5.87 
Dividends declared per share$1.15 $0.95 $2.30 $1.90 
 

See accompanying notes.
3

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)


Three Months EndedSix Months Ended
(In thousands)November 30,
2022
November 30,
2021
November 30,
2022
November 30,
2021
Net income$324,293 $294,669 $675,982 $625,848 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments
(9,901)(7,472)(29,107)(31,488)
Change in fair value of interest rate lock
   agreements, net of tax expense (benefit)
   of $2,531, $3,744, $2,851 and $(8,810),
   respectively
7,394 10,940 8,328 (25,739)
Amortization of interest rate lock agreements, net of tax expense of $513, $148, $1,025 and $296, respectively
(1,521)(460)(3,042)(919)
Other comprehensive (loss) income, net of tax
   expense (benefit) of $3,044, $3,892, $3,876
   and $(8,514), respectively
(4,028)3,008 (23,821)(58,146)
Comprehensive income$320,265 $297,677 $652,161 $567,702 


See accompanying notes.






4

CINTAS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS


(In thousands except per share data)November 30,
2022
May 31,
2022
 (Unaudited) 
ASSETS  
Current assets:  
Cash and cash equivalents$89,799 $90,471 
Accounts receivable, net1,135,833 1,006,220 
Inventories, net514,839 472,150 
Uniforms and other rental items in service986,505 916,706 
Income taxes, current13,657 21,708 
Prepaid expenses and other current assets152,537 124,728 
Total current assets2,893,170 2,631,983 
Property and equipment, net1,340,658 1,323,673 
Investments243,574 242,873 
Goodwill3,037,506 3,042,976 
Service contracts, net367,612 391,638 
Operating lease right-of-use assets, net176,276 170,003 
Other assets, net368,211 344,110 
 $8,427,007 $8,147,256 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$310,986 $251,504 
Accrued compensation and related liabilities208,342 236,992 
Accrued liabilities556,211 588,948 
Operating lease liabilities, current42,792 43,872 
Debt due within one year435,406 311,574 
Total current liabilities1,553,737 1,432,890 
Long-term liabilities:  
Debt due after one year2,485,277 2,483,932 
Deferred income taxes493,379 473,777 
Operating lease liabilities136,520 129,064 
Accrued liabilities327,556 319,397 
Total long-term liabilities3,442,732 3,406,170 
Shareholders’ equity:  
Preferred stock, no par value:  
100,000 shares authorized, none outstanding
Common stock, no par value, and paid-in capital:1,933,145 1,771,917 
425,000,000 shares authorized
  
FY 2023: 191,857,155 shares issued and 101,601,032 shares outstanding
  
FY 2022: 190,837,921 shares issued and 101,711,215 shares outstanding
Retained earnings9,160,346 8,719,163 
Treasury stock:(7,747,049)(7,290,801)
FY 2023: 90,256,123 shares
  
FY 2022: 89,126,706 shares
Accumulated other comprehensive income84,096 107,917 
Total shareholders’ equity3,430,538 3,308,196 
 $8,427,007 $8,147,256 

See accompanying notes.
5

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

Common Stock
and Paid-In Capital 
Retained
Earnings
Accumulated
Other
Comprehensive
Income
Treasury Stock  Total
Shareholders'
Equity
(In thousands)SharesAmountSharesAmount
Balance at June 1, 2022190,838 $1,771,917 $8,719,163 $107,917 (89,127)$(7,290,801)$3,308,196 
Net income— — 351,689 — — — 351,689 
Comprehensive loss, net of tax— — — (19,793)— — (19,793)
Dividends— — (117,461)— — — (117,461)
Stock-based compensation— 26,282 — — — — 26,282 
Vesting of stock-based compensation awards273 — — — — — — 
Stock options exercised543 80,638 — — (193)(79,591)1,047 
Repurchase of common stock— — — — (802)(320,334)(320,334)
Balance at August 31, 2022191,654 $1,878,837 $8,953,391 $88,124 (90,122)$(7,690,726)$3,229,626 
Net income— — 324,293 — — — 324,293 
Comprehensive loss, net of tax— — — (4,028)— — (4,028)
Dividends— — (117,338)— — — (117,338)
Stock-based compensation— 25,255 — — — — 25,255 
Vesting of stock-based compensation awards9 — — — — — — 
Stock options exercised194 29,053 — — (66)(27,975)1,078 
Repurchase of common stock— — — — (68)(28,348)(28,348)
Balance at November 30, 2022191,857 $1,933,145 $9,160,346 $84,096 (90,256)$(7,747,049)$3,430,538 

6

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)


Common Stock
and Paid-In Capital  
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock  Total
Shareholders'
Equity
(In thousands)SharesAmountSharesAmount
Balance at June 1, 2021189,071 $1,516,202 $7,877,015 $30,888 (85,010)$(5,736,258)$3,687,847 
Net income— — 331,179 — — — 331,179 
Comprehensive loss, net of tax— — — (61,154)— — (61,154)
Dividends— — (98,826)— — — (98,826)
Stock-based compensation— 36,496 — — — — 36,496 
Vesting of stock-based compensation awards493 — — — — — — 
Stock options exercised564 72,896 — — — — 72,896 
Repurchase of common stock— — — — (1,788)(659,235)(659,235)
Balance at August 31, 2021190,128 $1,625,594 $8,109,368 $(30,266)(86,798)$(6,395,493)$3,309,203 
Net income— — 294,669 — — — 294,669 
Comprehensive income, net of tax— — — 3,008 — — 3,008 
Dividends— — (98,961)— — — (98,961)
Stock-based compensation— 24,397 — — — — 24,397 
Vesting of stock-based compensation awards31 — — — — — — 
Stock options exercised317 36,302 — — — — 36,302 
Repurchase of common stock— — — — (13)(5,491)(5,491)
Balance at November 30, 2021190,476 $1,686,293 $8,305,076 $(27,258)(86,811)$(6,400,984)$3,563,127 

See accompanying notes.
7

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

 Six Months Ended
(In thousands)November 30, 2022November 30, 2021
Cash flows from operating activities:  
Net income$675,982 $625,848 
Adjustments to reconcile net income to net cash provided by operating activities:
  
Depreciation126,561 122,274 
Amortization of intangible assets and capitalized contract costs74,693 74,365 
Stock-based compensation51,537 60,893 
Gain on sale of operating assets (12,129)
Deferred income taxes18,565 29,941 
Change in current assets and liabilities, net of acquisitions of businesses:  
Accounts receivable, net(133,897)(77,343)
Inventories, net(43,266)13,406 
Uniforms and other rental items in service(73,475)(69,513)
Prepaid expenses and other current assets and capitalized contract costs(85,532)(47,978)
Accounts payable61,421 11,400 
Accrued compensation and related liabilities(28,212)(59,988)
Accrued liabilities and other(33,352)(10,519)
Income taxes, current8,124 (66,875)
Net cash provided by operating activities619,149 593,782 
Cash flows from investing activities:  
Capital expenditures(146,404)(108,629)
Purchases of investments(5,182)(5,967)
Proceeds from sale of operating assets, net of cash disposed 15,347 
Acquisitions of businesses, net of cash acquired(15,457)(45,670)
Other, net(4,381)(6,676)
Net cash used in investing activities(171,424)(151,595)
Cash flows from financing activities:  
Issuance of commercial paper, net124,046 167,000 
Repayment of debt (250,000)
Proceeds from exercise of stock-based compensation awards2,125 109,198 
Dividends paid(215,017)(177,949)
Repurchase of common stock(348,682)(664,726)
Other, net(8,840)(3,399)
Net cash used in financing activities(446,368)(819,876)
Effect of exchange rate changes on cash and cash equivalents(2,029)(2,781)
Net decrease in cash and cash equivalents(672)(380,470)
Cash and cash equivalents at beginning of period90,471 493,640 
Cash and cash equivalents at end of period$89,799 $113,170 

See accompanying notes.
8

CINTAS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited) 

Note 1 - Basis of Presentation
The consolidated condensed financial statements of Cintas Corporation (Cintas, the Company, we, us or our) included herein have been prepared by Cintas, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, we suggest that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2022 filed with the SEC on July 27, 2022. A summary of our significant accounting policies is presented beginning on page 41 of that report. There have been no material changes in the accounting policies followed by Cintas during the current fiscal year. 

Interim results are subject to variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, adjustments (which include only normal recurring adjustments) necessary for a fair statement of the consolidated results of the interim periods shown have been made.

Inventories, net are valued at the lower of cost (first-in, first-out) or net realizable value. Inventory is comprised of the following: 
(In thousands)November 30,
2022
May 31,
2022
Raw materials$18,431 $19,071 
Work in process48,245 34,280 
Finished goods448,163 418,799 
 $514,839 $472,150 
Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $70.2 million and $100.3 million at November 30, 2022 and May 31, 2022, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up.
New Accounting Pronouncements
There are no new accounting pronouncements recently issued or newly effective that had, or are expected to have, a material impact on Cintas' consolidated condensed financial statements.
9

Note 2 - Revenue Recognition
The following table presents Cintas' total revenue disaggregated by operating segment:
Three Months EndedSix Months Ended
(In thousands)November 30,
2022
November 30,
2021
November 30,
2022
November 30,
2021
Uniform Rental and
   Facility Services
$1,709,987 78.6 %$1,535,271 79.9 %$3,407,759 78.5 %$3,043,447 79.7 %
First Aid and Safety
   Services
235,974 10.9 %202,160 10.5 %470,135 10.8 %401,276 10.5 %
Fire Protection
   Services
146,602 6.7 %123,254 6.4 %298,449 6.9 %251,472 6.6 %
Uniform Direct
   Sales
82,295 3.8 %61,596 3.2 %164,969 3.8 %123,036 3.2 %
Total revenue$2,174,858 100.0 %$1,922,281 100.0 %$4,341,312 100.0 %$3,819,231 100.0 %

The Fire Protection Services and Uniform Direct Sales operating segments are included within All Other as disclosed in Note 12 entitled Segment Information.

Revenue Recognition Policy
Approximately 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services operating segment customers, performed by a Cintas employee-partner, at the customer's location of business. Revenue from our route servicing customer contracts represent a single-performance obligation. The Company recognizes revenue over time as services are performed, based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business. The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer.

Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three or six months ended November 30, 2022 or 2021. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated condensed balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue. These assets are included in prepaid expenses and other current assets and in other assets, net on the consolidated condensed balance sheets.

We are exposed to credit losses primarily through our trade receivables. We determine the allowance for credit losses using both an estimate, based on historical rates of collections, and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing
10

substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform Rental and Facility Services reportable operating segment, the First Aid and Safety Services reportable operating segment and All Other because of differences in customers served and the nature of each business. We update our estimate of credit loss reserves quarterly, considering recent write-offs and collections information and underlying economic expectations.

Costs to Obtain a Contract
The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. As permitted by Accounting Standards Codification 606, "Revenue from Contracts with Customers (Topic 606)", the Company has elected to apply the guidance to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the consolidated condensed financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio. The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of the standard or the amortization period of the asset would have been one year or less. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. We review the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when we expect to recognize the expense. The current portion is included in prepaid expenses and other current assets and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets. As of November 30, 2022, the current and noncurrent assets related to deferred commissions totaled $88.2 million and $244.1 million, respectively. As of May 31, 2022, the current and noncurrent assets related to deferred commissions totaled $83.7 million and $232.2 million, respectively. We recorded amortization expense related to deferred commissions of $23.4 million and $21.7 million during the three months ended November 30, 2022 and 2021, respectively. During the six months ended November 30, 2022 and 2021, we recorded amortization expense related to deferred commissions of $45.8 million and $43.1 million, respectively. These expenses are classified in selling and administrative expenses on the consolidated condensed statements of income.
Note 3 - Leases
Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated condensed balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated condensed balance sheet.

Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of uniform rental and facility services and other on the Company's consolidated condensed statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $20.0 million and $18.0 million for the three months ended November 30, 2022 and 2021, respectively. For the six months ended November 30, 2022 and 2021, operating lease costs, including short-term lease expense and variable lease costs which were immaterial in both periods, were $39.5 million and $36.2 million, respectively.

11

The following table provides supplemental information related to the Company's consolidated condensed statements of cash flows for the six months ended November 30:
(In thousands)20222021
Cash paid for amounts included in the measurement of operating lease liabilities$25,108 $24,301 
Operating lease right-of-use assets obtained in exchange for new and renewed
   operating lease liabilities
$29,186 $10,609 

Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows:
November 30,
2022
May 31,
2022
Weighted-average remaining lease term - operating leases5.37 years5.40 years
Weighted-average discount rate - operating leases2.50%2.20%
The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of November 30, 2022:
(In thousands)
2023 (remaining six months)
$23,932 
202443,081 
202535,080 
202628,347 
202720,682 
Thereafter40,859 
Total payments191,981 
Less interest(12,669)
Total present value of lease payments$179,312 

12

Note 4 - Fair Value Measurements
All financial instruments that are measured at fair value on a recurring basis (at least annually) have been classified within the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated condensed balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below: 
As of November 30, 2022
(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalents$89,799 $ $ $89,799 
Other assets, net:
  Interest rate lock agreements 68,057  68,057 
Total assets at fair value$89,799 $68,057 $ $157,856 
As of May 31, 2022
(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalents$90,471 $ $ $90,471 
Other assets, net:
Interest rate lock agreements 56,877  56,877 
Total assets at fair value$90,471 $56,877 $ $147,348 

Cintas’ cash and cash equivalents are generally classified within Level 1 or Level 2 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets, and financial instruments classified as Level 2 are based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments.

The fair values of Cintas' interest rate lock agreements are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy. The fair value was determined by comparing the locked rates against the benchmarked treasury rate. No other amounts included in other assets, net, are recorded at fair value on a recurring basis.

The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated condensed balance sheet dates.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, Cintas records assets and liabilities at fair value on a nonrecurring basis as required under U.S. GAAP. The assets and liabilities measured at fair value on a nonrecurring basis primarily relate to assets and liabilities acquired in a business acquisition. The Company's acquisition of the remaining interest of an equity method investment during fiscal 2022 was recorded at fair value. See Note 10 entitled Acquisitions for additional information.

13

Note 5 - Investments
Cintas' investments are summarized as follows:
(In thousands)November 30,
2022
May 31,
2022
Cash surrender value of insurance policies$238,637 $237,136 
Other investments4,937 5,737 
Total investments$243,574 $242,873 

Investments are generally evaluated for impairment on an annual basis or when indicators of impairment exist. For the three and six months ended November 30, 2022 and 2021, no impairment losses were recorded.

Note 6 - Earnings Per Share 
Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. The following tables set forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas’ common shares:
Three Months EndedSix Months Ended
Basic Earnings per Share
(In thousands except per share data)
November 30, 2022November 30, 2021November 30, 2022November 30, 2021
Net income$324,293 $294,669 $675,982 $625,848 
Less: net income allocated to participating securities1,372 1,495 2,859 3,179 
Net income available to common
   shareholders
$322,921 $293,174 $673,123 $622,669 
Basic weighted average common shares outstanding
101,637 103,646 101,530 103,463 
Basic earnings per share$3.18 $2.83 $6.63 $6.02 
Three Months EndedSix Months Ended
Diluted Earnings per Share
(In thousands except per share data)
November 30, 2022November 30, 2021November 30, 2022November 30, 2021
Net income$324,293 $294,669 $675,982 $625,848 
Less: net income allocated to participating securities1,372 1,495 2,859 3,179 
Net income available to common
   shareholders
$322,921 $293,174 $673,123 $622,669 
Basic weighted average common shares outstanding
101,637 103,646 101,530 103,463 
Effect of dilutive securities – employee stock options
1,719 2,476 1,813 2,563 
Diluted weighted average common shares outstanding
103,356 106,122 103,343 106,026 
Diluted earnings per share$3.12 $2.76 $6.51 $5.87 

For the three months ended November 30, 2022 and 2021, options granted to purchase 1.1 million and 0.1 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. For the six months ended November 30, 2022 and 2021, options granted to purchase 0.9 million and 0.1 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. The exercise prices of these options were greater than the average market price of the common stock (anti-dilutive).
14

On October 29, 2019, we announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the first quarter of fiscal 2022. On July 27, 2021, Cintas announced that the Board of Directors authorized a $1.5 billion share buyback program, which does not have an expiration date. From the inception of the July 27, 2021 share buyback program through November 30, 2022, Cintas purchased a total of 2.7 million shares of Cintas common stock at an average price of $385.62 per share for a total purchase price of $1.0 billion. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. The following tables summarize the share buyback activity by program and period:

Three Months EndedSix Months Ended
November 30, 2022November 30, 2022
Buyback Activity
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
July 27, 202112 $377.66 $4,683 544 $395.97 $215,434 
July 26, 2022      
12 $377.66 $4,683 544 $395.97 $215,434 
Shares acquired for taxes due (1)
56 $423.64 $23,665 326 $408.97 $133,248 
Total repurchase of Cintas common stock$28,348 $348,682 

Three Months EndedSix Months Ended
November 30, 2021November 30, 2021
Buyback Activity
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
October 29, 2019 $ $ 1,590 $365.41 $581,220 
July 27, 2021      
 $ $ 1,590 $365.41 $581,220 
Shares acquired for taxes due (1)
13 $420.87 $5,483 211 $395.84