Discontinued Operations

9 Months Ended

Feb. 28, 2018

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 nine months ended February 28, 2017, 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 February 28, 2018, 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						Nine Months Ended
(In thousands)	February 28, 2018			February 28, 2017 ⁽¹⁾			February 28, 2018			February 28, 2017 ⁽¹⁾

Revenue	$	—		$	25,768		$	10,773		$	79,094

Income (loss) before income taxes	149			3,160			(2,333		)	8,586
Income tax (expense) benefit	(242		)	(2,109		)	678			(4,148		)
Gain on sale of business	—			—			99,060			—
Gain on Shred-it	—			—			—			25,876
Income tax benefit (expense) on net gain	6,399			—			(35,624		)	(8,953		)
Net income from discontinued operations	$	6,306		$	1,051		$	61,781		$	21,361

⁽¹⁾The results of Discontinued Services for the three and nine months ended February 28, 2017 were previously included in continuing operations.