Discontinued Operations

6 Months Ended

Nov. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

In fiscal 2018, Cintas sold a significant business referred to as Discontinued Services and received proceeds from the sale of $127.8 million. The results of Discontinued Services are included in discontinued operations for all periods presented. In accordance with the applicable accounting guidance for the disposal of long-lived assets and discontinued operations, the results of Discontinued Services have been excluded from both continuing operations and operating segment results for all periods presented.

During the three months ended November 30, 2016, we received additional proceeds related to contingent consideration on the sale of Shred-it. Cintas realized a pre-tax gain of $25.9 million as a result of the additional consideration received. As of November 30, 2017, Cintas still has the opportunity to receive additional consideration, subject to certain holdback provisions. Because of the uncertainty surrounding the holdback provision, this opportunity represents a gain contingency that has not been recorded.

Following is selected financial information included in net income from discontinued operations for Discontinued Services and Shred-it:



	Three Months Ended						Six Months Ended
(In thousands)	November 30, 2017			November 30, 2016 ⁽¹⁾			November 30, 2017			November 30, 2016 ⁽¹⁾

Revenue	$	—		$	25,845		$	10,773		$	53,326

(Loss) income before income taxes	(43		)	2,402			(2,482		)	5,426
Income tax benefit (expense)	18			(898		)	920			(2,039		)
(Loss) gain on sale of business	(1,209		)	—			99,060			—
Gain on Shred-it	—			25,876			—			25,876
Income tax benefit (expense) on net gain	606			(8,953		)	(42,023		)	(8,953		)
Net (loss) income from discontinued operations	$	(628	)	$	18,427		$	55,475		$	20,310

⁽¹⁾The results of Discontinued Services for the three and six months ended November 30, 2016 were previously included in continuing operations.