Table of Contents

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

X

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the Fiscal Year Ended May 31, 2010TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934Commission File No. 0-11399


CINTAS CORPORATION
(Exact name of Registrant as specified in its charter)

Incorporated under
the Laws of Washington



IRS Employer ID
No. 31-1188630(State or other jurisdiction
of incorporation or organization)

6800 Cintas Boulevard
P.O. Box 625737
Cincinnati, Ohio 45262-5737
(Address of principal executive offices)
Phone: (513) 459-1200
(Telephone number of principal executive offices)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredCommon Stock, no par value

The NASDAQ Stock Market LLC (NASDAQ Global Select Market)


Securities registered pursuant to Section 12(g) of the Act:
None

Indicate
by checkmark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES

ü

NO


Indicate by checkmark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES



NO

ü


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, and (2) has been subject to such filing requirements for the past 90 days.

YES

ü

NO


Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to the Form 10-K.

Indicate
by a checkmark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

YES



NO


Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large
Accelerated Filer ü       Accelerated
Filer        Smaller Reporting
Company        Non-Accelerated
Filer        (Do not check if a smaller reporting company)

Indicate
by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES



NO

ü


The aggregate market value of the Common Stock held by non-affiliates as of November 30, 2009, was $4,294,096,390 based on a closing sale
price of $28.09 per share. As of June 30, 2010, 173,207,493 shares of Common Stock were issued and 152,869,848 shares were outstanding.

Documents
Incorporated by Reference

Portions
of the Registrant's Proxy Statement to be filed with the Commission for its 2010 Annual Meeting of Shareholders are incorporated by reference in Part III as specified.

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Cintas Corporation  Index to Annual Report on Form 10-K



PagePart IItem 1.

Business

3Item 1A.

Risk Factors

4Item 1B.

Unresolved Staff Comments

9Item 2.

Properties

9Item 3.

Legal Proceedings

10Item 4.

[Reserved]

10Part IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

11Item 6.

Selected Financial Data

13Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operation

14Item 7A.

Quantitative and Qualitative Disclosure About Market Risk

29Item 8.

Financial Statements and Supplementary Data

31Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

67Item 9A.

Controls and Procedures

67Item 9B.

Other Information

67Part IIIItem 10.

Directors and Executive Officers of the Registrant

68Item 11.

Executive Compensation

68Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

68Item 13.

Certain Relationships and Related Transactions, and Director Independence

68Item 14.

Principal Accountant Fees and Services

68Part IVItem 15.

Exhibits and Financial Statement Schedules

69


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Table of Contents

Part I

Item 1.  Business

Cintas Corporation (Cintas), a Washington corporation, provides highly specialized products and services to businesses of all types
primarily throughout North America and Latin America, Europe and Asia. Cintas' products and services are designed to enhance its customers' images and brand identification as well as provide a safe
and efficient work place. Cintas was founded in 1968 by Richard T. Farmer, currently the Chairman Emeritus of the Board, when he left his family's industrial laundry business in order to develop
uniform programs using an exclusive new fabric. In the early 1970's, Cintas acquired the family industrial laundry business. Over the years, Cintas developed additional products and services that
complemented its core uniform business and broadened the scope of products and services available to its customers.

Cintas
classifies its businesses into four operating segments. The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms and other garments
including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning
services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The
First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of
document destruction, document imaging and document retention services.

We
provide our products and services to approximately 800,000 businesses of all types  from small service and manufacturing companies to major corporations that employ thousands of
people. This diversity in customer base results in no individual customer accounting for greater than one percent of Cintas' total revenue. As a result, the loss of one account would not have a
significant financial impact on Cintas.

The
following table sets forth Cintas' total revenue and the revenue derived from each operating segment:

Fiscal Year Ended May 31, (in thousands)


2010


2009


2008Rental Uniforms and Ancillary Products

$
2,569,357

$
2,755,015

$
2,834,568Uniform Direct Sales


386,370


428,369


517,490First Aid, Safety and Fire Protection Services


338,651


378,097


403,552Document Management Services


252,961


213,204


182,290$
3,547,339

$
3,774,685

$
3,937,900


Additional information is also included in Note 14 entitled Operating Segment Information in "Notes to Consolidated Financial Statements."

The
primary markets served by all Cintas operating segments are local in nature and highly fragmented. Cintas competes with national, regional and local providers, and the level of competition varies
at each of Cintas' local operations. Product, design, price, quality, service and convenience to the customer are the competitive elements in each of our operating segments.

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Within
the Rental Uniforms and Ancillary Products operating segment, Cintas provides its products and services to customers via local delivery routes originating from rental processing plants and
branches. Within the Uniform Direct Sales and First Aid, Safety and Fire Protection Services operating segments, Cintas provides its products and services via its distribution network and local
delivery routes or local representatives. Within the Document Management Services operating segment, Cintas provides its services via local service routes originating from document management branches
and document retention facilities. In total, Cintas has approximately 7,700 local delivery routes, 418 operations and 8 distribution centers. At May 31, 2010, Cintas employed approximately
30,000 employees of which approximately 225 were represented by labor unions.

Cintas
sources finished products from many outside suppliers. In addition, Cintas operates 6 manufacturing facilities which provide for standard uniform needs. Cintas purchases fabric, used in its
manufacturing process, from several suppliers. Cintas is not aware of any circumstances that would hinder its ability to continue obtaining these materials.

Cintas
is subject to various environmental laws and regulations, as are other companies in the uniform rental industry. While environmental compliance is not a material component of our costs, Cintas
must incur capital expenditures and associated operating costs, primarily for water treatment and waste removal, on a regular basis. Environmental spending related to water treatment and waste removal
was approximately $18 million in fiscal 2010 and approximately $19 million in fiscal 2009. Capital expenditures to limit or monitor hazardous substances were less than $1 million
in fiscal 2010 and approximately $2 million in fiscal 2009. Cintas does not
expect a material change in the cost of environmental compliance and is not aware of any material non-compliance with environmental laws.

Cintas'
corporate website is located at www.cintas.com. Cintas files with or furnishes to the SEC Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and any amendments to those reports, as well as proxy statements and annual reports to shareholders, and, from time to time, other documents. The reports and other documents
filed with or furnished to the SEC are available to investors on or through our corporate website free of charge as soon as reasonably practicable after we electronically file them with or furnish
them to the SEC. In addition, the public may read and copy any of the materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site located at
http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, such as Cintas, that file electronically with the SEC. Cintas' SEC filings and its
Code of Business Conduct can be found on the Investor Information page of our website at www.cintas.com/company/investor_information/highlights.aspx. These documents are available in print to
any shareholder who requests a copy by writing or calling Cintas as set forth on the Investor Information page.

Item 1A.  Risk Factors

The statements in this section describe the most significant risks that could materially and adversely affect our business, financial
condition and results of operation and the trading price of our debt or equity securities.

In
addition, this section sets forth statements which constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995.

This Annual Report on Form 10-K contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil
litigation for forward-looking statements. Forward-looking statements may be identified by words such as "estimates," "anticipates," "predicts," "projects," "plans," "expects," "intends," "target,"
"forecast," "believes," "seeks," "could," "should," "may" and "will" or the negative versions thereof and

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similar expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. We cannot guarantee that any
forward-looking statement will be realized. These statements are subject to various risks, uncertainties and other factors that could cause actual results to differ from those set forth in or implied
by this Annual Report. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy costs, lower sales
volumes, loss of customers due to outsourcing trends, the effects of credit market volatility and changes in our credit ratings, fluctuations in foreign currency exchange, the performance and costs of
integration of acquisitions, fluctuations in costs of materials and labor including increased medical costs, costs and possible effects of union organizing activities, failure to comply with
government regulations concerning employment discrimination, employee pay and benefits and employee health and safety, uncertainties regarding any existing or newly-discovered expenses and liabilities
related to environmental compliance and remediation, asset impairment charges, the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act
of 2002, disruptions caused by the unaccessibility of computer systems data, the initiation or outcome of litigation, higher assumed sourcing or distribution costs of products, the disruption of
operations from catastrophic events, changes in federal and state tax and labor laws, the reactions of competitors in terms of price and service and other factors set forth in this Item 1A.
"Risk Factors" section. Cintas undertakes no obligation to update any forward-looking statements whether as a result of new information or to reflect events or circumstances arising after the date on
which they are made.

Negative global economic factors may adversely affect our financial performance.Negative economic conditions, in North America and our other markets, may adversely affect our financial performance. Higher levels of unemployment, inflation, tax rates and other changes in tax laws
and other economic factors could adversely affect the demand for Cintas' products and services. Increases in labor costs, including healthcare and insurance costs, labor shortages or shortages of
skilled labor, higher material costs for items such as fabrics and textiles, lower recycled paper prices, higher interest rates, inflation, higher tax rates and other changes in tax laws and other
economic factors could increase our costs of rental uniforms and ancillary products and other services and selling and administrative expenses. As a result, these factors could adversely affect our
sales and results of operation.

Increased competition could adversely affect our financial performance.We operate in highly competitive industries and compete with national, regional and local providers. Product, design, price, quality, service and convenience to the customer are the competitive
elements in these industries. If existing or future competitors seek to gain or retain market share by reducing prices, Cintas may be required to lower prices, which would hurt our results of
operation. Cintas' competitors also generally compete with Cintas for acquisition candidates, which can increase the price for acquisitions and reduce the number of available acquisition candidates.
In addition, our customers and prospects may decide to perform
certain services in-house instead of outsourcing these services to Cintas. These competitive pressures could adversely affect our sales and results of operation.

An inability to open new, cost effective operating facilities may adversely affect our expansion efforts.We plan to expand our presence in existing markets and enter new markets. The opening of new operating facilities is necessary to gain the capacity required for this expansion. Our ability to open new
operating facilities depends on our ability to identify attractive locations, negotiate leases or real estate purchase agreements on acceptable terms, identify and obtain adequate utility and water
sources and comply with environmental regulations, zoning laws and other similar factors. Any inability to effectively identify and manage these items may adversely affect our expansion efforts, and,
consequently, adversely affect our financial performance.

Risks associated with our acquisition practice could adversely affect our results of operation.Historically, a portion of our growth has come from acquisitions. We continue to evaluate opportunities for

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acquiring
businesses that may supplement our internal growth. However, there can be no assurance that we will be able to locate and purchase suitable acquisitions. In addition, the success of any
acquisition depends in part on our ability to integrate the acquired company. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate
amount of our management's attention and our financial and other resources. Although we conduct due diligence investigations prior to each acquisition, there can be no assurance that we will discover
or adequately protect against all material liabilities of an acquired business for which we may be responsible as a successor owner or operator. The failure to successfully integrate these acquired
businesses or to discover such liabilities could adversely affect our results of operation.

Increases in fuel and energy costs could adversely affect our results of operation and financial condition.The price of fuel and energy needed to run our vehicles and equipment is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for
oil and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing countries, regional production patterns, limits on refining capacities, natural disasters and
environmental concerns. Future increases in fuel and energy costs could adversely affect our results of operation and financial condition.

Unionization campaigns could adversely affect our results of operation.Cintas continues to be the target of a corporate unionization campaign by several unions. These unions are attempting to pressure Cintas into surrendering our employees' rights to a
government-supervised election by unilaterally accepting union representation. We continue to vigorously oppose this campaign and defend our employees' rights to a government-supervised election. This
campaign could be materially disruptive to our business and could materially adversely affect our results of operation.

Risks associated with the suppliers from whom our products are sourced could adversely affect our results of operation.The products we sell are sourced from a wide variety of domestic and international suppliers. Global sourcing of many of the products we sell is an important factor in our financial performance. We
require all of our suppliers to comply with applicable laws, including labor and environmental laws, and otherwise be certified as meeting our required supplier standards of conduct. Our ability to
find qualified suppliers who meet our standards, and to access products in a timely and efficient manner is a significant challenge, especially with respect to suppliers located and goods sourced
outside the U.S. Political and economic stability in the countries in which foreign suppliers are located, the financial stability of suppliers, suppliers' failure to meet our supplier standards,
labor problems experienced by our suppliers, the availability of raw materials to suppliers, currency exchange rates, transport availability and cost, inflation and other factors relating to the
suppliers and the countries in which they are located are beyond our control. In addition, U.S. and foreign trade policies, tariffs and other impositions on imported goods, trade sanctions imposed on
certain countries, the limitation on the importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade are beyond our
control. These and other factors affecting our suppliers and our access to products could adversely affect our results of operation.

Fluctuations in foreign currency exchange could adversely affect our financial condition and results of operation.We earn revenue, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar, including the Canadian dollar and the euro. In fiscal years 2010, 2009 and
2008, revenue denominated in currencies other than the U.S. dollar represented less than 10% of our consolidated revenue. Because our consolidated financial statements are presented in U.S. dollars,
we must translate revenue, income and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, fluctuations
in the value of the U.S. dollar against other major currencies, particularly in the event of significant increases in foreign currency revenue, will impact our revenue and operating income and the
value of

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balance
sheet items denominated in foreign currencies. This impact could adversely affect our financial condition and results of operation.

Failure to comply with the regulations of the U.S. Occupational Safety and Health Administration and other state and local agencies that oversee safety compliance could
adversely affect our results of operation.The Occupational Safety and Health Act of 1970, as amended, or "OSHA", establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause
death or serious injury, compliance with standards promulgated by OSHA and various record keeping, disclosure and procedural requirements. Various OSHA standards may apply to our operations. We have
incurred, and will continue to incur, capital and operating expenditures and other costs in the ordinary course of our business in complying with OSHA and other state and local laws and regulations.
Any failure to comply with these regulations could result in fines by government authorities and payment of damages to private litigants and affect our ability to service our customers and adversely
affect our results of operation.

We are subject to legal proceedings that may adversely affect our financial condition and results of operation.We are party to various litigation claims and legal proceedings. We discuss these lawsuits and other litigation to which we are party in greater detail under the caption "Item 3. Legal
Proceedings" and in Note 13 entitled Litigation and Other Contingencies of "Notes to Consolidated Financial Statements." Certain of these lawsuits or potential future lawsuits, if decided
adversely to us or settled by us, may result in liability and expense material to our financial condition and results of operation.

Compliance with environmental laws and regulations could result in significant costs that adversely affect our results of operation.Our operating locations are subject to environmental laws and regulations relating to the protection of the environment and health and safety matters, including those governing discharges of
pollutants to the air and water, the management and disposal of hazardous substances and wastes and the clean-up of contaminated sites. The operation of our businesses entails risks under
environmental laws and regulations. We could incur significant costs, including clean-up costs, fines and sanctions and claims by third parties for property damage and personal injury, as
a result of violations of or liabilities under these laws and regulations. We are currently involved in a limited number of remedial investigations and actions at various locations. While based on
information currently known to us, we believe that we maintain adequate reserves with respect to these matters, our liability could exceed forecasted amounts, and the imposition of additional
clean-up obligations or the discovery of additional contamination at these or other sites could result in significant additional costs which could adversely affect our results of
operation. In addition, potentially significant expenditures could be required to comply with environmental laws and regulations, including requirements that may be adopted or imposed in the future.

Under
environmental laws, an owner or operator of real estate may be required to pay the costs of removing or remediating hazardous materials located on or emanating from property, whether or not the
owner or operator knew of or was responsible for the presence of such hazardous materials. While Cintas regularly engages in environmental due diligence in connection with acquisitions, we can give no
assurance that locations that have been acquired or leased have been operated in compliance with environmental laws and regulations during prior periods or that future uses or conditions will not make
us liable under these laws or expose us to third-party actions including tort suits.

We rely extensively on computer systems to process transactions, maintain information and manage our businesses. Disruptions in the availability of our computer systems could
impact our ability to service our customers and adversely affect our sales and results of operation.Our businesses rely on our computer systems to provide customer information, process customer transactions and provide other general information necessary to manage our businesses. We have an active
disaster recovery plan in

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place
that is frequently reviewed and tested. However, our computer systems are subject to damage or interruption due to system conversions, power outages, computer or telecommunication failures,
computer
viruses, security breaches, catastrophic events such as fires, tornadoes and hurricanes and usage errors by our employees. If our computer systems are damaged or cease to function properly, we may
have to make a significant investment to fix or replace them, and we may have interruptions in our ability to service our customers. This disruption caused by the unavailability of our computer
systems could adversely affect our sales and results of operation.

Failure to achieve and maintain effective internal controls could adversely affect our business and stock price.Effective internal controls are necessary for us to provide reliable financial reports. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to the consolidated financial statement preparation and presentation. While we continue to evaluate our internal
controls, we cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. If we fail to maintain the
adequacy of our internal controls or if we or our independent registered public accounting firm were to discover material weaknesses in our internal controls, as such standards are modified,
supplemented or amended, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of
the Sarbanes-Oxley Act of 2002. Failure to achieve and maintain an effective internal control environment could cause us to be unable to produce reliable financial reports or prevent fraud. This may
cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our stock price.

We may experience difficulties in attracting and retaining competent personnel in key positions.We believe that a key component of our success is our corporate culture which has been imparted by management throughout our corporate organization. This factor, along with our entire operation,
depends on our ability to attract and retain key employees. Competitive pressures within and outside our industry may make it more difficult and expensive for us to attract and retain key employees
which could adversely affect our businesses.

Unexpected events could disrupt our operations and adversely affect our results of operation.Unexpected events, including fires or explosions at facilities, natural disasters such as hurricanes and tornados, war or terrorist activities, unplanned outages, supply disruptions, failure of
equipment or systems or changes in laws and/or regulations impacting our businesses, could adversely affect our results of operation. These events could result in customer disruption, physical damage
to one or more key operating facilities, the temporary closure of one or more key operating facilities or the temporary disruption of information systems.

We may recognize impairment charges which could adversely affect our results of operation and financial condition.We assess our goodwill and other intangible assets and our long-lived assets for impairment when required by U.S. generally accepted accounting principles. These accounting principles
require that we record an impairment charge if circumstances indicate that the asset carrying values exceed their fair values. The fair value of these assets is impacted by general economic conditions
in the locations in which we operate. Deterioration in these general economic conditions may result in: declining revenue which can lead to excess capacity and declining operating cash flow;
reductions in management's estimates for future revenue and operating cash flow growth; increases in borrowing rates and other deterioration in factors that impact
our weighted average cost of capital; and deteriorating real estate values. If our assessment of goodwill, other intangible assets or long-lived assets indicates an impairment of the
carrying value for which we recognize an impairment charge, this may adversely affect our results of operation and financial condition.

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Within our Document Management business, we handle customers' confidential information. Our failure to protect our customers' confidential information against security breaches
could damage our reputation, harm our business and adversely impact our results of operation.Our Document Management Services business includes both document destruction and document retention services. These services involve the handling of our customers' confidential information and the
subsequent destruction or retention of this information. Any compromise of security, accidental loss or theft of customer data in our possession could damage our reputation and expose us to risk of
liability, which could harm our business and adversely impact our results of operation.

The effects of credit market volatility and changes in our credit ratings could adversely affect our liquidity and results of operation.Our operating cash flows, combined with access to the credit markets, provide us with significant discretionary funding capacity. However, deterioration in the global credit markets may limit our
ability to access credit markets, which could adversely affect our liquidity and/or increase our cost of borrowing. In addition, credit market deterioration and its actual or perceived effects on our
results of operation and financial condition, along with deterioration in general economic conditions, may increase the likelihood that the major independent credit agencies will downgrade our credit
ratings, which could increase our cost of borrowing. Increases in our cost of borrowing could adversely affect our results of operation.

Item 1B.  Unresolved Staff Comments

Not applicable.

Item 2.  Properties

Cintas occupies 426 facilities located in 281 cities. Cintas leases 224 of these facilities for various terms ranging from monthly to
the year 2019. Cintas expects that it will be able to renew or replace its leases on satisfactory terms. Of the 6 manufacturing facilities listed below, Cintas controls the operations of 2 of these
manufacturing facilities, but does not own or lease the real estate related to these operations. All other facilities are owned. The principal executive office in Cincinnati, Ohio, provides centrally
located administrative functions including accounting, finance, marketing and computer system development and support. Cintas operates rental processing plants that house administrative, sales and
service personnel and the necessary equipment involved in the cleaning of uniforms and bulk items, such as entrance mats and shop towels. Branch operations provide administrative, sales and service
functions. Cintas operates 8 distribution centers and 6 manufacturing facilities. Cintas also operates first aid, safety and fire protection and document management facilities and direct sales
offices. Cintas considers the facilities it operates to be adequate for their intended use. Cintas owns or leases approximately 14,500 vehicles which are used for the route-based services and by the
sales and management employee-partners.

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The
following chart provides additional information concerning Cintas' facilities:

Type of Facility


# of FacilitiesRental Processing Plants


171Rental Branches


105First Aid, Safety and Fire Protection Facilities


59Document Management Facilities


62Distribution Centers


8
*Manufacturing Facilities


6Direct Sales Offices


15Total


426


Rental processing plants, rental branches, distribution centers and manufacturing facilities are used in Cintas' Rental Uniforms and Ancillary Products operating segment. Rental
processing plants, rental branches, distribution centers, manufacturing facilities and direct sales offices are all used in the Uniform Direct Sales operating segment. First aid, safety and fire
protection facilities, rental processing facilities and distribution centers are used in the First Aid, Safety and Fire Protection Services operating segment. Document management facilities and rental
processing facilities are used in the Document Management Services operating segment.

* Includes the principal executive office, which is attached to the distribution center in Cincinnati, Ohio.

Item 3.  Legal Proceedings

We discuss material legal proceedings (other than ordinary routine litigation incidental to our business) pending against us in
"Item 8. Financial Statements and Supplementary Data," in Note 13 entitled Litigation and Other Contingencies of "Notes to Consolidated Financial Statements." We refer you to and
incorporate by reference into this Item 3 that discussion for important information concerning those legal proceedings, including the basis for such actions and, where known, the relief sought.

Item 4.  [Reserved]

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Part II

Item 5.  Market for Registrant's Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Cintas' common stock is traded on the NASDAQ Global Select Market under the symbol "CTAS." The following table shows the high and low
closing prices of shares of Cintas' common stock by quarter during the last two fiscal years:

Fiscal 2010Quarter Ended


High


LowMay 2010

$
28.73

$
24.86February 2010


29.68


23.75November 2009


30.69


26.81August 2009


28.00


21.61Fiscal 2009Quarter Ended


High


LowMay 2009

$
26.83

$
18.15February 2009


25.70


20.06November 2008


33.05


19.80August 2008


31.38


25.44


Holders

At May 31, 2010, there were approximately 4,000 shareholders on record of Cintas' common stock. Cintas believes that this
represents approximately 72,000 beneficial owners.

Dividends

Dividends on the outstanding common stock have been paid annually and amounted to $0.48 per share, $0.47 per share and $0.46 per share
in fiscal 2010, fiscal 2009 and fiscal 2008, respectively.

Stock Performance Graph

The following graph summarizes the cumulative return on $100 invested in Cintas' common stock, the S&P 500 Stock Index and the
common stocks of a selected peer group of companies. Because our products and services are diverse, Cintas does not believe that any single published industry index is appropriate for comparing
shareholder return. Therefore, the peer group used in the performance graph combines four publicly traded companies in the business services industry that have similar characteristics as Cintas, such
as route-based delivery of products and services. The companies included in the peer group are G & K Services, Inc., UniFirst Corporation, ABM Industries and Ecolab, Inc.

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Total
shareholder return was based on the increase in the price of the stock and assumed reinvestment of all dividends. Further, total return was weighted according to market capitalization of each
company. The companies in the peer group are not the same as those considered by the Compensation Committee of the Board of Directors.

Total Shareholder Returns
Comparison of Five-Year Cumulative Total Return

GRAPHIC

Purchases of Equity Securities by the Issuer and Affiliated Purchases

On May 2, 2005, Cintas announced that the Board of Directors authorized a $500 million share buyback program at market
prices. In July 2006, Cintas announced that the Board of Directors approved the expansion of its share buyback program by an additional $500 million. The Board of Directors did not specify an
expiration date for the share buyback program.

Cintas
did not purchase any shares of Cintas common stock in fiscal 2010 under the share buyback program. From the inception of the share buyback program through July 30, 2010, Cintas has
purchased a total of 20.3 million shares of Cintas' common stock at an average price of $39.31 per share for a total purchase price of approximately $798 million. The maximum approximate
dollar value of shares that may yet be purchased under the share buyback program as of July 30, 2010, is approximately $202 million.

During
fiscal 2010, Cintas purchased approximately 43,000 shares of Cintas' common stock in trade for employee payroll taxes due on restricted stock options that vested during the fiscal year. These
shares were purchased at an average price of $22.71 per share for a total purchase price of approximately $1 million.

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Item 6.  Selected Financial Data

Eleven-Year Financial Summary

(In thousands except per share and percentage data)Fiscal
Years Ended
May 31,


2000


2001


2002


2003


2004


2005


2006


2007


2008


2009


2010


10-Year
Compd
GrowthRevenue

$
1,901,991


2,160,700


2,271,052


2,686,585


2,814,059


3,067,283


3,403,608


3,706,900


3,937,900


3,774,685


3,547,339


6.4%Net Income

$
190,386


218,665


229,466


243,191


265,078


292,547


323,382


334,538


335,405


226,357


215,620


1.3%Basic EPS

$
1.14


1.30


1.35


1.43


1.55


1.70


1.93


2.09


2.15


1.48


1.40


2.1%Diluted EPS

$
1.12


1.27


1.33


1.41


1.54


1.69


1.92


2.09


2.15


1.48


1.40


2.3%Dividends Per Share

$
0.19


0.22


0.25


0.27


0.29


0.32


0.35


0.39


0.46


0.47


0.48


9.7%Total Assets

$
1,581,342


1,752,224


2,519,234


2,582,946


2,810,297


3,059,744


3,425,237


3,570,480


3,808,601


3,720,951


3,969,736


9.6%Shareholders' Equity

$
1,042,896


1,231,346


1,423,814


1,646,418


1,888,093


2,104,574


2,090,192


2,167,738


2,254,131


2,367,409


2,534,029


9.3%Return on Average Equity (1)


19.9%


19.2%


17.3%


15.8%


15.0%


14.7%


15.4%


15.7%


15.2%


9.8%


8.8%Long-Term Debt

$
254,378


220,940


703,250


534,763


473,685


465,291


794,454


877,074


942,736


786,058


785,444


(1)Return
on average equity is computed as net income divided by the average of shareholders' equity. We believe that this calculation gives
management and shareholders a good indication of Cintas' historical performance.


13

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Table of Contents

Item 7.  Management's Discussion and Analysisof Financial Condition and Results of Operation

Business Strategy

Cintas provides highly specialized products and services to businesses of all types primarily throughout North America and Latin
America, Europe and Asia. We bring value to our customers by helping them provide a cleaner, safer and more pleasant atmosphere for their customers and employees. Our products and services are
designed to improve our customers' images. We also help our customers protect their employees and their company by enhancing workplace safety and helping to ensure legal compliance in key areas of
their business.

We
are North America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats,
restroom cleaning services and supplies, carpet and tile cleaning services, first aid, safety and fire protection products and services, document management services and branded promotional products.

Cintas'
principal objective is "to exceed customers' expectations in order to maximize the long-term value of Cintas for shareholders and working partners," and it provides the framework
and focus for our business strategy. This strategy is to achieve revenue growth for all of our products and services by increasing our penetration at existing customers and by broadening our customer
base to include business segments to which Cintas has not historically served. We will also continue to identify additional product and service opportunities for our current and future customers.

To
pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our
customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional
products and services.

We
pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all of our products and services to prospects in all business segments. Our
broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion, especially in our
emerging businesses of first aid and safety, fire protection and document management. Finally, we evaluate strategic acquisitions as opportunities arise.

Results of Operation

The economic downturn that occurred in fiscal 2009 continued throughout most of our fiscal 2010. The U.S. economy, which lost millions
of jobs in our fiscal 2009, continued to lose jobs through the first three quarters of our fiscal 2010. These job losses directly affected our business as many of our products and services are
dependent on customer employee levels. We were encouraged, though, that the rate of U.S. job loss lessened as we progressed through the first three quarters of fiscal 2010, and U.S. employment levels
slightly increased in our fourth fiscal 2010 quarter. As this stabilization occurred in the general U.S. economic environment, our internal growth rate improved.

14

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Table of Contents

Internal
growth by quarter is shown in the table below. Internal growth percentages have been adjusted for the appropriate number of workdays, by quarter and for the year, where applicable.

Internal GrowthFirst Quarter Ending August 31, 2009


-12.6
%Second Quarter Ending November 30, 2009


-10.2
%Third Quarter Ending February 28, 2010


-3.6
%Fourth Quarter Ending May 31, 2010


1.9
%For the Year Ending May 31, 2010


-6.4
%


Despite the lower revenue level for the year, we were able to generate improved cash flow, with net cash provided by operating activities of $561.6 million representing a 7.3%
increase compared to fiscal 2009. We also increased the dividend paid to shareholders to $0.48 per share, marking the 27th consecutive increase in the dividend paid.

Cintas
classifies its businesses into four operating segments. The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms and other garments
including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning
services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The
First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of
document destruction, document imaging and document retention services.

15

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Table of Contents

The
following table sets forth certain consolidated statements of income data as a percent to revenue by operating segment and in total for the fiscal years ended May 31:

2010


2009


2008Revenue:Rental Uniforms and Ancillary Products


72.4
%

73.0
%

72.0
%Uniform Direct Sales


11.0
%

11.4
%

13.1
%First Aid, Safety and Fire Protection Services


9.5
%

10.0
%

10.3
%Document Management Services


7.1
%

5.6
%

4.6
%Total revenue


100.0
%

100.0
%

100.0
%Cost of sales:Rental Uniforms and Ancillary Products


56.4
%

56.7
%

55.8
%Uniform Direct Sales


69.9
%

75.2
%

67.5
%First Aid, Safety and Fire Protection Services


61.1
%

61.9
%

60.1
%Document Management Services


48.6
%

49.4
%

45.4
%Total cost of sales


57.8
%

58.9
%

57.3
%Gross margin:Rental Uniforms and Ancillary Products


43.6
%

43.3
%

44.2
%Uniform Direct Sales


30.1
%

24.8
%

32.5
%First Aid, Safety and Fire Protection Services


38.9
%

38.1
%

39.9
%Document Management Services


51.4
%

50.6
%

54.6
%Total gross margin


42.2
%

41.1
%

42.7
%Selling and administrative expenses


30.6
%

28.7
%

28.0
%Legal settlements, net of insurance proceeds


0.7
%




Restructuring charges


-0.1
%

0.3
%

Impairment of long-lived assets





1.3
%

Interest income


-0.1
%

-0.1
%

-0.1
%Interest expense


1.4
%

1.3
%

1.3
%Income before income taxes


9.7
%

9.6
%

13.5
%


Fiscal 2010 Compared to Fiscal 2009

Fiscal 2010 total revenue was $3.5 billion, a decrease of 6.0% compared to fiscal 2009. Total revenue decreased organically by
6.4%. Fiscal 2010 had one more workday than fiscal 2009, and this additional workday in fiscal 2010 accounted for the difference between the total decrease of 6.0% and the organic decrease of 6.4%. As
a result of the economic downturn discussed above, we experienced decreases in uniform revenue, both rented and purchased, and revenue for our hygiene products and first aid and safety products. In
addition, the continued difficult economic environment in fiscal 2010 caused many of our customers to reduce facility spending on items such as entrance mats and shop towels and delay spending on
facility upgrades, resulting in a reduction in our facility services and fire protection revenue.

Rental
Uniforms and Ancillary Products operating segment revenue consists predominantly of revenue derived from the rental of corporate identity uniforms and other garments including flame resistant
clothing, and the rental and/or sale of mats, mops, shop towels, restroom supplies and other rental services. Revenue from the Rental Uniforms and Ancillary Products operating segment decreased 6.7%
compared to fiscal 2009. Rental Uniforms and

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Ancillary
Products operating segment revenue decreased organically by 6.9% in fiscal 2010. The decrease in the Rental Uniforms and Ancillary Products operating segment revenue was primarily due to
decreased uniform wearers caused in large part by the difficult U.S. economic environment in fiscal 2010. Fiscal 2010 had one more workday than fiscal 2009, which resulted in an increase in revenue of
0.4%.

Other
Services revenue, consisting of revenue from the reportable operating segments of Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services, decreased
4.1% compared to fiscal 2009. Other Services revenue decreased organically by 5.2%. Decreases in Uniform Direct Sales operating segment revenue and First Aid, Safety and Fire Protection Services
operating segment revenue were offset by increased revenue in our Document Management Services operating segment. Acquisitions in our First Aid, Safety and Fire Protection Services operating segment
and our Document Management Services operating segment accounted for growth of 0.7% during fiscal 2010. Fiscal 2010 had one more workday than fiscal 2009, which resulted in an increase in revenue of
0.4%.

Cost
of rental uniforms and ancillary products decreased 7.2% compared to fiscal 2009. Cost of rental uniforms and ancillary products consists primarily of production expenses, delivery expenses and
the amortization of in service inventory, including uniforms, mats, mops, shop towels and other ancillary items. The cost decrease compared to fiscal 2009 was primarily driven by the volume decrease
in the Rental Uniforms and Ancillary Products operating segment revenue. We also incurred a loss on inventory valuation of $8.4 million in fiscal 2009 that did not reoccur in fiscal 2010
related to excess inventory levels.

Cost
of other services decreased 9.3% compared to fiscal 2009. Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and
distribution expenses in the Uniform Direct Sales operating segment, the First Aid, Safety and Fire Protection Services operating segment and the Document Management Services operating segment. The
decrease from fiscal 2009 was due to the volume decrease in Other Services revenue. We also incurred a loss on inventory valuation of $19.1 million in fiscal 2009 that did not reoccur in fiscal
2010 related to excess inventory levels.

Selling
and administrative expenses increased $3.7 million, or 0.3%, compared to fiscal 2009. This increase is primarily due to a $9.6 million increase in medical expenses, an increase
of $6.2 million in professional services and depreciation mainly related to the implementation of a new enterprise-wide computer system, and a $3.4 million increase in stock
compensation expense, offset by a $15.6 million reduction in bad debt expense.

Legal
settlements, net of insurance proceeds, of $23.5 million primarily related to a settlement in principle occurring in the first quarter of fiscal 2010 between Cintas and the plaintiffs
involved in the litigation,Paul Veliz, et al. v. Cintas Corporation.The principle terms of the settlement provide for an aggregate cash payment of
approximately $24 million. The pre-tax impact, net of insurance proceeds, was approximately $19.5 million. This settlement is more fully described in Note 13 entitled
Litigation and Other Contingencies in "Notes to Consolidated Financial Statements."

Operating
income of $390.8 million in fiscal 2010 decreased $18.3 million, or 4.5%, compared to fiscal 2009. This decrease was primarily due to lower volumes resulting from the difficult
U.S. economic environment in fiscal 2010.

Net
interest expense (interest expense less interest income) decreased $0.6 million from the prior fiscal year. This decrease was due to a $1.1 million reduction in interest income
caused by lower interest rates on Canadian treasury securities during fiscal 2010 compared to fiscal 2009, offset by a decrease of $1.6 million in interest expense caused by lower levels of
borrowings in fiscal 2010 compared to fiscal 2009.

Income
before income taxes was $343.9 million, a 4.9% decrease compared to fiscal 2009. This change reflects the decrease in operating income described above.

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Table of Contents

Cintas'
effective tax rate was 37.3% for fiscal 2010 as compared to 37.4% and 36.8% for fiscal 2009 and 2008, respectively (also see Note 8 entitled Income Taxes of "Notes to Consolidated
Financial Statements" for more information on income taxes).

Net
income for fiscal 2010 of $215.6 million was a 4.7% decrease compared to fiscal 2009, and diluted earnings per share of $1.40 was a 5.4% decrease compared to fiscal 2009. These changes
reflect the decrease in operating income described above.

Rental Uniforms and Ancillary Products Operating Segment

As discussed above, Rental Uniforms and Ancillary Products operating segment revenue decreased $185.7 million, or 6.7%, and the cost of rental
uniforms and ancillary products decreased $112.7 million, or 7.2%. The operating segment's fiscal 2010 gross margin was 43.6% of revenue compared to 43.3% in fiscal 2009. Excluding a fiscal
2009 loss on inventory valuation of $8.4 million, fiscal 2009 gross margin was 43.6%. Despite the lower volume, we were able to maintain the same gross margin (excluding the loss on inventory)
as a percent to revenue due to lower material cost and due to cost reduction initiatives such as reducing both facility and route capacity resulting in lower depreciation, production labor and other
facility related expenses.

Selling
and administrative expenses for the Rental Uniforms and Ancillary Products operating segment as a percent to revenue, at 30.6%, increased 270 basis points from 27.9% in fiscal 2009. This
increase was due to increased medical expense and an increase in selling labor due to the addition of sales representatives.

The
restructuring amount of ($2.9) million in fiscal 2010 represents a change in estimate related to restructuring charges taken in fiscal 2009. The change in estimate represents the difference
between severance and other exit costs estimated based on information available in fiscal 2009 and severance and other exit costs actually paid in fiscal 2010. See Note 2 entitled Restructuring
and Related Activity of "Notes to Consolidated Financial Statements" for more information.

Income
before income taxes decreased $34.0 million to $336.5 million for the Rental Uniforms and Ancillary Products operating segment for fiscal 2010 compared to fiscal 2009. This
decrease is primarily due to the decrease in revenue described above combined with the increase in selling and administrative expenses.

Uniform Direct Sales Operating Segment

Uniform Direct Sales operating segment revenue decreased $42.0 million, or 9.8%, compared to fiscal 2009. Cost of uniform direct sales
decreased $52.3 million, or 16.2%, compared to fiscal 2009. The gross margin as a percent to revenue of 30.1% for fiscal 2010 increased from 24.8% in fiscal 2009. Excluding a fiscal 2009 loss
on inventory valuation of $16.1 million, gross margin as a percent to revenue was 28.5% in fiscal 2009. Despite the lower volume in fiscal 2010, we were able to improve the gross margin as a
percent to revenue due to cost reduction initiatives such as reducing distribution facility labor to adjust to the lower volumes and by sourcing improvements.

Selling
and administrative expenses as a percent to revenue, at 19.7%, decreased from 22.9% in fiscal 2009. This decrease is due to cost reduction initiatives to adjust the selling labor to better
align with the current volume level.

Income
before income taxes was $40.1 million in fiscal 2010, an increase of $36.9 million compared to fiscal 2009. Fiscal 2009 income before income taxes included a loss on inventory
valuation of $16.1 million and a charge of $4.6 million related to restructuring activities. Additionally, the increase in income before income taxes in fiscal 2010 compared to fiscal
2009 is due primarily to cost reduction initiatives to reduce capacity, labor and other resources to better align with the current volume level.

First Aid, Safety and Fire Protection Services Operating Segment

First Aid, Safety and Fire Protection Services operating segment revenue decreased $39.4 million in fiscal 2010, a 10.4% decrease compared to
fiscal 2009. This operating segment's revenue decreased organically by 10.6%. The

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difficult
U.S. economic environment, which included job losses in fiscal 2010 and reductions in facility spending, directly impacted this operating segment's revenue. Acquisitions accounted for an
increase in revenue of 0.2%. Fiscal 2010 had one more workday than fiscal 2009, which resulted in an increase in revenue of 0.4%.

Cost
of first aid, safety and fire protection services decreased $27.0 million, or 11.5%, in fiscal 2010, due primarily to decreased First Aid, Safety and Fire Protection Services operating
segment volume. Gross margin for the First Aid, Safety and Fire Protection Services operating segment is defined as revenue less cost of goods, warehouse expenses, service expenses and training
expenses. The gross margin as a percent to revenue was 38.9% for fiscal 2010 compared to 38.1% in fiscal 2009. Excluding a fiscal 2009 loss on inventory valuation of $3.0 million, gross margin
as a percent to revenue was 38.9% in fiscal 2009. Despite the lower volume, we were able to maintain the same gross margin (excluding the loss on inventory) as a percent to revenue due to the
elimination of lower margin fire installation business throughout the course of fiscal 2010 and due to cost reduction initiatives resulting in lower labor related expenses.

Selling
and administrative expenses decreased by $8.8 million in fiscal 2010 compared to fiscal 2009 primarily due to lower bad debt expense resulting from improved collection efforts. Selling
and administrative expenses as a percent to revenue, at 34.9%, increased from 33.6% in fiscal 2009. This increase as a percent to revenue was due to lower volume.

Income
before income taxes for the First Aid, Safety and Fire Protection Services operating segment was $13.4 million in fiscal 2010 compared to $15.9 million in fiscal 2009. This
decrease was primarily due to the reduced volume in First Aid, Safety and Fire Protection Services operating segment.

Document Management Services Operating Segment

Document Management Services operating segment revenue increased $39.8 million for fiscal 2010, or 18.6%, over fiscal 2009. This operating
segment's internal growth for fiscal 2010 was 14.4% over fiscal 2009. The internal growth is primarily due to the sale of destruction services to new customers and an increase in recycled paper
revenue. This operating segment derives a portion of its revenue from the sale of shredded paper to paper recyclers. The weighted average price of standard office paper, which accounts for the
majority of the recycled paper revenue, increased by 6.4% in fiscal 2010 compared to fiscal 2009. Acquisitions accounted for revenue growth of 3.8%. Fiscal 2010 had one more workday than fiscal 2009,
which resulted in an increase in revenue of 0.4%.

Cost
of document management services increased $17.7 million, or 16.8%, for fiscal 2010, due to increased Document Management Services operating segment volume. Gross margin for the Document
Management Services operating segment is defined as revenue less production and service costs. The gross margin as a percent to revenue was 51.4% for fiscal 2010, an increase from 50.6% in fiscal
2009. This increase from fiscal 2009 is mainly due to the increase in recycled paper prices in fiscal 2010 compared to fiscal 2009.

Selling
and administrative expenses as a percent to revenue was 41.8% for fiscal 2010 compared to 41.4% in fiscal 2009. This increase was due to an increase in selling labor due to the addition of
sales representatives and increased medical expense.

Income
before income taxes for the Document Management Services operating segment was $24.3 million, an increase of $4.9 million compared to fiscal 2009. Income before income taxes was
9.6% of the operating segment's revenue compared to 9.1% in fiscal 2009. This increase is due to the increase in the average price of standard office paper, offset by the increase in selling and
administrative expenses.

19

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Table of Contents

Fiscal 2009 Compared to Fiscal 2008

The economic environment in fiscal 2009 presented challenges not experienced in decades. The financial crisis which began in
September, 2008, caused many of our customers to immediately reduce spending. As the economic turmoil continued, we saw our customers make dramatic reductions in spending. Significant job losses in
North America followed the financial crisis as these economies lost millions of jobs from October 2008 through May 2009.

The
suddenness and severity of the economic downturn required us to react quickly to reduce our cost structure. Beginning in the second quarter of fiscal 2009, we closed two manufacturing plants in
Kentucky, initiated hiring and wage freezes in many parts of the organization, eliminated many overhead positions and reduced discretionary and capital spending. These initiatives resulted in a
reduction to selling and administrative expenses of approximately $60 million when comparing the last six months of fiscal 2009 to the first six months of fiscal 2009.

In
addition to the actions described above, we initiated restructuring activities during the fourth quarter of fiscal 2009 to reduce excess capacity and further reduce our cost structure. These
activities included closing or converting to branches 16 of our rental processing plants and reducing our workforce by 1,200 employees. These restructuring activities were substantially completed in
fiscal 2010. During the fourth quarter of fiscal 2009, we recorded charges of $48.9 million in long-lived asset impairment costs, $7.9 million in employee termination costs
and $2.3 million in other exit costs for a total of $59.1 million that will be incurred as a result of this restructuring. The following summarizes these amounts by operating segment:

(In millions) May 31, 2009


Rental
Uniforms
& Ancillary
Products


Uniform
Direct
Sales


First Aid,
Safety &
Fire
Protection


Document
Management


TotalRestructuring charges

$
8.8

$
0.5

$
0.6

$
0.3

$
10.2Impairment of long-lived assets


44.2


4.1


0.6





48.9Loss before income taxes

$
53.0

$
4.6

$
1.2

$
0.3

$
59.1


The significant deterioration of the North American economy, particularly in the last five months of the year ended May 31, 2009, which led to reduced revenue levels in our
Rental Uniforms and Ancillary Products operating segment, our Uniform Direct Sales operating segment and our First Aid, Safety and Fire Protection Services operating segment, created excess inventory
levels in these operating segments. As a result, we reduced the carrying amount of specific inventory to realizable values and recorded a pre-tax loss in the year ended May 31,
2009, of $27.5 million. The following summarizes this loss by operating segment:

(In millions) May 31, 2009


Rental
Uniforms
& Ancillary
Products


Uniform
Direct
Sales


First Aid,
Safety &
Fire
Protection


Document
Management


TotalCost of rental uniforms and ancillary products

$
8.4

$


$


$


$
8.4Cost of other services





16.1


3.0





19.1Loss on inventory valuation

$
8.4

$
16.1

$
3.0

$


$
27.5


Fiscal 2009 total revenue was $3.8 billion, a decrease of 4.1% compared to fiscal 2008. Acquisitions in our First Aid, Safety and Fire Protection Services operating segment and
our Document Management Services operating segment accounted for growth of 0.7% during fiscal 2009. Information related to acquisitions is discussed in Note 9 entitled Acquisitions of "Notes to
Consolidated Financial Statements." Total revenue decreased organically by

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4.5%.
The difficult North American economic environment that began with the financial crisis in our second quarter of fiscal 2009 deteriorated in our third and fourth fiscal quarters of fiscal 2009.
These economies lost millions of jobs from October, 2008, through May, 2009. Because of customer job losses, we experienced decreases in uniform revenue, both rented and purchased, and revenue for our
hygiene products and first aid and safety products. In addition, facility closures by our customers reduced our volume of entrance mats, mops, shop towels and other facility needs such as fire
protection services and document management services. Fiscal 2009 had one fewer workday than fiscal 2008, which resulted in a decrease in revenue of 0.3%.

Rental
Uniforms and Ancillary Products operating segment revenue consists predominantly of revenue derived from the rental of corporate identity uniforms and other garments including flame resistant
clothing, and the rental and/or sale of mats, mops, shop towels, restroom supplies and other rental services. Revenue from the Rental Uniforms and Ancillary Products operating segment decreased 2.8%
compared to fiscal 2008. Rental Uniforms and Ancillary Products operating segment revenue decreased organically by 2.4% in fiscal 2009. The decrease in the Rental Uniforms and Ancillary Products
operating segment revenue was primarily due to decreased uniform wearers caused in large part by job losses in the U.S. and Canadian economies during fiscal 2009. Fiscal 2009 had one fewer workday
than fiscal 2008, which resulted in a decrease in revenue of 0.4%.

Other
Services revenue, consisting of revenue from the reportable operating segments of Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services, decreased
7.6% compared to fiscal 2008. Acquisitions in our First Aid, Safety and Fire Protection Services operating segment and our Document Management Services operating segment accounted for growth of 2.5%
during fiscal 2009. Other Services revenue decreased organically by 9.7%. The turmoil in the U.S. and Canadian economies significantly affected our Other Services revenue, particularly in the Uniform
Direct Sales and First Aid, Safety and Fire Protection Services operating segments. The revenue decreases in these operating segments were partially offset by increased revenue in our Document
Management Services operating segment. Fiscal 2009 had one fewer workday than fiscal 2008, which resulted in a decrease in revenue of 0.4%.

Cost
of rental uniforms and ancillary products decreased 1.2% compared to fiscal 2008. Cost of rental uniforms and ancillary products consists primarily of production expenses, delivery expenses and
the amortization of in service inventory, including uniforms, mats, mops, shop towels and other ancillary items. The cost decrease compared to fiscal 2008 was primarily driven by the volume decrease
in the Rental Uniforms and Ancillary Products operating segment revenue. The cost decrease due to reduced volume was partially offset by a loss on inventory valuation of $8.4 million, as
described above.

Cost
of other services decreased 1.9% compared to fiscal 2008. Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and
distribution expenses in the Uniform Direct Sales operating segment, the First Aid, Safety and Fire Protection Services operating segment and the Document Management Services operating segment. The
decrease from fiscal 2008 was due to the volume decrease in other services. The cost decrease due to reduced volume was partially offset by a loss on inventory valuation of $19.1 million, as
described above.

Selling
and administrative expenses decreased $21.4 million, or 1.9%, compared to fiscal 2008. This decrease is primarily due to a decrease of $18.9 million in labor costs and payroll
taxes related to our fiscal 2009 cost reduction efforts.

Operating
income of $409.1 million in fiscal 2009 decreased $168.4 million, or 29.2%, compared to fiscal 2008. Excluding the loss on inventory valuation of $27.5 million and the
charges of $59.1 million relating to the restructuring activities, operating income decreased by $81.8 million, or 14.2%, compared to fiscal 2008. This decrease was primarily due to
lower volumes brought on by the turmoil in the U.S. and Canadian economies in fiscal 2009.

21

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Table of Contents

Net interest expense (interest expense less interest income) of $46.9 million in fiscal 2010 increased $0.7 million from the prior fiscal year. This increase was
due to a $3.3 million reduction in interest income caused by lower interest rates on Canadian treasury securities during fiscal 2009 compared to fiscal 2008, offset by a decrease of
$2.6 million in interest expense caused by lower levels of borrowings in fiscal 2009 compared to fiscal 2008.

Income
before income taxes was $361.6 million, a 31.9% decrease compared to fiscal 2008. This change reflects the decrease in operating income described above.

Cintas'
effective tax rate was 37.4% for fiscal 2009 as compared to 36.8% for fiscal 2008 (also see Note 8 entitled Income Taxes of "Notes to Consolidated Financial Statements" for more
information on income taxes).

Net
income for fiscal 2009 of $226.4 million was a 32.5% decrease compared to fiscal 2008, and diluted earnings per share of $1.48 was a 31.2% decrease compared to fiscal 2008. These changes
reflect the decrease in operating income described above.

Rental Uniforms and Ancillary Products Operating Segment

As discussed above, Rental Uniforms and Ancillary Products operating segment revenue decreased $79.6 million, or 2.8%, and the cost of rental
uniforms and ancillary products decreased $19.4 million, or 1.2%. The operating segment's gross margin was $1,192.8 million, or 43.3% of revenue. This gross margin percent to revenue of
43.3% decreased from 44.2% in fiscal 2008. Excluding the loss on inventory valuation of $8.4 million in fiscal 2009, the gross margin percent in fiscal 2009 was 43.6%. The decrease of 60 basis
points from 44.2% in fiscal 2008 to 43.6% in fiscal 2009 is primarily due to the reduced volume in the Rental Uniforms and Ancillary Products operating segment.

Selling
and administrative expenses for the Rental Uniforms and Ancillary Products operating segment as a percent to revenue, at 27.9%, decreased 40 basis points from 28.3% in fiscal 2008. This
decrease was due to a reduction in labor costs associated with our cost reduction efforts.

Income
before income taxes decreased $80.7 million to $370.5 million for the Rental Uniforms and Ancillary Products operating segment for fiscal 2009 compared to fiscal 2008. Income
before income taxes was 13.4% of this operating segment's revenue. Excluding the loss on inventory valuation of $8.4 million and the charges of $53.0 million relating to the
restructuring activities, income before income taxes as a percent to revenue was 15.7% in fiscal 2009, which is relatively consistent with the 15.9% in fiscal 2008.

Uniform Direct Sales Operating Segment

Uniform Direct Sales operating segment revenue decreased $89.1 million for fiscal 2009, a 17.2% decrease compared to fiscal 2008. There were no
acquisitions in the Uniform Direct Sales operating segment during fiscal 2009.

Cost
of uniform direct sales decreased $26.9 million, or 7.7%, for fiscal 2009 due to decreased Uniform Direct Sales operating segment volume, partially offset by a loss on inventory valuation
of $16.1 million. The gross margin as a percent to revenue of 24.8% for fiscal 2009 decreased from 32.5% in fiscal 2008. Excluding the loss on inventory valuation of $16.1 million in
fiscal 2009, the gross margin percent in fiscal 2009 was 28.5%. The decrease from 32.5% in fiscal 2008 to 28.5% in fiscal 2009 is primarily due to the reduced volume.

Selling
and administrative expenses as a percent to revenue, at 22.9%, increased from 20.0% in fiscal 2008. This increase is due to lower volume and an increase in bad debt expense of 70 basis points.

Income
before income taxes was $3.2 million in fiscal 2009, a decrease of $61.5 million compared to fiscal 2008. This decrease is primarily due to the reduced volume in the Uniform
Direct Sales operating segment, as well as the loss on inventory valuation of $16.1 million and the charges of $4.6 million relating to the restructuring activities.

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Excluding
the loss on inventory valuation and the charges relating to the restructuring activities, income before income taxes was $24.0 million in fiscal 2009, a decrease of
$40.8 million.

First Aid, Safety and Fire Protection Services Operating Segment

First Aid, Safety and Fire Protection Services operating segment revenue decreased $25.5 million in fiscal 2009, a 6.3% decrease compared to
fiscal 2008. This operating segment's revenue decreased organically by 7.6%. The turmoil in the U.S. and Canadian economies during fiscal 2009 affected our First Aid, Safety and Fire Protection
Services operating segment revenue. Our customers in this segment reduced their spending at the onset of the financial crisis in September, 2008, resulting in decreased revenue in fiscal 2009 compared
to fiscal 2008. Acquisitions accounted for growth of 1.7%. Fiscal 2009 had one fewer workday than fiscal 2008, which resulted in a decrease in revenue of 0.4%.

Cost
of first aid, safety and fire protection services decreased $8.8 million, or 3.6%, in fiscal 2009, due to decreased First Aid, Safety and Fire Protection Services operating segment volume,
partially offset by a loss on inventory valuation of $3.0 million. Gross margin for the First Aid, Safety and Fire Protection Services operating segment is defined as revenue less cost of
goods, warehouse expenses, service expenses and training expenses. The gross margin as a percent to revenue was 38.1% for fiscal 2009. Excluding the loss on inventory valuation of $3.0 million
in fiscal 2009, the gross margin percent in fiscal 2009 was 38.9%. The decrease from 39.9% in fiscal 2008 to 38.9% in fiscal 2009 is primarily due to the reduced volume.

Selling
and administrative expenses as a percent to revenue, at 33.6%, increased from 31.0% in fiscal 2008. This increase was due to lower volume and an increase in bad debt expense of 130 basis
points.

Income
before income taxes for the First Aid, Safety and Fire Protection Services operating segment was $15.9 million in fiscal 2009 compared to $35.6 million in fiscal 2008. This
decrease of $19.7 million was primarily due to the reduced volume in First Aid, Safety and Fire Protection Services operating segment, as well as the loss on inventory valuation of
$3.0 million and the charges of $1.2 million relating to the restructuring activities. Excluding the loss on inventory valuation and the charges relating to the restructuring activities,
income before income taxes was $20.1 million, or 5.3% of revenue, in fiscal 2009 compared to 8.8% of revenue in fiscal 2008.

Document Management Services Operating Segment

Document Management Services operating segment revenue increased $30.9 million for fiscal 2009, or 17.0% over fiscal 2008. This operating
segment's internal growth for fiscal 2009 was 6.0% over fiscal 2008. The internal growth is primarily due to the sale of destruction services to new customers, offset by a decline in recycled paper
revenue. This operating segment derives revenue from the sale of shredded paper to paper recyclers. The weighted average price of standard office paper, which accounts for the majority of the recycled
paper revenue, dropped by 24.2% in fiscal 2009 compared to fiscal 2008. Acquisitions accounted for growth of 11.4%. Fiscal 2009 had one fewer workday than fiscal 2008, which resulted in a decrease in
revenue of 0.4%.

Cost
of document management services increased $22.7 million, or 27.4%, for fiscal 2009, due to increased Document Management Services volume. Gross margin for the Document Management Services
operating segment is defined as revenue less production and service costs. The gross margin as a percent to revenue was 50.6% for fiscal 2009, down from 54.6% in fiscal 2008. This decrease from fiscal
2008 is mainly due to the sharp decline in recycled paper prices compared to fiscal 2008. The decrease in the average price of standard office paper resulted in a decrease in gross margin as a percent
to revenue of 2.9%.

Selling
and administrative expenses as a percent to revenue was 41.4% compared to 40.5% in fiscal 2008. This increase is due to the sharp decline in recycled paper prices compared to fiscal 2008. The
decrease in the average price of standard office paper resulted in an increase in selling and administrative expense as a percent to revenue of 2.4%.

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Income
before income taxes for the Document Management Services operating segment was $19.4 million, a decrease of $6.4 million compared to fiscal 2008. Income before income taxes was
9.1% of the operating segment's revenue compared to 14.1% in fiscal 2008. The decrease in the average price of standard paper resulted in a decrease in income before income taxes as a percent to
revenue of 14.5%.

Liquidity and Capital Resources

At May 31, 2010, Cintas had $566.1 million in cash, cash equivalents and marketable securities, representing an increase
of $316.0 million from May 31, 2009. This increase is attributable to the improvement in net working capital and lower use of cash for investing activities including capital
expenditures. Net working capital (defined as current assets less current liabilities) increased by $171.9 million at May 31, 2010 compared to May 31, 2009. Cash used for
financing activities decreased by $177.8 million in fiscal 2010 compared to fiscal 2009 due to a reduction in repayment of debt. As a result of the cash generated in fiscal 2010, we did not
have any commercial paper outstanding as of May 31, 2010, under our commercial paper program discussed above.

Net
cash provided by operating activities was $561.6 million in fiscal 2010 as compared to $523.5 million generated in fiscal 2009. This $38.1 million increase is primarily a
result of increases in working capital, offset by lower net income. Significant uses of cash in fiscal 2010 were capital expenditures of $111.1 million, dividends of $74.0 million and
acquisitions of businesses, net of cash acquired, of $50.4 million. Cash, cash equivalents and marketable securities will be used to finance future acquisitions and capital expenditures.

Marketable
securities consist primarily of fixed income securities. Cintas believes that its investment policy pertaining to marketable securities is conservative. The criterion used in making
investment decisions is the preservation of principal, while earning an attractive yield.

Accounts
receivable increased $8.6 million primarily due to higher fourth quarter revenue in fiscal 2010 compared to fiscal 2009. The average collection period in fiscal 2010 of 42 days
remained comparable with fiscal 2009.

Inventories
and uniforms and other rental items in service decreased $36.2 million, or 6.7%, due to an overall reduction in inventory levels in response to customer demand driven by the current
economic environment.

Net
working capital increased $171.9 million to $1,141.3 million in fiscal 2010, primarily due to the increased cash balances discussed above offset by reductions in inventory levels.

Net
property and equipment decreased $20.1 million in fiscal 2010 versus fiscal 2009 due to normal ongoing property and equipment activity and a reduction in capital expenditures of
$49.0 million. Capital expenditures for fiscal 2010 totaled $111.1 million, including $68.2 million for the Rental Uniforms and Ancillary Products operating segment and
$27.9 million for the Document Management Services operating segment, while depreciation expense totaled $152.1 million. During fiscal 2010, Cintas completed construction of one new
uniform rental facility.

Long-term
debt totaled $786.1 million at May 31, 2010. This amount includes $225.0 million of 10-year senior notes at a rate of 6.0% issued in fiscal 2002,
$250.0 million of 30-year senior notes issued in fiscal 2007 at a rate of 6.15% and $300.0 million of 10-year senior notes issued in fiscal 2008 at a rate of
6.125%. Cintas has earned credit ratings on these notes of "A" from Standard & Poor's and "A2" from Moody's. Cintas utilizes a $600.0 million commercial paper program, on which it has
earned credit ratings of "A-1" from Standard & Poor's and "Prime-1" from Moody's. We believe these ratings reflect our commitment to conservative financial policies,
strong financial management and a disciplined integration strategy for acquisitions. The commercial paper program is fully supported by a long-term credit facility that matures in fiscal
2011. As of May 31, 2010, there were no outstanding borrowings under this program. During fiscal 2009, Cintas initiated a $7.5 million loan with PIDC Regional Center, LP for

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funding
related to a facility being built in Philadelphia. It is a 5-year note with a 2.75% interest rate. Cintas' total debt to capitalization ratio has decreased from 24.9% at
May 31, 2009, to 23.7% at May 31, 2010.

Cintas
has certain covenants related to debt agreements. These covenants limit Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or
sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to capitalization and interest coverage ratios. Cross default provisions exist between
certain debt instruments. Cintas is in compliance with all of the significant debt covenants for all periods presented. If a default of a significant covenant were to occur, the default could result
in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital.

During
fiscal 2010, Cintas paid dividends of $74.0 million, or $0.48 per share. On a per share basis, this dividend is an increase of 2.1% over the dividend paid in fiscal 2009. This marks the
27th consecutive year that Cintas has increased its annual dividend, every year since going public in 1983.

On
May 2, 2005, Cintas announced that the Board of Directors authorized a $500.0 million share buyback program at market prices. In July 2006, Cintas announced that the Board of
Directors approved the expansion
of its share buyback program by an additional $500.0 million. During fiscal 2010, Cintas did not make any common stock repurchases under the share buyback program. From the inception of the
share buyback program through July 30, 2010, Cintas has purchased 20.3 million shares of Cintas' common stock at an average price of $39.31 per share for a total purchase price of
approximately $798 million. The Board of Directors did not specify an expiration date for this program.

During
fiscal 2010, Cintas purchased approximately 43,000 shares of Cintas' common stock in trade for employee payroll taxes due on restricted stock options that vested during the fiscal year. These
shares were purchased at an average price of $22.71 per share for a total purchase price of approximately $1 million.

Following
is information regarding Cintas' long-term contractual obligations and other commitments outstanding as of May 31, 2010:

Long-Term Contractual Obligations

(In thousands)


Payments Due by PeriodTotal


One year
or less


Two to
three years


Four to
five years


After five
yearsLong-term debt (1)

$
786,053

$
609

$
226,278

$
8,690

$
550,476Operating leases (2)


89,041


27,766


37,348


15,472


8,455Interest payments (3)


611,555


49,520


85,382


43,918


432,735Interest swap agreements














Unconditional purchase obligations














Total long-term contractual cash obligations

$
1,486,649

$
77,895

$
349,008

$
68,080

$
991,666


Cintas also makes payments to defined contribution plans. The amounts of contributions made to the defined contribution plans are made at the discretion of Cintas. Future contributions
are expected to increase approximately 3% to 5% annually. Based on that increase, payments due in one year or less would be $21,393, two to three years would be $46,049 and four to five years would be
$50,769. Payments for years thereafter are expected to continue increasing by approximately 5% each year.

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Other Commitments

(In thousands)


Amount of Commitment Expiration per PeriodTotal


One year
or less


Two to
three years


Four to
five years


After five
yearsLines of credit (1)

$
504,122

$
504,122

$


$


$
Standby letters of credit (2)


95,878


95,878








Guarantees














Standby repurchase obligations














Other commercial commitments














Total other commitments

$
600,000

$
600,000

$


$


$



Inflation and Changing Prices

Changes in wages, benefits and energy costs have the potential to materially impact Cintas' financial results. Medical benefit costs
increased as a percent to revenue due to increased utilization and rising healthcare industry costs. Medical benefits were 4.0% of total revenue in fiscal 2010 and 3.5% of total revenue in fiscal
2009. Management believes inflation has not had a material impact on Cintas' financial condition or a negative impact on results of operation.

Litigation and Other Contingencies

Cintas is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury,
customer contract, environmental and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of business actions
will not have a material adverse effect on the financial position or results of operation of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business. Please
refer to "Part I, Item 3. Legal Proceedings" and Note 13 entitled Litigation and Other Contingencies of "Part II, Item 8. Notes to Consolidated Financial Statements"
for a detailed discussion of certain specific litigation.

New Accounting Standards

The Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Codification (ASC) effective for financial statements
issued for interim and annual periods ending after September 30, 2009. The ASC is an aggregation of previously issued authoritative GAAP in one comprehensive set of guidance organized by
subject area. In accordance with the ASC, references to previously issued accounting standards have been removed. Subsequent revisions to GAAP will be incorporated into the ASC through Accounting
Standards Updates (ASU). The following is a list of recent pronouncements issued by the FASB impacting Cintas.

Effective
June 1, 2009, Cintas adopted fair value measurements guidance for all nonfinancial assets and nonfinancial liabilities recognized or disclosed at fair value on a nonrecurring basis.
The guidance defines fair value, establishes guidance for measuring fair value and expands disclosures regarding fair value measurements. The

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adoption
did not have a material impact on our consolidated financial statements. See Note 3 entitled Fair Value Measurements of "Notes to Consolidated Financial Statements" for additional
information.

Effective
June 1, 2009, Cintas adopted new guidance on business combinations, in which an entity is required to recognize assets acquired, liabilities assumed, contractual contingencies and
contingent consideration at fair value on the acquisition date. It further requires that acquisition-related costs are recognized separately from the acquisition and expensed as incurred,
restructuring costs generally are expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties
after the measurement period impact income tax expense. This adoption did not have a material impact on Cintas' results of operations or financial condition. Any future effects will depend upon the
terms and size of future acquisitions.

Effective
June 1, 2009, Cintas adopted new guidance for determining whether instruments granted in share-based payment transactions are participating securities. This guidance provides that
unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether
paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method of determining earnings per share. The adoption
did not have a material impact on basic or diluted earnings per share. Cintas' adoption is more fully described in Note 11 entitled Earnings per Share of "Notes to Consolidated Financial
Statements."

Effective
June 1, 2009, Cintas adopted new guidance on subsequent events. The objective of this guidance is to establish general standards of accounting for and disclosure of events that occur
after the consolidated balance sheet date but before the consolidated financial statements are issued or are available to be issued. This adoption did not have a material impact on Cintas' results of
operations or financial condition.

Critical Accounting Policies

The preparation of Cintas' consolidated financial statements in conformity with U.S. GAAP requires management to make estimates
and judgments that have a significant effect on the amounts reported in the consolidated financial statements and accompanying notes. These critical accounting policies should be read in conjunction
with Note 1 entitled Significant Accounting Policies of "Notes to Consolidated Financial Statements." Significant changes, estimates or assumptions related to any of the following critical
accounting policies could possibly have a material impact on the consolidated financial statements.

Revenue recognition

Rental revenue, which is recorded in the Rental Uniforms and Ancillary Products operating segment, is recognized when services are
performed. Other services revenue, which is recorded in the Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services operating segments, is recognized when
either services are performed or when products are shipped and the title and risks of ownership pass to the customer.

Allowance for doubtful accounts

Cintas establishes an allowance for doubtful accounts. This allowance includes an estimate based on historical rates of collectability
and allowances for specific accounts identified as uncollectible. The allowance that is an estimate based on historical rates of collectability is recorded for overdue amounts, beginning with a
nominal percentage and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Rental Uniforms and Ancillary Products operating segment
and the three other operating segments because of differences in customers served and the nature of each operating segment.

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Inventories

Inventories are valued at the lower of cost (first-in, first-out) or market. Cintas applies a commonly
accepted practice of using inventory turns to apply variances between actual and standard costs to the inventory balances. The judgments and estimates used to calculate inventory turns will have an
impact on the valuation of inventories at the lower of cost or market. An inventory obsolescence reserve is determined by specific identification, as well as an estimate based on historical rates of
obsolescence.

Uniforms and other rental items in service

Uniforms and other rental items in service are valued at cost less amortization, calculated using the straight-line
method. Uniforms in service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items including shop towels, mats, cleanroom
garments, flame resistant clothing, linens and restroom dispensers are amortized over their useful lives which range from 8 to 48 months. The amortization rates used are based on industry
experience,
Cintas' specific experience and wear tests performed by Cintas. These factors are critical to determining the amount of in service inventory that is presented in the consolidated financial statements.

Property and equipment

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which is
typically 30 to 40 years for buildings, 5 to 20 years for building improvements, 3 to 10 years for equipment and 2 to 15 years for leasehold improvements. When events or
circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated undiscounted future cash flows are compared to the carrying amount of the assets.
If the estimated undiscounted future cash flows are less than the carrying amount of the assets, an impairment loss is recorded based on the excess of the carrying amount of the assets over their
respective fair values. Fair value is generally determined by discounted cash flows or based on prices of similar assets, as appropriate. Long-lived assets that are held for sale are
reported at the lower of the carrying amount or the fair value, less estimated costs to sell.

Goodwill and impairment

Goodwill, obtained through acquisitions of businesses, is valued at cost less any impairment. Cintas completes an annual impairment
test which includes the determination of the fair value of its reporting units. This test includes comparisons to current market values, where available, and discounted cash flow analyses. Significant
assumptions include growth rates based on historical trends and margin improvement leveraged from such growth. The methodology used is consistent with prior years. Based on the results of the
impairment tests, Cintas has not recognized an impairment of goodwill for the fiscal years ended May 31, 2010, 2009 or 2008.

Service contracts and other assets

Service contracts and other assets, which consist primarily of noncompete and consulting agreements obtained through acquisitions of
businesses, are amortized by use of the straight line method over the estimated lives of the agreements, which are generally 5 to 10 years. Certain noncompete agreements, as well as all service
contracts, require that a valuation be determined using a discounted cash
flow model. The assumptions and judgments used in these models involve estimates of cash flows and discount rates, among other factors. Because of the assumptions used to value these intangible
assets, actual results over time could vary from original estimates. Impairment of service contracts and other assets is accomplished through specific identification. No impairment has been recognized
by Cintas for the fiscal years ended May 31, 2010, 2009 or 2008.

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Stock-based compensation

Compensation expense is recognized for all share-based payments to employees, including stock options, in the consolidated statements
of income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Measured compensation
cost, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award. See Note 12 entitled Stock-Based Compensation
of "Notes to Consolidated Financial Statements" for further information.

Litigation and environmental matters

Cintas is subject to legal proceedings and claims related to environmental matters arising from the ordinary course of business.
U.S. GAAP requires that a liability for contingencies be recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably estimated. Significant
judgment is required to determine the existence of a liability, as well as the amount to be recorded. While a significant change in assumptions and judgments could have a material impact on the
amounts recorded for contingent liabilities, Cintas does not believe that they will result in a material adverse effect on the consolidated financial statements.

A
detailed discussion of litigation matters is discussed in Note 13 entitled Litigation and Other Contingencies of "Notes to Consolidated Financial Statements."

Income taxes

Deferred tax assets and liabilities are determined by the differences between the consolidated financial statement carrying amounts
and the tax basis of assets and liabilities. See Note 8 entitled Income Taxes of "Notes to Consolidated Financial Statements" for the types of items that give rise to significant deferred
income tax assets and liabilities. Deferred income taxes are classified as assets or liabilities based on the classification of the related asset or liability for financial reporting purposes.
Deferred income taxes that are not related to an asset or liability for financial reporting are classified according to the expected reversal date. Cintas regularly reviews deferred tax assets for
recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. As a result of this review, Cintas has not established a valuation
allowance against the deferred tax assets.

Cintas
is periodically reviewed by domestic and foreign tax authorities regarding the amount of taxes due. These reviews include questions regarding the timing and amount of deductions and the
allocation of income among various tax jurisdictions. In evaluating the exposure associated with various filing positions, Cintas records reserves as deemed appropriate. Based on Cintas' evaluation of
current tax positions, Cintas believes its accruals are appropriate.

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

Cintas manages interest rate risk by using a combination of variable and fixed rate debt and investing in marketable securities.
Earnings are affected by changes in short-term interest rates due to investments in marketable securities and money market accounts and periodic issuances of commercial paper. If
short-term rates changed by one-half percent (or 50 basis points), Cintas' income before income taxes would change by approximately $1.5 million. This estimated exposure
considers the effects on investments and the change in the cost of variable rate debt. This analysis does not consider the effects of a change in economic activity or a change in Cintas' capital
structure.

Through
its foreign operations, Cintas is exposed to foreign currency risk. Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from
foreign denominated revenue

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and
profit translated into U.S. dollars. Foreign denominated revenue and profit represents less than 10% of Cintas' consolidated revenue and profit. Cintas periodically uses foreign currency hedges
such as average rate options and forward contracts to mitigate the risk of foreign currency exchange rate movements resulting from foreign currency revenue and from international cash flows. The
primary foreign currency to which Cintas is exposed is the Canadian dollar.

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Item 8.  Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Audited Consolidated Financial Statements for the Fiscal Years Ended May 31, 2010, 2009 and 2008



Management's Report on Internal Control over Financial Reporting

32Reports of Ernst & Young LLP, Independent Registered Public Accounting
Firm

33Consolidated Statements of Income

35Consolidated Balance Sheets

36Consolidated Statements of Shareholders' Equity

37Consolidated Statements of Cash Flows

38Notes to Consolidated Financial Statements

39


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Management's Report on  Internal Control over Financial Reporting

To
the Shareholders of Cintas Corporation:

Our
management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15(d)-15(f) under the
Securities Exchange Act of 1934) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even an
effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.

With
the supervision of our Chief Executive Officer and our Chief Financial Officer, management assessed our internal control over financial reporting as of May 31, 2010. Management based its
assessment on criteria established inInternal Control  Integrated Frameworkissued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). Management's assessment included evaluation of such
elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies and our overall control environment. This assessment is supported by
testing and monitoring performed by our internal audit function.

Based
on our assessment, management has concluded that our internal control over financial reporting was effective as of May 31, 2010, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States.

We
reviewed the results of management's assessment with the Audit Committee of our Board of Directors. Additionally, our independent registered public accounting firm, Ernst & Young LLP,
independently assessed the effectiveness of Cintas Corporation's internal control over financial reporting. Ernst & Young LLP has issued an attestation report, which is included in this
Annual Report.

/s/  Scott D. Farmer
      Scott D. Farmer
      Chief Executive Officer/s/  William C. Gale
      William C. Gale
      Senior Vice President and Chief Financial Officer


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Report of Independent Registered Public Accounting Firm

To
the Board of Directors and Shareholders of Cintas Corporation:

We
have audited Cintas Corporation's internal control over financial reporting as of May 31, 2010, based on criteria established inInternal Control 
Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Cintas Corporation's management is responsible for
maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of the company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect
on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, Cintas Corporation maintained, in all material respects, effective internal control over financial reporting as of May 31, 2010, based on the COSO criteria.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Cintas Corporation as of May 31, 2010
and 2009, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended May 31, 2010, of Cintas Corporation, and our
report dated July 30, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLPCincinnati, Ohio
July 30, 2010


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Report of Independent Registered Public Accounting Firm





To
the Board of Directors and Shareholders of Cintas Corporation:

We
have audited the accompanying consolidated balance sheets of Cintas Corporation as of May 31, 2010 and 2009, and the related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended May 31, 2010. Our audits also included the consolidated financial statement schedule listed in the Index at Item 15(a). These
consolidated financial statements and schedule are the responsibility of Cintas Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements and
schedule based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cintas Corporation at May 31, 2010 and 2009, and the
consolidated results of its operations and its cash flows for each of the three years in the period ended May 31, 2010, in conformity with U.S. generally accepted accounting principles. Also,
in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set
forth therein.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cintas Corporation's internal control over financial reporting as of
May 31, 2010, based on criteria established inInternal Control  Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission, and our report dated July 30, 2010, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP


Cincinnati, Ohio
July 30, 2010

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Table of Contents



Consolidated
Statements of IncomeFiscal Years Ended May 31,(In thousands except per share data)


2010


2009


2008Revenue:Rental uniforms and ancillary products

$
2,569,357

$
2,755,015

$
2,834,568Other services


977,982


1,019,670


1,103,3323,547,339


3,774,685


3,937,900Costs and expenses:Cost of rental uniforms and ancillary products


1,449,576


1,562,230


1,581,618Cost of other services


599,946


661,584


674,682Selling and administrative expenses


1,086,359


1,082,709


1,104,145Legal settlements, net of insurance proceeds


23,529





Restructuring charges


(2,880
)

10,209


Impairment of long-lived assets





48,888


Operating income


390,809


409,065


577,455Interest income


(1,695
)

(2,764
)

(6,072
)Interest expense


48,612


50,236


52,823Income before income taxes


343,892


361,593


530,704Income taxes


128,272


135,236


195,299Net income

$
215,620

$
226,357

$
335,405Basic earnings per share

$
1.40

$
1.48

$
2.15Diluted earnings per share

$
1.40

$
1.48

$
2.15Dividends declared and paid per share

$
0.48

$
0.47

$
0.46


See accompanying notes.

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Table of Contents



Consolidated
Balance SheetsAs of May 31,(In thousands except share data)


2010


2009AssetsCurrent assets:Cash and cash equivalents

$
411,281

$
129,745Marketable securities


154,806


120,393Accounts receivable, principally trade, less allowance of $14,297 and $19,532, respectively


366,301


357,678Inventories, net


169,484


202,351Uniforms and other rental items in service


332,106


335,447Income taxes, current


15,691


25,512Deferred tax asset


52,415


66,368Prepaid expenses


13,423


17,035Assets held for sale


9,437


15,744Total current assets


1,524,944


1,270,273Property and equipment, at cost, net


894,522


914,627Goodwill


1,356,925


1,331,388Service contracts, net


103,445


124,330Other assets, net


89,900


80,333$
3,969,736

$
3,720,951Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable

$
71,747

$
69,965Accrued compensation and related liabilities


66,924


48,414Accrued liabilities


244,402


181,892Long-term debt due within one year


609


598Total current liabilities


383,682


300,869Long-term liabilities:Long-term debt due after one year


785,444


786,058Deferred income taxes


150,560


149,032Accrued liabilities


116,021


117,583Total long-term liabilities


1,052,025


1,052,673Shareholders' equity:Preferred stock, no par value:100,000 shares authorized, none outstanding





Common stock, no par value:425,000,000 shares authorized2010:  173,207,493 shares issued and
 152,869,848 shares outstanding2009:  173,085,926 shares issued and
 152,790,170 shares outstanding


132,058


129,215Paid-in capital


84,616


72,364Retained earnings


3,080,079


2,938,419Treasury stock:2010: 20,337,645 shares2009: 20,295,756 shares


(798,857
)

(797,888
)Other accumulated comprehensive income (loss):Foreign currency translation


42,870


33,505Unrealized loss on derivatives


(6,997
)

(8,207
)Other


287


Unrealized (loss) gain on available-for-sale securities


(27
)

1Total shareholders' equity


2,534,029


2,367,409$
3,969,736

$
3,720,951


See accompanying notes.

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Table of Contents

Consolidated
Statements of Shareholders' Equity

Common Stock


Paid-In


Retained


Other
Accumulated Comprehensive

Treasury Stock


Total
Shareholders'(In thousands)


Shares


Amount


Capital


Earnings


Income (Loss)


Shares


Amount


EquityBalance at June 1, 2007


172,874

$
120,811

$
56,909

$
2,533,459

$
37,121


(14,197
)
$
(580,562
)
$
2,167,738Net income











335,405











335,405Equity adjustment for foreign currency translation














19,391








19,391Change in fair value of derivatives, net of $2,924 of tax














(4,915
)







(4,915
)Amortization of interest rate lock agreements














521








521Change in fair value of available-for-sale securities, net of $98 of tax














162








162Comprehensive income, net of tax























350,564FIN 48 adjustment











(13,731
)










(13,731
)Dividends











(70,831
)










(70,831
)Stock-based compensation








7,456














7,456Stock options exercised, net of shares surrendered


209


8,371


(3,957
)













4,414Repurchase of common stock

















(5,195
)

(191,479
)

(191,479
)Balance at May 31, 2008


173,083


129,182


60,408


2,784,302


52,280


(19,392
)

(772,041
)

2,254,131Net income











226,357











226,357Equity adjustment for foreign currency translation














(27,701
)







(27,701
)Change in fair value of derivatives, net of $94 of tax














(159
)







(159
)Amortization of interest rate lock agreements














767








767Change in fair value of available-for-sale securities, net of $50 of tax














112








112Comprehensive income, net of tax























199,376Dividends











(72,207
)










(72,207
)Stock-based compensation








11,953














11,953Stock options exercised, net of shares surrendered


3




















Other





33


3


(33
)










3Repurchase of common stock

















(904
)

(25,847
)

(25,847
)Balance at May 31, 2009


173,086


129,215


72,364


2,938,419


25,299


(20,296
)

(797,888
)

2,367,409Net income











215,620











215,620Equity adjustment for foreign currency translation














9,365








9,365Change in fair value of derivatives, net of $260 of tax














443








443Amortization of interest rate lock agreements














767








767Change in fair value of available-for-sale securities, net of ($14) of tax benefit














(28
)







(28
)Comprehensive income, net of tax























226,167Dividends











(73,960
)










(73,960
)Stock-based compensation








15,349














15,349Vesting of stock-based compensation awards


121


2,843


(2,843
)













Other








(254
)




287








33Repurchase of common stock

















(42
)

(969
)

(969
)Balance at May 31, 2010


173,207

$
132,058

$
84,616

$
3,080,079

$
36,133


(20,338
)
$
(798,857
)
$
2,534,029


See accompanying notes.

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Consolidated
Statements of Cash FlowsFiscal Years Ended May 31,(In thousands)


2010


2009


2008Cash flows from operating activities:Net income

$
215,620

$
226,357

$
335,405Adjustments to reconcile net income to net cash provided by operating activities:Depreciation


152,059


157,572


148,566Amortization of deferred charges


41,082


42,534


43,337Impairment of long-lived assets





48,888


Stock-based compensation


15,349


11,953


7,456Deferred income taxes


13,295


(1,174
)

1,663Change in current assets and liabilities, net of acquisitions of businesses:Accounts receivable, net


1,140


71,149


(14,939
)Inventories, net


30,293


35,136


(6,100
)Uniforms and other rental items in service


4,164


29,661


(23,854
)Prepaid expenses


3,715


(4,949
)

3,830Accounts payable


8,939


(24,560
)

30,567Accrued compensation and related liabilities


18,393


(2,012
)

(12,430
)Accrued liabilities and other


47,528


(28,991
)

20,398Income taxes payable (receivable)


9,995


(38,042
)

8,841Net cash provided by operating activities


561,572


523,522


542,740Cash flows from investing activities:Capital expenditures


(111,078
)

(160,092
)

(190,333
)Proceeds from sale or redemption of marketable securities


34,712


116,433


45,791Purchase of marketable securities and investments


(81,269
)

(128,402
)

(54,498
)Acquisitions of businesses, net of cash acquired


(50,444
)

(30,909
)

(111,535
)Other


4,579


(251
)

(400
)Net cash used in investing activities


(203,500
)

(203,221
)

(310,975
)Cash flows from financing activities:Proceeds from issuance of debt





7,500


295,000Repayment of debt


(603
)

(164,649
)

(232,409
)Stock options exercised








8,371Dividends paid


(73,960
)

(72,207
)

(70,831
)Repurchase of common stock


(969
)

(25,847
)

(191,479
)Other


(977
)

855


(11,356
)Net cash used in financing activities


(76,509
)

(254,348
)

(202,704
)Effect of exchange rate changes on cash and cash equivalents


(27
)

(2,432
)

1,803Net increase in cash and cash equivalents


281,536


63,521


30,864Cash and cash equivalents at beginning of year


129,745


66,224


35,360Cash and cash equivalents at end of year

$
411,281

$
129,745

$
66,224


See accompanying notes.

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Notes to Consolidated Financial Statements(Amounts in thousands except per share and share data)

1.  Significant Accounting Policies

Business description.Cintas Corporation (Cintas) provides highly specialized products and services to businesses of all types primarily throughout North America
and Latin America, Europe and Asia. Cintas is North America's leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business
services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid, safety and fire protection products and services, document management services
and branded promotional products. Our products and services are designed to enhance our customers' images and to provide additional safety and protection in the workplace.

Cintas
classifies its businesses into four operating segments. The Rental Uniforms and Ancillary Products operating segment consists of the rental and servicing of uniforms and other garments
including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning
services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms and related items and branded promotional products. The
First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The Document Management Services operating segment consists of
document destruction, document imaging and document retention services.

Principles of consolidation.The consolidated financial statements include the accounts of Cintas controlled majority-owned subsidiaries and any entities over which
Cintas has control (collectively, Cintas). Intercompany balances and transactions have been eliminated as appropriate.

Use of estimates.The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management
to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue recognition.Rental revenue, which is recorded in the Rental Uniforms and Ancillary Products operating segment, is recognized when services are performed.
Other Services revenue, which is recorded in the Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services operating segments, is recognized when either
services are performed or when products are shipped and the title and risks of ownership pass to the customer.

Cost of rental uniforms and ancillary products.Cost of rental uniforms and ancillary products consists primarily of production expenses, delivery expenses and the
amortization of in service inventory, including uniforms, mats, mops, shop towels and other ancillary items. The Rental Uniforms and Ancillary Products operating segment inbound freight charges,
purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution are included in the cost of rental uniforms and ancillary products.

Cost of other services.Cost of other services consists primarily of cost of goods sold (predominantly uniforms and first aid products), delivery expenses and
distribution expenses. Cost of other services includes inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs and other costs of distribution.

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Selling and administrative expenses.Selling and administrative expenses consist primarily of sales labor and commissions, management and administrative labor,
payroll taxes, medical expense, insurance expense, legal and professional costs and amortization of finite-lived intangible assets.

Cash and cash equivalents.Cintas considers all highly liquid investments with a maturity of three months or less, at date of purchase, to be cash equivalents.

Marketable securities.Marketable securities are comprised of fixed income securities and are classified as available-for-sale.

Accounts receivable.Accounts receivable is comprised of amounts owed through product shipments and services provided and is presented net of an allowance for
doubtful accounts. The allowance is an estimate based on historical rates of collectability and allowances for specific accounts identified as uncollectible. The allowance that is an estimate based on
historical rates of collectability is recorded for overdue amounts, beginning with a nominal percentage and increasing substantially as the account ages. The amount provided as the account ages will
differ slightly between the Rental Uniforms and Ancillary Products operating segment and the three other operating segments because of differences in customers served and the nature of each operating
segment. When an account is considered uncollectible, it is written off against the allowance.

Inventories.Inventories are valued at the lower of cost (first-in, first-out) or market. Inventory is comprised of the following amounts:

2010


2009Raw materials

$
13,058

$
12,498Work in process


11,522


10,773Finished goods


144,904


179,080$
169,484

$
202,351


Inventories are recorded net of reserves for obsolete inventory of $32,466 and $48,353 as of May 31, 2010 and 2009, respectively.

Uniforms and other rental items in service.These items are valued at cost less amortization, calculated using the straight-line method. Uniforms in
service (other than cleanroom and flame resistant clothing) are amortized over their useful life of 18 months. Other rental items, including shop towels, mats, mops, cleanroom garments, flame
resistant clothing, linens and restroom dispensers, are amortized over their useful lives which range from 8 to 48 months.

Property and equipment.Property and equipment is stated at cost, less accumulated depreciation.
Depreciation is calculated using the straight-line method primarily over the following estimated useful lives, in years:

Buildings


30 to 40Building improvements


5 to 20Equipment


3 to 10Leasehold improvements


2 to 15


Long-lived assets.When events or circumstances indicate that the carrying amount of long-lived assets may not be recoverable, the estimated
undiscounted future cash flows are compared to the carrying amount of the assets. If the estimated undiscounted future cash flows are less than the carrying amount of the assets, an impairment loss is

40

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Table of Contents

recorded
based on the excess of the carrying amount of the assets over their respective fair values. Fair value is generally determined by discounted cash flows or based on prices of similar assets,
as appropriate. Long-lived assets that are held for sale are reported at the lower of the carrying amount or the fair value, less estimated costs to sell.

Goodwill.Goodwill is separately disclosed from other intangible assets on the consolidated balance sheet and not amortized. Cintas completes an annual goodwill
impairment test which includes the determination of the fair value of its reporting units. The methodology used is consistent with prior years. Based on the results of the annual impairment test,
Cintas was not required to recognize an impairment of goodwill for the fiscal years ended May 31, 2010, 2009 or 2008. Cintas will continue to perform future impairment tests as of
March 1 in future years or when indicators of impairment are noted.

Service contracts and other assets.Service contracts and other assets, which consist primarily of noncompete and consulting agreements obtained through
acquisitions of businesses, are amortized by use of the
straight-line method over the estimated lives of the agreements, which are generally 5 to 10 years.

Accrued liabilities.Current accrued liabilities are recorded when it is probable that a liability has occurred and the amount of the liability can be reasonably
estimated. Current accrued liabilities include the following amounts:

2010


2009General insurance liabilities

$
50,480

$
48,090Employee benefit related liabilities


47,754


47,072Legal settlements


30,448


Taxes and related liabilities


22,403


8,583Accrued interest


20,762


20,742Other


72,555


57,405$
244,402

$
181,892


Long-term accrued liabilities consists primarily of reserves associated with unrecognized tax benefits, which are described in more detail in Note 8 entitled Income
Taxes, and retirement obligations.

Stock-based compensation.Compensation expense is recognized for all share-based payments to employees, including stock options, in the consolidated statements of
income based on the fair value of the awards that are granted. The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. Measured compensation
cost, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period of the related share-based compensation award.

Derivatives and hedging activities.Cintas formally documents all relationships between hedging instruments and hedged items, as well as its risk management
objective and strategy for undertaking various hedge transactions. Derivatives are recorded at fair value on the consolidated balance sheet, and gains and losses are recorded as adjustments to
earnings or other comprehensive income, as appropriate.

Other accounting pronouncements.The Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Codification (ASC) effective for financial
statements issued for interim and annual periods ending after September 30, 2009. The ASC is an aggregation of previously issued authoritative GAAP in one comprehensive set of guidance
organized by subject area. In accordance with the ASC, references to previously issued accounting standards have been removed. Subsequent revisions to GAAP will be incorporated into the ASC through
Accounting Standards Updates (ASU). The following is a list of recent pronouncements issued by the FASB impacting Cintas.

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Effective
June 1, 2009, Cintas adopted fair value measurements guidance for all nonfinancial assets and nonfinancial liabilities recognized or disclosed at fair value on a nonrecurring basis.
The guidance defines fair
value, establishes guidance for measuring fair value and expands disclosures regarding fair value measurements. The adoption did not have a material impact on our consolidated financial statements.

Effective
June 1, 2009, Cintas adopted new guidance on business combinations, in which an entity is required to recognize assets acquired, liabilities assumed, contractual contingencies and
contingent consideration at fair value on the acquisition date. It further requires that acquisition-related costs are recognized separately from the acquisition and expensed as incurred,
restructuring costs generally are expensed in periods subsequent to the acquisition date, and changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties
after the measurement period impact income tax expense. This adoption did not have a material impact on Cintas' results of operations or financial condition. Any future effects will depend upon the
terms and size of future acquisitions.

Effective
June 1, 2009, Cintas adopted new guidance for determining whether instruments granted in share-based payment transactions are participating securities. This guidance provides that
unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the
computation of earnings per share pursuant to the two-class method of determining earnings per share. The adoption did not have a material impact on basic or diluted earnings per share.

Effective
June 1, 2009, Cintas adopted new guidance on subsequent events. The objective of this guidance is to establish general standards of accounting for and disclosure of events that occur
after the consolidated balance sheet date but before the consolidated financial statements are issued or are available to be issued. This adoption did not have a material impact on Cintas' results of
operations or financial condition.

2.  Restructuring and Related Activity

Due to the declining economic conditions which negatively impacted the North American economy and Cintas' businesses, during the
fourth quarter of fiscal 2009, management initiated certain restructuring activities to eliminate excess capacity and reduce our cost structure. These activities included closing or converting to
branches 16 of our rental processing plants and reducing our workforce by 1,200 employees. We have substantially completed these restructuring activities as of May 31, 2010.

During
the fourth quarter of fiscal 2009, Cintas recorded charges of $48,888 in long-lived asset impairment costs, $7,937 in employee termination costs and $2,272 in other exit costs for a
total of $59,097 incurred as a result of this restructuring. These charges by operating segment are detailed in Note 14 entitled Operating Segment Information.

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A
progression of our restructuring liability balance, primarily recorded in accrued compensation and related liabilities is as follows:

Employee
Termination
Costs


Other Exit
Costs


TotalBalance as of June 1, 2009

$
5,915

$
2,272

$
8,187Cash paid  fiscal 2010


(3,785
)

(297
)

(4,082
)Change in estimate


(1,380
)

(1,500
)

(2,880
)Balance as of May 31, 2010

$
750

$
475

$
1,225


The change in estimate represents the difference between severance and other exit costs estimated based on the information available in fiscal 2009 and severance and other exit costs
actually paid in fiscal 2010.

The
fiscal 2009 charge of $48,888 in long-lived asset impairment costs included $25,849 in land and buildings of which $10,930 related to assets held for sale, $18,221 in equipment and
$4,818 in long-lived other assets. The fair value was determined primarily by using market quoted prices and other prices quoted for similar assets and discounted cash flow models.

Certain
assets totaling $9,437 and $15,744 are categorized at May 31, 2010 and 2009, respectively, as assets held for sale at the lower of their carrying value or fair value less cost to sell.
These assets are in the Rental
Uniform and Ancillary Products operating segment and are comprised of $3,077 and $6,268 of land at May 31, 2010 and 2009, respectively and $6,360 and $9,476 of buildings and improvements at
May 31, 2010 and 2009, respectively.

3.  Fair Value Measurements

FASB ASC defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price)
in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. It also establishes a three-level fair value
hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three
levels of inputs used to measure fair value are as follows:

Level 1 

Quoted prices in active markets for identical assets or liabilities.Level 2 

Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets
that are not active; or other inputs that are observable or can be corroborated by observable market data.Level 3 

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies
and similar techniques that use significant unobservable inputs.


In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within
which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Cintas' assessment of the significance of a
particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

43

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All
financial instruments that are measured at fair value on a recurring basis (at least annually) have been segregated into the most appropriate level within the fair value hierarchy based on the
inputs used to determine the fair value at the consolidated balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below:

As of May 31, 2010Level 1


Level 2


Level 3


Fair ValueCash and cash equivalents

$
411,281

$


$


$
411,281Marketable securities:U.S. municipal bonds





21,954





21,954Canadian treasury securities


97,791


35,061





132,852Accounts receivable, net





450





450Total assets at fair value

$
509,072

$
57,465

$


$
566,537Current accrued liabilities

$


$
64

$


$
64Total liabilities at fair value

$


$
64

$


$
64




As of May 31, 2009Level 1


Level 2


Level 3


Fair ValueCash and cash equivalents

$
129,745

$


$


$
129,745Marketable securities:Canadian treasury securities


120,393








120,393Accounts receivable, net





78





78Total assets at fair value

$
250,138

$
78

$


$
250,216Current accrued liabilities

$


$
253

$


$
253Total liabilities at fair value

$


$
253

$


$
253


Cintas'
cash and cash equivalents and marketable securities are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market
prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. Cintas does not adjust the quoted market price for such financial instruments.

The
funds invested in Canadian marketable securities are not expected to be repatriated, but instead are expected to be invested indefinitely in foreign subsidiaries. Interest, realized gains and
losses and declines in
value determined to be other than temporary on available-for-sale securities are included in interest income or expense. The cost of the securities sold is based on the
specific identification method. The amortized cost basis of the marketable securities as of May 31, 2010 and 2009, is $154,857 and $120,403, respectively. Purchases of marketable securities
were $64,416, $122,652 and $43,750 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively. All contractual maturities are due within one year.

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Table of Contents

Accounts
receivable, net and current accrued liabilities include foreign currency average rate options. The fair value of Cintas' foreign currency average rate options are based on similar exchange
traded derivatives and are, therefore, included within Level 2 of the fair value hierarchy.

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 balance sheet date.

4.  Property and Equipment

2010


2009Land

$
101,374

$
77,210Buildings and improvements


471,592


444,683Equipment


1,178,181


1,088,809Leasehold improvements


17,176


15,269Construction in progress


88,769


93,8341,857,092


1,719,805Less: accumulated depreciation


962,570


805,178$
894,522

$
914,627


Interest expense is net of capitalized interest of $2,182, $2,259 and $1,090 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

5.  Goodwill, Service Contracts and Other Assets

Changes in the carrying amount of goodwill and service contracts for the fiscal years ended May 31, 2010 and 2009, by operating
segment, are as follows:

Goodwill


Rental
Uniforms &
Ancillary
Products


Uniform
Direct
Sales


First Aid,
Safety &
Fire
Protection


Document
Management


TotalBalance as of June 1, 2008

$
863,581

$
23,956

$
165,544

$
262,488

$
1,315,569Goodwill acquired








1,328


17,340


18,668Foreign currency translation


(1,702
)

(65
)




(1,082
)

(2,849
)Balance as of May 31, 2009

$
861,879

$
23,891

$
166,872

$
278,746

$
1,331,388Goodwill (adj.) acquired


(1,401
)




15,095


12,528


26,222Foreign currency translation


639


37





(1,361
)

(685
)Balance as of May 31, 2010

$
861,117

$
23,928

$
181,967

$
289,913

$
1,356,925


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Table of Contents



Service Contracts


Rental
Uniforms &
Ancillary
Products


Uniform
Direct
Sales


First Aid,
Safety &
Fire
Protection


Document
Management


TotalBalance as of June 1, 2008

$
84,574

$
328

$
41,944

$
25,911

$
152,757Service contracts acquired








264


4,252


4,516Service contracts amortization


(16,289
)

(289
)

(6,166
)

(7,613
)

(30,357
)Foreign currency translation


(2,388
)

(39
)




(159
)

(2,586
)Balance as of May 31, 2009

$
65,897

$


$
36,042

$
22,391

$
124,330Service contracts acquired








5,897


4,500


10,397Service contracts amortization


(18,081
)




(6,340
)

(7,545
)

(31,966
)Foreign currency translation


895








(211
)

684Balance as of May 31, 2010

$
48,711

$


$
35,599

$
19,135

$
103,445


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

As of May 31, 2010


Carrying
Amount


Accumulated
Amortization


NetService contracts

$
346,569

$
243,124

$
103,445Noncompete and consulting agreements

$
68,435

$
53,425

$
15,010Investments (1)


68,616





68,616Other


10,516


4,242


6,274Total

$
147,567

$
57,667

$
89,900




As of May 31, 2009


Carrying
Amount


Accumulated
Amortization


NetService contracts

$
335,473

$
211,143

$
124,330Noncompete and consulting agreements

$
65,683

$
44,320

$
21,363Investments (1)


51,762





51,762Other


10,675


3,467


7,208Total

$
128,120

$
47,787

$
80,333


(1)Investments
at May 31, 2010, include the cash surrender value of insurance policies of $34,294, equity method investments of $30,036 and cost
method investments of $4,286. Investments at May 31, 2009, include the cash surrender value of insurance policies of $18,006, equity method investments of $28,742 and cost method investments of
$5,014.


Amortization expense was $41,082, $42,534 and $43,337 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively. Estimated amortization
expense, excluding any future acquisitions, for each of the next five years is $37,869, $31,462, $15,398, $12,282 and $9,509, respectively.

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Table of Contents

6.  Long-Term Debt and Derivatives

2010


2009Unsecured term notes due through 2036 at an average rate of 6.07%

$
786,053

$
786,627Other





29786,053


786,656Less: amounts due within one year


609


598$
785,444

$
786,058


Letters of credit outstanding were $95,878 and $68,640 for the fiscal years ended May 31, 2010 and 2009, respectively. Maturities of long-term debt during each of
the next five years are $609, $642, $225,636, $8,187 and $503, respectively.

Interest
paid was $48,592, $49,857 and $49,707 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

Cintas
has a commercial paper program supported by a $600,000 long-term credit facility. There was no commercial paper outstanding for the fiscal years ended May 31, 2010 or 2009.

Cintas
used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2002, fiscal 2007 and fiscal 2008. The amortization of
the cash flow hedges resulted in a credit to other comprehensive income of $767, $767 and $521 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

To
hedge the exposure of movements in the foreign currency rates, Cintas uses foreign currency hedges. These hedges reduce the impact on cash flows from movements in the foreign currency exchange
rates. Examples of foreign currency hedge instruments that Cintas may use are average rate options and forward contracts. Cintas had average rate options included in accounts receivable, net of $450
and $78 for the fiscal years ended May 31, 2010 and 2009, respectively. Cintas also had average rate options included in current accrued liabilities of $64 and $253 for the fiscal years ended
May 31, 2010 and 2009, respectively. These instruments increased foreign currency exchange loss by $520 during fiscal 2010 and reduced foreign currency exchange loss by $1,095 during fiscal
2009.

Cintas
has certain covenants related to debt agreements. These covenants limit Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or
sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to capitalization and interest coverage ratios. Cross default provisions exist between
certain debt instruments. Cintas is in compliance with all of the significant debt covenants for all periods presented. If a default of a significant covenant were to occur, the default could result
in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital.

7.  Leases

Cintas conducts certain operations from leased facilities and leases certain equipment. Most leases contain renewal options for
periods from 1 to 10 years. The lease agreements provide for increases in rent expense if the options are exercised based on increases in certain price level factors or other prearranged
factors. Step rent provisions, escalation clauses, capital improvements funding and other lease concessions are taken into account in computing minimum lease payments. Minimum lease payments are
recognized on a straight-line basis over the minimum lease

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term.
Lease payments are not dependent on an existing index or rate and are not included in minimum lease payments. It is anticipated that expiring leases will be renewed or replaced.

The
minimum rental payments under noncancelable lease arrangements for each of the next five years and thereafter are $27,766, $22,017, $15,331, $9,587, $5,885 and $8,455, respectively. Rent expense
under operating leases during the fiscal years ended May 31, 2010, 2009 and 2008, was $38,046, $37,897 and $34,996, respectively.

8.  Income Taxes

Income before income taxes consist of the following components:

2010


2009


2008U.S. operations

$
315,717

$
332,863

$
476,279Foreign operations


28,175


28,730


54,425$
343,892

$
361,593

$
530,704


Income taxes consist of the following components:

2010


2009


2008Current:Federal

$
106,389

$
135,909

$
171,927State and local


12,909


18,962


17,225119,298


154,871


189,152Deferred


8,974


(19,635
)

6,147$
128,272

$
135,236

$
195,299


Reconciliation of income tax expense using the statutory rate and actual income tax expense is as follows:

2010


2009


2008Income taxes at the U.S. federal statutory rate

$
120,362

$
126,558

$
185,746State and local income taxes, net of federal benefit


8,631


9,062


12,832Other


(721
)

(384
)

(3,279
)$
128,272

$
135,236

$
195,299


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Table of Contents

The components of deferred income taxes included on the consolidated balance sheets are as follows:

2010


2009Deferred tax assets:Allowance for doubtful accounts

$
4,890

$
6,211Inventory obsolescence


12,381


17,877Insurance and contingencies


16,148


15,492Stock-based compensation


9,954


7,000Other


20,622


16,29463,995


62,874Deferred tax liabilities:In service inventory


8,416


7,743Property


81,634


76,482Intangibles


65,868


58,538State taxes and other


6,222


2,775162,140


145,538Net deferred tax liability

$
98,145

$
82,664


Income taxes paid were $103,762, $187,150 and $180,634 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

Undistributed
earnings of foreign subsidiaries were approximately $198,273, $181,556 and $184,551 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively, for which deferred taxes
have not been provided. Such earnings are considered indefinitely invested in the foreign subsidiaries. If such earnings were repatriated, additional tax expense may result. The current calculation of
such additional taxes is not practicable.

Accounting
for uncertain tax positions requires the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Companies
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of
being realized upon ultimate settlement.

As
of May 31, 2010 and May 31, 2009, there was $27,777 and $26,261, respectively, in total unrecognized tax benefits, which if recognized, would favorably impact Cintas' effective tax
rate. Cintas recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense in the consolidated statements of income, which is consistent with the recognition of
these items in prior reporting periods. The total amount accrued for interest and penalties as of May 31, 2010 and May 31, 2009, was $15,693 and $15,739, respectively. Cintas records
this tax liability in both current and long-term accrued liabilities on the consolidated balance sheets.

In
the normal course of business, Cintas provides for uncertain tax positions and the related interest, and adjusts its unrecognized tax benefits and accrued interest accordingly. Unrecognized tax
benefits related to continuing operations increased by $879 in fiscal 2010, decreased by $18,682 in fiscal 2009 and increased by $2,770 in fiscal 2008. Accrued interest decreased by $46 in fiscal
2010, decreased by $565 in fiscal 2009 and increased by $487 in fiscal 2008.

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A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at June 1, 2008

$
115,329Additions based on tax positions related to the current year


1,525Additions for tax positions of prior years


1,989Settlements


(3,120
)Statute expirations


(20,558
)Balance at May 31, 2009

$
95,165Additions based on tax positions related to the current year


1,528Additions for tax positions of prior years


3,760Settlements


(605
)Statute expirations


(3,991
)Balance at May 31, 2010

$
95,857


The majority of Cintas' operations are in North America. Cintas is required to file federal income tax returns as well as state income tax returns in a majority of the domestic states
and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final
resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of
operation in any given period.

All
U.S. federal income tax returns are closed to audit through fiscal 2006. Cintas is currently in advanced stages of various audits in certain foreign jurisdictions and certain domestic states. The
years under audit cover fiscal years back to 2000. Based on the resolution of the various audits, it is reasonably possible that the balance of unrecognized tax benefits could decrease by
approximately $15,000 for the fiscal year ended May 31, 2011.

9.  Acquisitions

The purchase price paid for each acquisition has been allocated to the fair value of the assets acquired and liabilities assumed.
During fiscal 2010, Cintas acquired three First Aid, Safety and Fire Protection Services operating segment businesses and four Document Management Services operating segment businesses. During fiscal
2009, Cintas acquired three First Aid, Safety and Fire Protection Services operating segment businesses and twelve Document Management Services operating segment businesses. The following summarizes
the aggregate purchase price for all businesses acquired:

2010


2009Fair value of tangible assets acquired

$
23,006

$
6,546Fair value of goodwill acquired


26,978


19,024Fair value of service contracts acquired


9,018


4,085Fair value of other intangibles acquired


3,828


2,288Total fair value of assets acquired


62,830


31,943Fair value of liabilities assumed and incurred


11,870


574Total cash paid for acquisitions

$
50,960

$
31,369


50

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Table of Contents

The results of operation for the acquired businesses are included in the consolidated statements of income from the dates of acquisition. The pro forma revenue, net income and earnings
per share information relating
to acquired businesses are not presented because they are not significant to Cintas.

10.  Defined Contribution Plans

Cintas' Partners' Plan (the Plan) is a non-contributory profit sharing plan and Employee Stock Ownership Plan (ESOP) for
the benefit of substantially all U.S. Cintas employees who have completed one year of service. The Plan also includes a 401(k) savings feature covering substantially all U.S. employees. The amounts of
contributions to the Plan and ESOP, as well as the matching contribution to the 401(k), are made at the discretion of Cintas. Total contributions, including Cintas' matching contributions, which
approximate cost, were $19,849, $23,400 and $28,700 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

Cintas
has a non-contributory deferred profit sharing plan (DPSP), which covers substantially all Canadian employees. In addition, a registered retirement savings plan (RRSP) is offered to
those employees. The amounts of contributions to the DPSP, as well as the matching contribution to the RRSP, are made at the discretion of Cintas. Total contributions, which approximate cost, were
$921, $1,086 and $1,500 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

Cintas
has a supplemental executive retirement plan (SERP) subject to Section 409A of the Internal Revenue Code for the benefit of certain highly compensated Cintas employees. The SERP allows
participants to defer the receipt of compensation which would otherwise become payable to them. Matching contributions are made at the discretion of Cintas. Total matching contributions were $5,014,
$5,498 and $5,915 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

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11.  Earnings per Share

Cintas adopted new guidance for determining whether instruments granted in share-based payment transactions are participating
securities on June 1, 2009, using the retrospective method. The retrospective application had no impact on the basic and diluted earnings per share for the fiscal years ended May 31,
2009 and 2008, respectively. The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas' common
shares:

2010


2009


2008Basic Earnings per ShareNet income

$
215,620

$
226,357

$
335,405Less dividends to:Common shares

$
73,377

$
71,811

$
70,692Unvested shares


583


396


139Total dividends

$
73,960

$
72,207

$
70,831Undistributed net income

$
141,660

$
154,150

$
264,574Less: net income allocated to participating unvested securities


661


427


315Net income available to common shareholders

$
140,999

$
153,723

$
264,259Basic weighted average common shares outstanding


152,858


152,942


155,678Basic earnings per share:Common shares  distributed earnings

$
0.48

$
0.47

$
0.46Common shares  undistributed earnings


0.92


1.01


1.69Total common shares

$
1.40

$
1.48

$
2.15Unvested shares  distributed earnings

$
0.48

$
0.47

$
0.46Unvested shares  undistributed earnings


0.92


1.01


1.69Total unvested shares

$
1.40

$
1.48

$
2.15


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Table of Contents



2010


2009


2008Diluted Earnings per ShareNet income

$
215,620

$
226,357

$
335,405Less dividends to:Common shares

$
73,377

$
71,811

$
70,692Unvested shares


583


396


139Total dividends

$
73,960

$
72,207

$
70,831Undistributed net income

$
141,660

$
154,150

$
264,574Less: net income allocated to participating unvested securities


661


427


315Net income available to common shareholders

$
140,999

$
153,723

$
264,259Basic weighted average common shares outstanding


152,858


152,942


155,678Effect of dilutive securities  employee stock options








Diluted weighted average common shares outstanding


152,858


152,942


155,678Diluted earnings per share:Common shares  distributed earnings

$
0.48

$
0.47

$
0.46Common shares  undistributed earnings


0.92


1.01


1.69Total common shares

$
1.40

$
1.48

$
2.15Unvested shares  distributed earnings

$
0.48

$
0.47

$
0.46Unvested shares  undistributed earnings


0.92


1.01


1.69Total unvested shares

$
1.40

$
1.48

$
2.15


For the fiscal years ended May 31, 2010, 2009 and 2008, 4,451, 5,474 and 3,060 options granted to purchase 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 shares (anti-dilutive).

12.  Stock-Based Compensation

Under the 2005 Equity Compensation Plan adopted by Cintas in fiscal 2006, Cintas may grant officers and key employees equity
compensation in the form of stock options, stock appreciation rights, restricted and unrestricted stock awards, performance awards and other stock unit awards up to an aggregate of 14,000,000 shares
of Cintas' common stock. At May 31, 2010, 10,914,768 shares of common stock are reserved for future issuance under the 2005 Equity Compensation Plan. The compensation cost was $15,349, $11,953
and $7,456 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively. The total income tax benefit recognized in the consolidated income statement for share-based compensation
arrangements was $3,912, $2,809 and $2,022 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

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Stock Options

Stock options are granted at the fair market value of the underlying common stock on the date of grant. The option terms are
determined by the Compensation Committee of the Board of Directors, but no stock option may be exercised later than 10 years after the date of the grant. The option awards generally have
10-year terms with graded vesting in years 3 through 10 based on continuous service during that period. Cintas recognizes compensation expense for these options using the
straight-line recognition method over the vesting period.

The
fair value of these options was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

2010


2009


2008Risk-free interest rate


3.9
%

4.5
%

4.5
%Dividend yield


1.3
%

1.0
%

0.8
%Expected volatility of Cintas' common stock


30.0
%

30.0
%

30.0
%Expected life of the option in years


7.5


7.5


8.5


The risk-free interest rate is based on U.S. government issues with a remaining term equal to the expected life of the stock options. The determination of expected
volatility is based on historical volatility of Cintas' common stock over the period commensurate with the expected term of stock options, as well as other relevant factors. The weighted average
expected term was determined based on the historical employee exercise behavior of the options. The weighted-average fair value of stock options granted during fiscal 2010, 2009 and 2008 was $10.16,
$10.17 and $15.89, respectively.

The
information presented in the following table relates primarily to stock options granted and outstanding under either the 2005 Equity Compensation Plan or under previously adopted plans:

Shares


Weighted
Average
Exercise
PriceOutstanding, May 31, 2007 (2,316,157 shares exercisable)


6,648,604

$
40.60Granted


1,005,200


30.99Canceled


(745,197
)

40.15Exercised


(259,839
)

24.07Outstanding, May 31, 2008 (2,041,837 shares exercisable)


6,648,768


39.85Granted


539,039


23.62Canceled


(828,383
)

36.47Exercised





Outstanding, May 31, 2009 (1,914,710 shares exercisable)


6,359,424


38.91Granted


1,070,798


28.52Canceled


(963,016
)

35.98Exercised





Outstanding, May 31, 2010 (1,838,530 shares exercisable)


6,467,206

$
37.63


There were no stock options exercised during the years ended May 31, 2010 or 2009. The total cash received from employees as a result of employee stock option exercises for the
fiscal year ended May 31, 2008, was $4,430.

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The
fair value of stock options vested was $6,808, $3,458 and $2,069 for the fiscal years ended May 31, 2010, 2009 and 2008, respectively.

The
following table summarizes the information related to stock options outstanding at May 31, 2010:

Outstanding Options


Exercisable OptionsRange of
Exercise Prices


Number
Outstanding


Average
Remaining
Option
Life


Weighted
Average
Exercise
Price


Number
Exercisable


Weighted
Average
Exercise
Price$ 20.29  $ 36.08


2,316,163


8.36

$
28.94


122,340

$
33.3036.10    41.65


1,652,693


3.98


39.99


715,590


40.7341.72    44.33


1,344,650


3.24


42.34


562,700


42.5344.43    53.19


1,153,700


3.70


45.67


437,900


47.67$ 20.29  $ 53.19


6,467,206


5.34

$
37.63


1,838,530

$
42.44


At May 31, 2010, the aggregate intrinsic value of stock options outstanding and exercisable was $971 and $23, respectively.

The
weighted-average remaining contractual term of stock options exercisable is 2.2 years.

Restricted Stock Awards

Restricted stock awards consist of Cintas' common stock which is subject to such conditions, restrictions and limitations as the
Compensation Committee of the Board of Directors determines to be appropriate. The vesting period is generally three years after the grant date. The recipient of restricted stock awards will have all
rights of a shareholder of Cintas, including the right to vote and the right to receive cash dividends, during the vesting period.

The
information presented in the following table relates to restricted stock awards granted and outstanding under the plan adopted in fiscal 2006:

Shares


Weighted
Average
Grant
PriceOutstanding, unvested grants at May 31, 2007


329,424

$
37.35Granted


240,086


30.05Canceled


(35,879
)

38.16Vested





Outstanding, unvested grants at May 31, 2008


533,631


34.01Granted


502,821


26.66Canceled


(52,583
)

32.99Vested


(2,500
)

36.08Outstanding, unvested grants at May 31, 2009


981,369


30.29Granted


597,514


24.63Canceled


(53,278
)

27.85Vested


(118,254
)

36.57Outstanding, unvested grants at May 31, 2010


1,407,351

$
27.45


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Table of Contents

The remaining unrecognized compensation cost related to unvested stock options and restricted stock at May 31, 2010, was $50,614, and the weighted-average period of time over
which this cost will be recognized is 3.1 years.

13.  Litigation and Other Contingencies

Cintas is subject to legal proceedings, insurance receipts, legal settlements and claims arising from the ordinary course of its
business, including personal injury, customer contract, environmental and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of
business actions will not have a material adverse effect on the financial position or results of operation of Cintas. Cintas is party to additional litigation not considered in the ordinary course of
business, including the litigation discussed below.

Cintas
is a defendant in a purported class action lawsuit,Mirna E. Serrano, et al. v. Cintas Corporation (Serrano), filed on May 10, 2004,
and pending in the United States District Court, Eastern District of Michigan, Southern Division. TheSerranoplaintiffs alleged that Cintas discriminated
against women in hiring into various service sales representative positions across all divisions of Cintas. On November 15, 2005, the Equal Employment Opportunity Commission (EEOC) intervened
in theSerranolawsuit. TheSerranoplaintiffs seek injunctive relief, compensatory damages, punitive
damages, attorneys' fees and other remedies. On October 27, 2008, the United States District Court in the Eastern District of Michigan granted summary judgment in favor of Cintas limiting the
scope of the putative class in theSerranolawsuit to female applicants for service sales representative positions at Cintas locations within the state of
Michigan. Consequently, all claims brought by female applicants for service sales representative positions outside of the state of Michigan were dismissed. Similarly, any claims brought by the EEOC on
behalf of similarly situated female applicants outside of the state of Michigan have also been dismissed from theSerranolawsuit. Cintas is a defendant
in another purported class action lawsuit,Blanca Nelly Avalos, et al. v. Cintas Corporation (Avalos), which was filed in the United States District
Court, Eastern District of Michigan, Southern Division. TheAvalosplaintiffs alleged that Cintas discriminated against women, African-Americans and
Hispanics in hiring into various service sales representative positions in Cintas' Rental division only throughout the United States. TheAvalosplaintiffs sought injunctive relief, compensatory damages, punitive damages, attorneys' fees and other remedies. The claims inAvalosoriginally were
brought in the lawsuit captionedRobert Ramirez, et al. v. Cintas Corporation (Ramirez), filed on January 20, 2004, in the United States District
Court, Northern District of California, San Francisco Division. On May 11, 2006, theRamirezand AvalosAfrican-American, Hispanic and female failure
to hire into service sales representative positions claims and the EEOC's intervention were
consolidated for pretrial purposes with theSerranocase and transferred to the United States District Court for the Eastern District of Michigan,
Southern Division. The consolidated case was known asMirna E. Serrano/Blanca Nelly Avalos, et al. v. Cintas Corporation (Serrano/Avalos). On
March 31, 2009, the United States District Court, Eastern District of Michigan, Southern Division entered an order denying class certification to all plaintiffs in the Serrano/Avaloslawsuits.
Following denial of class certification, the Judge permitted the individualAvalosandSerranoplaintiffs to proceed separately. In theSerranocase, all private individual claims have been
dismissed with prejudice and the EEOC is continuing to pursue individual claims on behalf of 13 claimants. On April 15, 2010, the United States District Court, Eastern Division of Michigan,
Southern Division entered an order granting summary judgment against all individual plaintiffs in theAvaloslawsuit. On May 11, 2010, Plaintiff
Tanesha Davis, on behalf of all similarly situated plaintiffs, filed a notice of appeal of the District Court's summary judgment order in the United States Court of Appeals for the Sixth Circuit. The
Appellate Court has made no determination regarding the merits of Davis' appeal.

The
litigation discussed above, if decided or settled adversely to Cintas, may, individually or in the aggregate, result in liability material to Cintas' consolidated financial condition or results of
operation and could increase costs of operations on an ongoing basis. Any estimated liability relating to these proceedings is not determinable at this

56

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Table of Contents

time.
Cintas may enter into discussions regarding settlement of these and other lawsuits, and may enter into settlement agreements if it believes such settlement is in the best interest of Cintas'
shareholders.

Cintas
is a defendant in a purported class action lawsuit,Paul Veliz, et al. v. Cintas Corporation (Veliz), filed on March 19, 2003, in the United
States District Court, Northern District of California, Oakland Division, alleging that Cintas violated certain federal and state wage and hour laws applicable to its service sales representatives,
whom Cintas considers exempt employees, and asserting additional related ERISA claims. On April 5, 2004 and February 14, 2006, the Court stayed the claims of all plaintiffs with valid
arbitration agreements pending arbitration of those claims. Claims made in theVelizaction, therefore, are pending before the United States District
Court, Northern District of California and Judge Bruce Meyerson (Ret.), an Arbitrator selected by the parties. On August 5, 2009, the parties in the Velizaction reached a settlement in principle.
When the settlement is fully documented and approved by the Court, the settlement will resolve all claims
now pending or that could have been brought relating to the subject matter of the case before the Court and the Arbitrator. Cintas expects that the approval process will take several months. The
principal terms of the settlement provide for an aggregate cash payment of approximately $23,950 which is accrued in current accrued liabilities at May 31, 2010. The pre-tax impact,
net of insurance proceeds, was $19,477.

During
fiscal 2010, Cintas had other legal settlements that totaled $4,052, net of insurance proceeds. None of these settlements were significant individually. These settlements included litigation
related to multiple subjects including employment practices and insurance coverage.

14.  Operating Segment Information

Cintas classifies its businesses into four operating segments. The Rental Uniforms and Ancillary Products operating segment consists
of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom
cleaning services and supplies and carpet and tile cleaning services are also provided within this operating segment. The Uniform Direct Sales operating segment consists of the direct sale of uniforms
and related items and branded promotional products. The First Aid, Safety and Fire Protection Services operating segment consists of first aid, safety and fire protection products and services. The
Document Management Services operating segment consists of document destruction, document imaging and document retention services.

As
described more fully in Note 2 entitled Restructuring and Related Activity, Cintas recorded a charge of $59,097 related to restructuring activities and impairment of long-lived
assets in the fiscal year ended May 31, 2009. The total charges due to the restructuring activities and impairment of long-lived assets for the Rental Uniforms and Ancillary
Products, Uniform Direct Sales, First Aid, Safety and Fire Protection Services and Document Management Services operating segments is $52,986, $4,682, $1,107 and $322, respectively.

57

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Table of Contents

Cintas
evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting
policies of the operating segments are the same as those described in Note 1 entitled Significant Accounting Policies. Information related to the operations of Cintas' operating segments is set
forth below:

Rental
Uniforms
& Ancillary
Products


Uniform
Direct
Sales


First Aid,
Safety &
Fire
Protection


Document
Management


Corporate


TotalMay 31, 2010Revenue

$
2,569,357

$
386,370

$
338,651

$
252,961

$


$
3,547,339Gross margin

$
1,119,781

$
116,336

$
131,726

$
129,974

$


$
1,497,817Selling and admin. expenses


786,145


76,232


118,284


105,698





1,086,359Legal settlements, net of insurance proceeds














23,529


23,529Restructuring charges


(2,880
)













(2,880
)Interest income














(1,695
)

(1,695
)Interest expense














48,612


48,612Income before income taxes

$
336,516

$
40,104

$
13,442

$
24,276

$
(70,446
)
$
343,892Depreciation and amortization

$
131,714

$
7,582

$
16,178

$
37,667

$


$
193,141Capital expenditures

$
68,224

$
6,791

$
8,155

$
27,908

$


$
111,078Total assets

$
2,375,208

$
198,955

$
329,569

$
499,917

$
566,087

$
3,969,736May 31, 2009Revenue

$
2,755,015

$
428,369

$
378,097

$
213,204

$


$
3,774,685Gross margin

$
1,192,785

$
106,033

$
144,180

$
107,873

$


$
1,550,871Selling and admin. expenses


769,275


98,131


127,126


88,177





1,082,709Restructuring charges


8,782


547


564


316





10,209Impairment of long-lived assets


44,204


4,135


543


6





48,888Interest income














(2,764
)

(2,764
)Interest expense














50,236


50,236Income before income taxes

$
370,524

$
3,220

$
15,947

$
19,374

$
(47,472
)
$
361,593Depreciation and amortization

$
140,448

$
6,950

$
18,282

$
34,426

$


$
200,106Capital expenditures

$
114,423

$
14,582

$
8,312

$
22,775

$


$
160,092Total assets

$
2,533,406

$
140,826

$
324,158

$
472,423

$
250,138

$
3,720,951May 31, 2008Revenue

$
2,834,568

$
517,490

$
403,552

$
182,290

$


$
3,937,900Gross margin

$
1,252,951

$
168,210

$
160,823

$
99,616

$


$
1,681,600Selling and admin. expenses


801,691


103,444


125,185


73,825





1,104,145Interest income














(6,072
)

(6,072
)Interest expense














52,823


52,823Income before income taxes

$
451,260

$
64,766

$
35,638

$
25,791

$
(46,751
)
$
530,704Depreciation and amortization

$
139,781

$
7,072

$
17,483

$
27,567

$


$
191,903Capital expenditures

$
140,838

$
6,454

$
12,043

$
30,998

$


$
190,333Total assets

$
2,620,138

$
205,638

$
345,479

$
445,651

$
191,695

$
3,808,601


58

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Table of Contents

15.  Quarterly Financial Data (Unaudited)

The following is a summary of the results of operation for each of the quarters within the fiscal years ended May 31, 2010 and
2009:

May 31, 2010


First
Quarter


Second
Quarter


Third
Quarter


Fourth
QuarterRevenue

$
891,569

$
884,509

$
861,812

$
909,449Gross margin

$
382,795

$
369,847

$
359,607

$
385,568Net income

$
53,984

$
57,176

$
48,982

$
55,478Basic earnings per share

$
0.35

$
0.37

$
0.32

$
0.36Diluted earnings per share

$
0.35

$
0.37

$
0.32

$
0.36Weighted average number of shares outstanding (000's)


152,828


152,866


152,869


152,870




May 31, 2009


First
Quarter


Second
Quarter


Third
Quarter


Fourth
QuarterRevenue

$
1,002,179

$
985,184

$
908,639

$
878,683Gross margin

$
425,083

$
415,000

$
376,437

$
334,351Net income

$
78,636

$
71,838

$
71,811

$
4,072Basic earnings per share

$
0.51

$
0.47

$
0.47

$
0.03Diluted earnings per share

$
0.51

$
0.47

$
0.47

$
0.03Weighted average number of shares outstanding (000's)


153,394


152,788


152,993


152,790


As described more fully in Note 2 entitled Restructuring and Related Activity, we recorded a charge of $59,097 related to restructuring activities and impairment of
long-lived assets in the quarter ended May 31, 2009.

59

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Table of Contents

16.  Supplemental Guarantor Information

Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly-owned principal operating subsidiary of Cintas. Corp. 2 is
the issuer of the $775,000 of long-term senior notes, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly-owned, direct and indirect domestic
subsidiaries.

As
allowed by SEC rules, the following condensed consolidating financial statements are provided as an alternative to filing separate financial statements of the guarantors. Each of the subsidiaries
presented in the condensed consolidating financial statements has been fully consolidated in Cintas' consolidated financial statements. The condensed consolidating financial statements should be read
in conjunction with the consolidated financial statements of Cintas and notes thereto of which this note is an integral part.

Condensed
consolidating financial statements for Cintas, Corp. 2, the subsidiary guarantors and non-guarantors are presented on the following pages:

Condensed Consolidating Income Statement

Year Ended May 31, 2010


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedRevenue:Rental uniforms and ancillary products

$


$
1,970,303

$
518,254

$
180,847

$
(100,047
)
$
2,569,357Other services





1,216,779


351,368


66,229


(656,394
)

977,982Equity in net income of affiliates


215,620











(215,620
)

215,620


3,187,082


869,622


247,076


(972,061
)

3,547,339Costs and expenses (income):Cost of rental uniforms and ancillary products





1,226,076


332,935


111,340


(220,775
)

1,449,576Cost of other services





798,841


297,890


41,316


(538,101
)

599,946Selling and administrative expenses





1,037,945


(20,140
)

67,669


885


1,086,359Legal settlements, net of insurance proceeds








23,529








23,529Restructuring charges





(1,080
)

(1,800
)







(2,880
)Operating income


215,620


125,300


237,208


26,751


(214,070
)

390,809Interest income





(268
)

(1,130
)

(297
)




(1,695
)Interest expense (income)





51,486


(2,897
)

23





48,612Income before income taxes


215,620


74,082


241,235


27,025


(214,070
)

343,892Income taxes





27,936


91,239


9,123


(26
)

128,272Net income

$
215,620

$
46,146

$
149,996

$
17,902

$
(214,044
)
$
215,620


60

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Table of Contents

Condensed Consolidating Income Statement

Year Ended May 31, 2009


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedRevenue:Rental uniforms and ancillary products

$


$
2,101,857

$
569,780

$
175,711

$
(92,333
)
$
2,755,015Other services





1,295,603


397,426


60,414


(733,773
)

1,019,670Equity in net income of affiliates


226,357











(226,357
)

226,357


3,397,460


967,206


236,125


(1,052,463
)

3,774,685Costs and expenses (income):Cost of rental uniforms and ancillary products





1,242,048


368,125


106,856


(154,799
)

1,562,230Cost of other services





958,634


348,159


38,449


(683,658
)

661,584Selling and administrative expenses





1,051,221


(27,889
)

57,953


1,424


1,082,709Restructuring charges





6,575


3,531


103





10,209Impairment of long-lived assets





25,713


17,328


5,847





48,888Operating income


226,357


113,269


257,952


26,917


(215,430
)

409,065Interest income








(930
)

(1,834
)




(2,764
)Interest expense (income)





53,197


(2,982
)

21





50,236Income before income taxes


226,357


60,072


261,864


28,730


(215,430
)

361,593Income taxes





17,152


110,001


8,083





135,236Net income

$
226,357

$
42,920

$
151,863

$
20,647

$
(215,430
)
$
226,357


Condensed Consolidating Income Statement

Year Ended May 31, 2008


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedRevenue:Rental uniforms and ancillary products

$


$
2,059,920

$
578,426

$
197,333

$
(1,111
)
$
2,834,568Other services





1,418,749


536,881


66,873


(919,171
)

1,103,332Equity in net income of affiliates


335,405











(335,405
)

335,405


3,478,669


1,115,307


264,206


(1,255,687
)

3,937,900Costs and expenses (income):Cost of rental uniforms and ancillary products





1,262,373


372,225


115,822


(168,802
)

1,581,618Cost of other services





928,838


456,759


41,750


(752,665
)

674,682Selling and administrative expenses





1,078,984


(27,702
)

57,239


(4,376
)

1,104,145Operating income


335,405


208,474


314,025


49,395


(329,844
)

577,455Interest income








(1,450
)

(4,622
)




(6,072
)Interest expense (income)





54,153


(7,107
)

5,777





52,823Income before income taxes


335,405


154,321


322,582


48,240


(329,844
)

530,704Income taxes





57,779


120,776


16,744





195,299Net income

$
335,405

$
96,542

$
201,806

$
31,496

$
(329,844
)
$
335,405


61

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Table of Contents

Condensed Consolidating Balance Sheet

As of May 31, 2010


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedAssetsCurrent assets:Cash and cash equivalents

$


$
34,905

$
339,702

$
36,674

$


$
411,281Marketable securities








21,954


132,852





154,806Accounts receivable, net





265,594


74,256


26,451





366,301Inventories, net





144,826


16,857


9,420


(1,619
)

169,484Uniforms and other rental items in service





256,398


70,489


25,514


(20,295
)

332,106Income taxes, current





5,306


(591
)

10,976





15,691Deferred tax asset (liability)








54,474


(2,059
)




52,415Prepaid expenses





5,565


6,371


1,487





13,423Assets held for sale








9,437








9,437Total current assets





712,594


592,949


241,315


(21,914
)

1,524,944Property and equipment, at cost, net





591,040


240,462


63,020





894,522Goodwill








1,310,675


46,250





1,356,925Service contracts, net





98,335


880


4,230





103,445Other assets, net


2,032,649


1,608,188


814,657


322,707


(4,688,301
)

89,900$
2,032,649

$
3,010,157

$
2,959,623

$
677,522

$
(4,710,215
)
$
3,969,736Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable

$
(465,247
)
$
164,131

$
343,454

$
(8,614
)
$
38,023

$
71,747Accrued compensation and related liabilities





42,181


21,730


3,013





66,924Accrued liabilities





53,432


178,698


13,092


(820
)

244,402Long-term debt due within one year





805


(196
)







609Total current liabilities


(465,247
)

260,549


543,686


7,491


37,203


383,682Long-term liabilities:Long-term debt due after one year





795,541


(10,917
)




820


785,444Deferred income taxes








145,563


4,997





150,560Accrued liabilities








115,549


472





116,021Total long-term liabilities





795,541


250,195


5,469


820


1,052,025Total shareholders' equity


2,497,896


1,954,067


2,165,742


664,562


(4,748,238
)

2,534,029$
2,032,649

$
3,010,157

$
2,959,623

$
677,522

$
(4,710,215
)
$
3,969,736


62

---



Table of Contents

Condensed Consolidating Balance Sheet

As of May 31, 2009


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedAssetsCurrent assets:Cash and cash equivalents

$


$
39,397

$
76,979

$
13,369

$


$
129,745Marketable securities











120,393





120,393Accounts receivable, net





275,878


88,158


21,944


(28,302
)

357,678Inventories, net





194,604


2,505


8,248


(3,006
)

202,351Uniforms and other rental items in service





258,766


76,167


20,998


(20,484
)

335,447Income taxes, current





3,172


15,865


6,475





25,512Deferred tax asset (liability)








67,298


(930
)




66,368Prepaid expenses





6,178


9,473


1,384





17,035Assets held for sale








15,744








15,744Total current assets





777,995


352,189


191,881


(51,792
)

1,270,273Property and equipment, at cost, net





636,348


227,325


50,954





914,627Goodwill








1,293,559


37,829





1,331,388Service contracts, net





118,459


1,658


4,213





124,330Other assets, net


1,876,863


1,598,027


1,782,517


336,264


(5,513,338
)

80,333$
1,876,863

$
3,130,829

$
3,657,248

$
621,141

$
(5,565,130
)
$
3,720,951Liabilities and Shareholders' EquityCurrent liabilities:Accounts payable

$
(465,247
)
$
162,162

$
371,731

$
(20,013
)
$
21,332

$
69,965Accrued compensation and related liabilities





32,119


14,296


1,999





48,414Accrued liabilities





43,066


131,618


8,066


(858
)

181,892Long-term debt due within one year





749


68





(219
)

598Total current liabilities


(465,247
)

238,096


517,713


(9,948
)

20,255


300,869Long-term liabilities:Long-term debt due after one year





796,351


241


24,511


(35,045
)

786,058Deferred income taxes








145,444


3,588





149,032Accrued liabilities








117,210


373





117,583Total long-term liabilities





796,351


262,895


28,472


(35,045
)

1,052,673Total shareholders' equity


2,342,110


2,096,382


2,876,640


602,617


(5,550,340
)

2,367,409$
1,876,863

$
3,130,829

$
3,657,248

$
621,141

$
(5,565,130
)
$
3,720,951


63

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Table of Contents

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2010


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedCash flows from operating activities:Net income

$
215,620

$
46,146

$
149,996

$
17,902

$
(214,044
)
$
215,620Adjustments to reconcile net income to net cash provided by (used in) operating activities:Depreciation





105,981


37,149


8,929





152,059Amortization





37,723


879


2,480





41,082Stock-based compensation


15,349














15,349Deferred income taxes





(1,745
)

12,668


2,372





13,295Changes in current assets and liabilities, net of acquisitions of businesses:Accounts receivable, net





17,360


14,594


(2,512
)

(28,302
)

1,140Inventories, net





49,396


(16,803
)

(913
)

(1,387
)

30,293Uniforms and other rental items in service





2,379


5,655


(3,681
)

(189
)

4,164Prepaid expenses





667


3,101


(53
)




3,715Accounts payable





19,707


(70,957
)

43,498


16,691


8,939Accrued compensation and related liabilities





10,022


7,435


936





18,393Accrued liabilities





2,489


45,418


(417
)

38


47,528Income taxes payable (receivable)





(2,134
)

16,455


(4,326
)




9,995Net cash provided by (used in) operating activities


230,969


287,991


205,590


64,215


(227,193
)

561,572Cash flows from investing activities:Capital expenditures





(62,236
)

(42,422
)

(6,420
)




(111,078
)Proceeds from sale or redemption of marketable securities








8,361


26,351





34,712Purchase of marketable securities and investments





(24,826
)

161,621


(34,137
)

(183,927
)

(81,269
)Acquisitions of businesses, net of cash acquired





(25,686
)




(24,758
)




(50,444
)Other, net


(156,082
)

(179,965
)

(34,494
)

84


375,036


4,579Net cash (used in) provided by investing activities


(156,082
)

(292,713
)

93,066


(38,880
)

191,109


(203,500
)Cash flows from financing activities:Repayment of debt





(754
)

(35,933
)




36,084


(603
)Dividends paid


(73,950
)







(10
)




(73,960
)Repurchase of common stock


(969
)













(969
)Other


32


767





(1,776
)




(977
)Net cash (used in) provided by financing activities


(74,887
)

13


(35,933
)

(1,786
)

36,084


(76,509
)Effect of exchange rate changes on cash and cash equivalents





217





(244
)




(27
)Net (decrease) increase in cash and cash equivalents





(4,492
)

262,723


23,305





281,536Cash and cash equivalents at beginning of period





39,397


76,979


13,369





129,745Cash and cash equivalents at end of period

$


$
34,905

$
339,702

$
36,674

$


$
411,281


64

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Table of Contents

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2009


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedCash flows from operating activities:Net income

$
226,357

$
42,920

$
151,863

$
20,647

$
(215,430
)
$
226,357Adjustments to reconcile net income to net cash provided by (used in) operating activities:Depreciation





111,242


38,289


8,041





157,572Amortization





39,637


1,115


1,782





42,534Impairment of long-lived assets





25,713


18,222


4,953





48,888Stock-based compensation


11,953














11,953Deferred income taxes








1,429


(2,603
)




(1,174
)Changes in current assets and liabilities, net of acquisitions of businesses:Accounts receivable, net





37,582


31,432


5,100


(2,965
)

71,149Inventories, net





23,521


15,843


(517
)

(3,711
)

35,136Uniforms and other rental items in service





29,220


7,859


(149
)

(7,269
)

29,661Prepaid expenses





(1,131
)

(3,597
)

(221
)




(4,949
)Accounts payable





(115,841
)

101,999


(13,474
)

2,756


(24,560
)Accrued compensation and related liabilities





2,141


(3,917
)

(236
)




(2,012
)Accrued liabilities





(11,594
)

(19,038
)

1,579


62


(28,991
)Income taxes receivable





(3,461
)

(28,551
)

(6,030
)




(38,042
)Net cash provided by (used in) operating activities


238,310


179,949


312,948


18,872


(226,557
)

523,522Cash flows from investing activities:Capital expenditures





(91,914
)

(59,925
)

(8,253
)




(160,092
)Proceeds from sale or redemption of marketable securities











116,433





116,433Purchase of marketable securities and investments





1,912


13,691


(122,652
)

(21,353
)

(128,402
)Acquisitions of businesses, net of cash acquired





(21,561
)




(9,348
)




(30,909
)Other, net


(140,259
)

88,792


(193,727
)

(64
)

245,007


(251
)Net cash (used in) provided by investing activities


(140,259
)

(22,771
)

(239,961
)

(23,884
)

223,654


(203,221
)Cash flows from financing activities:Proceeds from issuance of debt





7,500











7,500Repayment of debt





(163,693
)

(3,859
)




2,903


(164,649
)Dividends paid


(72,207
)













(72,207
)Repurchase of common stock


(25,847
)













(25,847
)Other


3


767





85





855Net cash (used in) provided by financing activities


(98,051
)

(155,426
)

(3,859
)

85


2,903


(254,348
)Effect of exchange rate changes on cash and cash equivalents





173





(2,605
)




(2,432
)Net increase (decrease) in cash and cash equivalents





1,925


69,128


(7,532
)




63,521Cash and cash equivalents at beginning of period





37,472


7,851


20,901





66,224Cash and cash equivalents at end of period

$


$
39,397

$
76,979

$
13,369

$


$
129,745


65

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Table of Contents

Condensed Consolidating Statement of Cash Flows

Year Ended May 31, 2008


Cintas
Corporation


Corp. 2


Subsidiary
Guarantors


Non-
Guarantors


Eliminations


Cintas
Corporation
ConsolidatedCash flows from operating activities:Net income

$
335,405

$
96,542

$
201,806

$
31,496

$
(329,844
)
$
335,405Adjustments to reconcile net income to net cash provided by (used in) operating activities:Depreciation





97,366


42,730


8,470





148,566Amortization





39,762


1,303


2,272





43,337Stock-based compensation


7,456














7,456Deferred income taxes








1,380


283





1,663Changes in current assets and liabilities, net of acquisitions of businesses:Accounts receivable, net





(9,760
)

(10,217
)

(2,630
)

7,668


(14,939
)Inventories, net





(9,703
)

5,053


(587
)

(863
)

(6,100
)Uniforms and other rental items in service





(14,890
)

(3,183
)

(1,083
)

(4,698
)

(23,854
)Prepaid expenses





318


3,630


(118
)




3,830Accounts payable





2,149,538


(2,139,010
)

27,909


(7,870
)

30,567Accrued compensation and related liabilities





(17,793
)

6,022


(659
)




(12,430
)Accrued liabilities





20,651


(753
)

486


14


20,398Income taxes (receivable) payable





(386
)

11,123


(1,896
)




8,841Net cash provided by (used in) operating activities


342,861


2,351,645


(1,880,116
)

63,943


(335,593
)

542,740Cash flows from investing activities:Capital expenditures





(121,909
)

(60,818
)

(7,606
)




(190,333
)Proceeds from sale or redemption of marketable securities








37,663


8,128





45,791Purchase of marketable securities and investments





(1,530,460
)

(371,128
)

(42,921
)

1,890,011


(54,498
)Acquisitions of businesses, net of cash acquired





(93,773
)

(41
)

(17,721
)




(111,535
)Other, net


(84,965
)

(671,455
)

2,308,662


(6
)

(1,552,636
)

(400
)Net cash (used in) provided by investing activities


(84,965
)

(2,417,597
)

1,914,338


(60,126
)

337,375


(310,975
)Cash flows from financing activities:Proceeds from issuance of debt





295,000











295,000Repayment of debt





(229,090
)

(1,537
)




(1,782
)

(232,409
)Stock options exercised


8,371














8,371Dividends paid


(70,831
)













(70,831
)Repurchase of common stock


(191,479
)













(191,479
)Other


(3,957
)

(7,319
)




(80
)




(11,356
)Net cash (used in) provided by financing activities


(257,896
)

58,591


(1,537
)

(80
)

(1,782
)

(202,704
)Effect of exchange rate changes on cash and cash equivalents





578





1,225





1,803Net (decrease) increase in cash and cash equivalents





(6,783
)

32,685


4,962





30,864Cash and cash equivalents at beginning of period





44,255


(24,834
)

15,939





35,360Cash and cash equivalents at end of period

$


$
37,472

$
7,851

$
20,901

$


$
66,224


66

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Table of Contents

Item 9.  Changes in and Disagreements withAccountants on Accounting and Financial Disclosure

Nothing to report.

Item 9A.  Controls and Procedures

Disclosure Controls and Procedures

With the participation of Cintas' management, including Cintas' Chief Executive Officer, Chief Financial Officer, General Counsel and
Controllers, Cintas has evaluated the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934) as of May 31, 2010. Based on such evaluation, Cintas' management, including Cintas' Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, have
concluded that Cintas' disclosure controls and procedures were effective as of May 31, 2010, in ensuring (i) information required to be disclosed by Cintas in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) information required to be disclosed
by Cintas in the reports that it files or submits under the Exchange Act is accumulated and communicated to Cintas' management, including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

There were no significant changes in Cintas' internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended May 31, 2010, that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting. See "Management's Report on Internal Control over Financial Reporting" and "Report of Independent Registered Public Accounting Firm"
in Item 8 preceding Cintas' financial statements.

Item 9B.  Other Information

Nothing to report.

67

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Table of Contents

Part III

Items 10,
11, 12, 13 and 14 of Part III are incorporated by reference to the Registrant's Proxy Statement for its 2010 Annual Shareholders' Meeting to be filed with the Commission
pursuant to Regulation 14A.

The
information called for by Item 12 relating to "Securities Authorized for Issuance under Equity Compensation Plans" is set forth in the table below:

Securities Authorized for Issuance Under Equity Compensation Plans

Equity Compensation Plan Information

Plan category


Number of shares
to be issued
upon exercise of
outstanding options (1)


Weighted average
exercise price of
outstanding options (1)


Number of shares
remaining available
for future issuance
under equity
compensation plansEquity compensation plans approved by shareholders


6,467,206

$
37.63


10,914,768Equity compensation plans not approved by shareholders








Total


6,467,206

$
37.63


10,914,768


(1) Excludes 1,407,351 unvested restricted stock units.

68

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Table of Contents

Part IV

Item 15.  Exhibits and Financial Statement Schedules

(a) (1)

Financial Statements. All financial statements required to be filed by Item 8 of this Form and included in this report are listed in Item 8. No additional financial statements are filed because the requirements
for paragraph (d) under Item 14 are not applicable to Cintas.(a) (2)

Financial Statement Schedule:For each of the three years in the period ended May 31, 2010.Schedule II: Valuation and Qualifying Accounts and Reserves.All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the Consolidated Financial Statements or Notes thereto.(a) (3)

Exhibits.


Exhibit
Number

Description of Exhibit3.1

Restated Articles of Incorporation, as amended (Incorporated by reference to Exhibit 4.1 to Cintas' Form S-3 Registration Statement filed on December 3, 2007.)3.2

Amended and Restated By-laws (Incorporated by reference to Exhibit 3 to Cintas' Form 8-K dated October 14, 2008.)4.1

Indenture dated as of May 28, 2002, among Cintas Corporation No. 2, as issuer, Cintas Corporation, as parent guarantor, the subsidiary guarantors thereto and Wachovia Bank, National Association, as trustee
(Incorporated by reference to Cintas' Form 10-Q for the quarter ended February 28, 2005.)4.2

Form of 6% Senior Note due 2012 (Incorporated by reference to Cintas' Form 10-Q for the quarter ended February 28, 2005.)4.3

Form of 6.15% Senior Note due 2036 (Incorporated by reference to Cintas' Form 8-K dated August 17, 2006.)10.1*

Incentive Stock Option Plan (Incorporated by reference to Cintas' Registration Statement No. 33-23228 on Form S-8 filed under the Securities Act of 1933.)10.2*

Partners' Plan, as Amended (Incorporated by reference to Cintas' Registration Statement No. 33-56623 on Form S-8 filed under the Securities Act of 1933.)10.3*

1999 Cintas Corporation Stock Option Plan (Incorporated by reference to Cintas' Form 10-Q for the quarter ended November 30, 2000.)10.4*

Directors' Deferred Compensation Plan (Incorporated by reference to Cintas' Form 10-Q for the quarter ended November 30, 2001.)10.5*

Amended and Restated 2003 Directors' Stock Option Plan (Incorporated by reference to Cintas' Form 10-K dated May 31, 2004.)10.6*

Form of agreement signed by Officers, General/Branch Managers, Professionals and Key Managers, including Executive Officers (Incorporated by reference to Cintas' Form 10-Q for the quarter ended February 28,
2005.)


69

---



Table of Contents

10.7*

President and CEO Executive Compensation Plan (Incorporated by reference to Cintas' Form 10-K dated May 31, 2005.)10.8*

2006 Executive Incentive Plan (Incorporated by reference to Cintas' Form 10-K dated May 31, 2005.)10.9*

2005 Equity Compensation Plan (Incorporated by reference to Cintas' Registration Statement No. 333-131375 on Form S-8 filed under the Securities Act of 1933.)10.10*

Criteria for Performance Evaluation of the President and CEO (Incorporated by reference to Cintas' Form 10-K dated May 31, 2006.)10.11*

2007 Executive Incentive Plan (Incorporated by reference to Cintas' Form 10-K dated May 31, 2006.)14

Code of Ethics (Incorporated by reference to Cintas' Form 10-K dated May 31, 2004.)21**

Subsidiaries of the Registrant23**

Consent of Independent Registered Public Accounting Firm31.1**

Certification of Principal Executive Officer, Pursuant to Rule 13a14(a) of the Securities Exchange Act of 193431.2**

Certification of Principal Financial Officer, Pursuant to Rule 13a14(a) of the Securities Exchange Act of 193432.1**

Certification of Chief Executive Officer, Pursuant to 18 U.S.C. § 135032.2**

Certification of Chief Financial Officer, Pursuant to 18 U.S.C. § 1350


Cintas
will provide shareholders with any exhibit upon the payment of a specified reasonable fee, which fee shall be limited to Cintas' reasonable expenses in furnishing such exhibit.

70

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Table of Contents

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

CINTAS
CORPORATION

By:  /s/  Scott
D. Farmer
             Scott D. Farmer
             Chief Executive Officer

DATE
SIGNED: July 30, 2010

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature

Capacity

Date/s/

Robert J. Kohlhepp
Robert J. Kohlhepp

Chairman of the Board of Directors

July 30, 2010/s/

Scott D. Farmer
Scott D. Farmer

Chief Executive Officer and Director

July 30, 2010/s/

Richard T. Farmer
Richard T. Farmer

Chairman Emeritus of the Board of Directors

July 30, 2010/s/

Ronald W. Tysoe
Ronald W. Tysoe

Director

July 30, 2010/s/

James J. Johnson
James J. Johnson

Director

July 30, 2010/s/

David C. Phillips
David C. Phillips

Director

July 30, 2010/s/

William C. Gale
William C. Gale

Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

July 30, 2010


71

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Table of Contents

Cintas Corporation
Schedule II  Valuation and Qualifying Accounts and Reserves

Additions(In thousands)


Balance at
Beginning
of Year


(1)
Charged to
Costs and
Expenses


(2)
Charged to
Other
Accounts


(3)
Deductions


Balance at
End
of YearAllowance for Doubtful AccountsMay 31, 2008

$
14,486

$
4,530

$
127

$
6,004

$
13,139May 31, 2009

$
13,139

$
16,650

$
5

$
10,262

$
19,532May 31, 2010

$
19,532

$
1,060

$
(167
)
$
6,128

$
14,297Reserve for Obsolete InventoryMay 31, 2008

$
22,906

$
1,431

$
751

$
4,428

$
20,660May 31, 2009

$
20,660

$
33,972

$
(85
)
$
6,194

$
48,353May 31, 2010

$
48,353

$
(7,979
)
$
(130
)
$
7,778

$
32,466


72

---