Goodwill, Service Contracts and Other Assets

In fiscal 2014, Storage was classified as discontinued operations. As a result, goodwill and service contracts related to this business, which were previously included in the former Document Management Services operating segment, are included within Corporate. Storage was sold in three separate transactions during fiscal 2014. See Note 16 entitled Discontinued Operations for more information.

Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2015, by historical reportable operating segment, are as follows:



Goodwill (in thousands)	Rental Uniforms & Ancillary Products			Uniform Direct Sales			First Aid, Safety & Fire Protection		Corporate			Total

Balance as of June 1, 2014	$	943,516		$	23,905		$	221,911	$	78,079		$	1,267,411
Goodwill acquired	70			—			8,578		—			8,648
Goodwill divested in Storage Transactions	—			—			—		(75,660		)	(75,660		)
Foreign currency translation	(2,141		)	(227		)	—		(2,419		)	(4,787		)
Balance as of May 31, 2015	$	941,445		$	23,678		$	230,489	$	—		$	1,195,612



Service Contracts (in thousands)	Rental Uniforms & Ancillary Products			Uniform Direct Sales		First Aid, Safety & Fire Protection			Corporate			Total

Balance as of June 1, 2014	$	17,171		$	—	$	28,034		$	10,470		$	55,675
Service contracts acquired	313			—		9,543			265			10,121
Service contracts divested in Storage Transactions	—			—		—			(9,570		)	(9,570		)
Service contracts amortization	(5,619		)	—		(7,005		)	(597		)	(13,221		)
Foreign currency translation	(3		)	—		—			(568		)	(571		)
Balance as of May 31, 2015	$	11,862		$	—	$	30,572		$	—		$	42,434

Effective June 1, 2015, Cintas realigned its organizational structure and updated its reportable operating segments in light of certain changes in its business, including the acquisition of ZEE. Cintas’ updated reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The remainder of Cintas’ business, which consists primarily of Fire Protection Services and its Direct Sale business, are included in All Other. For additional information regarding Cintas’ realignment and reportable operating segment determination, see Note 14 entitled Operating Segment Information.

As a result of Cintas’ operating segment realignment, the composition of Cintas’ reporting units for the evaluation of goodwill impairment also changed. Historically, Cintas’ reporting units were the same as the reportable operating segments, Rental Uniforms and Ancillary Products, Uniform Direct Sales and First Aid, Safety and Fire Protection Services. Effective June 1, 2015, Cintas identified five reporting units for purposes of evaluating goodwill impairment, which were Uniform Rental and Facility Services, First Aid and Safety Services, and three reporting units within All Other.

As the composition of the reporting units changed, the Company allocated historical goodwill to the new reporting units based on a relative fair value allocation approach. Fair value of each reporting unit was determined using a combination of the market approach and the income approach. Under the market approach, fair value is based on revenue and earnings multiples for guideline public companies in the reporting unit's peer group. Under the income approach, value is dependent on the present value of net cash flows to be derived from the ownership. The relative fair value allocation approach yielded the following allocation of total goodwill as of June 1, 2015: Uniform Rental and Facility Services reportable operating segment goodwill of $943.9 million, First Aid and Safety Services reportable operating segment goodwill of $155.0 million and All Other goodwill of $96.7 million.

The following table illustrates the changes in Goodwill as a result of the segment realignment:



Goodwill Allocation as of June 1, 2015 (in thousands)	Total

Uniform Rental and Facility Services
Rental Uniforms and Ancillary Products segment goodwill reassigned	$	929.4
Uniform Direct Sales segment goodwill reassigned	14.5
	$	943.9

First Aid and Safety Services
First Aid, Safety and Fire Protection segment goodwill reassigned	$	155.0

All Other
First Aid, Safety and Fire Protection segment goodwill reassigned	$	75.5
Rental Uniforms and Ancillary Products segment goodwill reassigned	12.0
Uniform Direct Sales segment goodwill reassigned	9.2
	$	96.7

As a result of the change in reporting units, Cintas was required to perform an interim impairment test on goodwill at June 1, 2015. There was no impairment recorded as a result of the interim impairment test.

Changes in the carrying amount of goodwill and service contracts for the fiscal year ended May 31, 2016, by reportable operating segment and All Other, are as follows:



Goodwill (in thousands)	Uniform Rental and Facility Services			First Aid and Safety Services			All Other			Total

Balance at June 1, 2015	$	943,909		$	154,954		$	96,749		1,195,612
Goodwill acquired	10,020			86,874			203			97,097
Foreign currency translation	(713		)	(380		)	(23		)	(1,116		)
Balance as of May 31, 2016	$	953,216		$	241,448		$	96,929		$	1,291,593



Service Contracts (in thousands)	Uniform Rental and Facility Services			First Aid and Safety Services			All Other			Total

Balance at June 1, 2015	$	6,677		$	1,576		$	34,181		$	42,434
Service contracts acquired	18,912			34,052			2,730			55,694
Service contracts amortization	(4,398		)	(3,355		)	(6,639		)	(14,392		)
Foreign currency translation	—			(21		)	—			(21		)
Balance as of May 31, 2016	$	21,191		$	32,252		$	30,272		$	83,715

Information regarding Cintas' service contracts and other assets is as follows:



	As of May 31, 2016
(In thousands)	Carrying Amount		Accumulated Amortization		Net

Service contracts	$	395,482	$	311,767	$	83,715

Noncompete and consulting agreements	$	42,378	$	40,928	$	1,450
Other	27,943		9,532		18,411
Total	$	70,321	$	50,460	$	19,861



	As of May 31, 2015
(In thousands)	Carrying Amount		Accumulated Amortization		Net

Service contracts	$	340,816	$	298,382	$	42,434

Noncompete and consulting agreements	$	41,828	$	40,379	$	1,449
Other	23,595		7,550		16,045
Total	$	65,423	$	47,929	$	17,494

Amortization expense for continuing operations was $15.6 million, $13.7 million and $15.2 million for the fiscal years ended May 31, 2016, 2015 and 2014, respectively. Estimated amortization expense for continuing operations, excluding any future acquisitions, for each of the next five years is $13.8 million, $12.3 million, $11.7 million, $11.3 million and $9.4 million, respectively.