Discontinued Operations

6 Months Ended

Nov. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Effective August 31, 2014, Cintas' document imaging and document retention services business was classified as discontinued operations. The business was previously included in the Document Management Services operating segment. In accordance with the applicable accounting guidance for the disposal of long-lived assets, the results of the document imaging and document retention services business have been excluded from both continuing operations and segment results for all periods presented.

In the quarter ended November 30, 2014, Cintas sold the document imaging and document retention services business. The business, excluding related real estate owned by Cintas, was sold in three separate transactions to three separate buyers. Cash proceeds received at the closing of each transaction total $154.0 million, net of cash contributed. Each transaction involves contingent consideration that the Company has an opportunity to receive if specified future events occur. Because of the uncertainty surrounding the future events, gain contingencies have not been recorded. Certain real estate owned by Cintas is being leased by the buyers. These lease payments do not represent a material direct cash flow of the disposed document imaging and document retention services business and therefore does not impact the classification of the business as a discontinued operation.

Following is selected financial information included in net income from discontinued operations for the document imaging and document retention services business:

	Three Months Ended					Six Months Ended
(In thousands)	November 30, 2014			November 30, 2013(1)		November 30, 2014			November 30, 2013(1)
Revenue	$	10,594		$	19,822	$	31,379		$	39,919
(Loss) income before income taxes	(5,279		)	760		(4,703		)	1,218
Income tax (benefit) expense	(2,053		)	354		(1,794		)	456
Gain on sale of business	34,137			—		34,137			—
Income tax expense on gain	13,945			—		13,945			—
Net income from discontinued operations	$	16,966		$	406	$	17,283		$	762

⁽¹⁾ Results for the three and six months ended November 30, 2013 were previously included in continuing operations.

Certain real estate assets and related liabilities were not included in the sale transactions, but opportunities for these assets are being evaluated; as such, these are classified as held for sale as of November 30, 2014. As allowed under applicable accounting guidance, the May 31, 2014 balance sheet amounts for these assets and liabilities remain in their natural classifications.