Jul 23, 2020   SOURCE: BusinessWire

Cintas Corporation Announces Fiscal 2020 Fourth Quarter and Full Year Results

Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2020 fourth quarter ended May 31, 2020. Revenue for the fourth quarter of fiscal 2020 was $1.62 billion, a decrease of 9.7% over last year’s fourth quarter. Earnings per diluted share (EPS) from continuing operations were $1.35 in the fourth quarter of fiscal 2020, a decrease of 34.5% over last year's fourth quarter EPS. Net cash provided by operating activities for the fourth quarter of fiscal 2020 was $356.9 million. Free cash flow, which is defined as net cash provided by operating activities less capital expenditures, in the fourth quarter was the highest of fiscal 2020, totaling $316.0 million.

Organic revenue for the fiscal 2020 fourth quarter ended May 31, 2020, which is adjusted for acquisitions, foreign currency exchange rate fluctuations, and differences in the number of workdays, declined 8.4%. from last year's fourth quarter. Organic revenue for the Uniform Rental and Facility Services operating segment declined 9.6%. Organic revenue for the First Aid and Safety Services operating segment increased 21.9%.

Scott D. Farmer, Cintas' Chairman and Chief Executive Officer, stated, "The COVID-19 coronavirus (COVID-19) pandemic was a significant disruption to the economy as well as to our business in our fiscal 2020 fourth quarter. The government-required closure of many businesses certainly had an impact on our fiscal 2020 fourth quarter financial results. Our priorities have been to keep our employees, whom we call "partners", healthy and safe and to remain committed to serving our customers in any way possible."

Gross margin for the fourth quarter of fiscal 2020 of $707.8 million decreased 14.1% from last year’s fourth quarter. Gross margin as a percentage of revenue was 43.7% for the fourth quarter of fiscal 2020 compared to 45.9% in the fourth quarter of fiscal 2019.

Operating income for the fourth quarter of fiscal 2020 of $207.4 million decreased 34.0% from last year’s fourth quarter operating income of $314.4 million. Operating income as a percentage of revenue was 12.8% in the fourth quarter of fiscal 2020 compared to 17.5% in the fourth quarter of fiscal 2019. Fourth quarter of fiscal 2020 operating income was affected by many items caused by the COVID-19 pandemic, including additional reserves on accounts receivable and inventory; severance and asset impairment expenses; and lower incentive compensation expense.

Net income from continuing operations was $144.6 million for the fourth quarter of fiscal 2020, and EPS from continuing operations were $1.35. Net income from continuing operations was $226.2 million in the fourth quarter of fiscal 2019, and EPS from continuing operations were $2.06.

Net cash provided by operating activities for the fourth quarter of fiscal 2020 was $356.9 million compared to $397.1 million in last year's fourth quarter. Fourth quarter free cash flow was $316.0 million compared to $328.2 in last year's fourth quarter.

For the fiscal year ended May 31, 2020, revenue was $7.09 billion, an increase of 2.8% over the prior fiscal year. The organic revenue growth rate was 3.1%. EPS from continuing operations for fiscal 2020 were $8.11 compared to $7.99 for last fiscal year. For the fiscal year ended May 31, 2020, free cash flow was $1.06 billion, an increase of 34.1% compared to the fiscal year ended May 31, 2019. Revenue and EPS have grown 49 of the past 51 years.

Mr. Farmer commented, “Visibility to future financial performance remains impaired due to the COVID-19 pandemic. The recent increase in people contracting the virus and the actions governments are taking again in response only add to the uncertainty of the pace of the economic recovery. Therefore, we are not providing fiscal year financial guidance at this time. However, since we are more than halfway through our fiscal 2021 first quarter, we will provide our first quarter financial estimates. We expect our first quarter revenue to be in the range of $1.675 billion to $1.700 billion and EPS to be in the range of $2.00 to $2.20. Despite the uncertainty, I'm confident in our ability to manage the short-term volatility and maintain focus on our long-term objectives."

Mr. Farmer concluded, “Our employee-partners have been consistent and diligent in their care of each other and our customers, providing essential products and services. I'm proud of their ability to persevere and adapt in the midst of unprecedented adversity. In addition, I'm excited as ever about our principal objective of exceeding our customers' expectations to maximize the long-term value of Cintas. Our value proposition of getting businesses Ready for the Workday® by providing essential, unparalleled image, safety, cleanliness and compliance has never resonated more than it does today. A new trend of a greater focus on health, readiness, and outsourcing of non-core activities is underway. Cintas is well-positioned to benefit from the new normal.”

About Cintas

Cintas Corporation helps more than one million businesses of all types and sizes get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and training and compliance courses, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and the Nasdaq-100 Index.

CAUTION CONCERNING 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 similar words, terms and 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. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Press Release. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; 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; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; the effect of new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viral pandemics such as the COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 2020 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.

Cintas Corporation
Consolidated Condensed Statements of Income
(Unaudited)
(In thousands except per share data)

 

 

Three Months Ended

 

May 31,
2020

 

May 31,
2019

 

%
Change

Revenue:

 

 

 

 

 

Uniform rental and facility services

$

1,270,970

 

 

$

1,428,392

 

 

(11.0)%

Other

348,614

 

 

365,338

 

 

(4.6)%

Total revenue

1,619,584

 

 

1,793,730

 

 

(9.7)%

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of uniform rental and facility services

716,602

 

 

771,056

 

 

(7.1)%

Cost of other

195,162

 

 

199,109

 

 

(2.0)%

Selling and administrative expenses

500,386

 

 

508,240

 

 

(1.5)%

G&K Services, Inc. integration expenses

—

 

 

914

 

 

(100.0)%

 

 

 

 

 

 

Operating income

207,434

 

 

314,411

 

 

(34.0)%

 

 

 

 

 

 

Interest income

(196)

 

 

(271)

 

 

(27.7)%

Interest expense

25,952

 

 

25,782

 

 

0.7%

 

 

 

 

 

 

Income before income taxes

181,678

 

 

288,900

 

 

(37.1)%

Income taxes

37,093

 

 

62,729

 

 

(40.9)%

Income from continuing operations

144,585

 

 

226,171

 

 

(36.1)%

Loss from discontinued operations, net of tax

—

 

 

(52)

 

 

(100.0)%

Net income

$

144,585

 

 

$

226,119

 

 

(36.1)%

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

Continuing operations

$

1.38

 

 

$

2.13

 

 

(35.2)%

Discontinued operations

0.00

 

 

0.00

 

 

—%

Basic earnings per share

$

1.38

 

 

$

2.13

 

 

(35.2)%

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

Continuing operations

$

1.35

 

 

$

2.06

 

 

(34.5)%

Discontinued operations

0.00

 

 

0.00

 

 

—%

Diluted earnings per share

$

1.35

 

 

$

2.06

 

 

(34.5)%

 

 

 

 

 

 

Weighted average number of shares outstanding

103,758

 

 

105,018

 

 

 

Diluted average number of shares outstanding

106,231

 

 

108,339

 

 

 

Cintas Corporation
Consolidated Condensed Statements of Income
(In thousands except per share data)

 

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

 

%
Change

Revenue:

 

 

 

 

 

Uniform rental and facility services

$

5,643,494

 

 

$

5,552,430

 

 

1.6%

Other

1,441,626

 

 

1,339,873

 

 

7.6%

Total revenue

7,085,120

 

 

6,892,303

 

 

2.8%

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of uniform rental and facility services

3,055,145

 

 

3,027,599

 

 

0.9%

Cost of other

796,227

 

 

736,116

 

 

8.2%

Selling and administrative expenses

2,071,052

 

 

1,980,644

 

 

4.6%

G&K Services, Inc. integration expenses

—

 

 

14,410

 

 

(100.0)%

 

 

 

 

 

 

Operating income

1,162,696

 

 

1,133,534

 

 

2.6%

 

 

 

 

 

 

Gain on sale of a cost method investment

—

 

 

69,373

 

 

(100.0)%

 

 

 

 

 

 

Interest income

(988)

 

 

(1,228)

 

 

(19.5)%

Interest expense

105,393

 

 

101,736

 

 

3.6%

 

 

 

 

 

 

Income before income taxes

1,058,291

 

 

1,102,399

 

 

(4.0)%

Income taxes

181,931

 

 

219,764

 

 

(17.2)%

Income from continuing operations

876,360

 

 

882,635

 

 

(0.7)%

(Loss) income from discontinued operations, net of tax

(323)

 

 

2,346

 

 

(113.8)%

Net income

$

876,037

 

 

$

884,981

 

 

(1.0)%

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

Continuing operations

$

8.36

 

 

$

8.23

 

 

1.6%

Discontinued operations

0.00

 

 

0.02

 

 

(100.0)%

Basic earnings per share

$

8.36

 

 

$

8.25

 

 

1.3%

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

Continuing operations

$

8.11

 

 

$

7.97

 

 

1.8%

Discontinued operations

0.00

 

 

0.02

 

 

(100.0)%

Diluted earnings per share

$

8.11

 

 

$

7.99

 

 

1.5%

 

 

 

 

 

 

Weighted average number of shares outstanding

103,816

 

 

106,080

 

 

 

Diluted average number of shares outstanding

107,012

 

 

109,495

 

 

 

CINTAS CORPORATION SUPPLEMENTAL DATA

Gross Margin and Net Income Margin Results

 

Three Months Ended

 

May 31,
2020

 

May 31,
2019

 

 

 

 

Uniform rental and facility services gross margin

43.6%

 

46.0%

Other gross margin

44.0%

 

45.5%

Total gross margin

43.7%

 

45.9%

Net income margin, continuing operations

8.9%

 

12.6%

 

 

 

 

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

 

 

 

 

Uniform rental and facility services gross margin

45.9%

 

45.5%

Other gross margin

44.8%

 

45.1%

Total gross margin

45.6%

 

45.4%

Net income margin, continuing operations

12.4%

 

12.8%

Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure

The press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. To supplement its consolidated condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides the additional non-GAAP financial measures of earnings per diluted share, free cash flow and workday adjusted revenue growth. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance as well as prospects for future performance. A reconciliation of the differences between these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP are shown in the tables within the narrative of the press release or below.

Earnings Per Share Results

 

 

Three Months Ended

 

May 31,
2020

 

May 31,
2019

 

Growth vs.
Fiscal 2019

EPS - continuing operations

$

1.35

 

 

$

2.06

 

 

 

G&K Services, Inc. integration expenses

—

 

 

0.01

 

 

 

EPS excluding above items

$

1.35

 

 

$

2.07

 

 

(34.8)%

 

 

 

 

 

 

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

 

Growth vs.
Fiscal 2019

EPS - continuing operations

$

8.11

 

 

$

7.97

 

 

 

G&K Services, Inc. integration expenses

—

 

 

0.10

 

 

 

One-time gain on sale of investment

—

 

 

(0.47)

 

 

 

EPS excluding above items

$

8.11

 

 

$

7.60

 

 

6.7%

Computation of Free Cash Flow

 

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

Net cash provided by operations

$

1,291,483

 

 

$

1,067,862

 

Capital expenditures

(230,289)

 

 

(276,719)

 

Free cash flow

$

1,061,194

 

 

$

791,143

 

Management uses free cash flow to assess the financial performance of the Company. Management believes that free cash flow is useful to investors because it relates the operating cash flow of the Company to the capital that is spent to continue, improve and grow business operations.

Computation of Growth on a Constant Workday Basis

 

 

Three Months Ended

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

 

Growth %

 

May 31,
2020

 

May 31,
2019

 

Growth %

 

A

 

B

 

G

 

I

 

J

 

O

Revenue

$

1,619,584

 

 

$

1,793,730

 

 

(9.7)%

 

$

7,085,120

 

 

$

6,892,303

 

 

2.8%

 

 

 

 

 

G=(A-B)/B

 

 

 

 

 

O=(I-J)/J

 

C

 

D

 

 

 

K

 

L

 

 

Workdays in the period

65

 

66

 

 

 

260

 

261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

E

 

F

 

H

 

M

 

N

 

P

Workday adjusted
revenue growth

$

1,644,501

 

 

$

1,793,730

 

 

(8.3)%

 

$

7,112,370

 

 

$

6,892,303

 

 

3.2%

 

E=(A/C)*D

 

F=(B/D)*D

 

H=(E-F)/F

 

M=(I/K)*L

 

N=(J/L)*L

 

P=(M-N)/N

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and foreign
currency exchange impact, net

 

 

 

(0.1)%

 

 

 

 

 

(0.1)%

 

 

 

 

 

 

 

 

 

 

 

 

Organic growth

 

 

 

 

(8.4)%

 

 

 

 

 

3.1%

Management believes that organic revenue growth is valuable to investors because it reflects the revenue performance compared to a prior period with the same number of revenue generating days and excludes the impact from acquisitions and foreign currency exchange rate fluctuations.

SUPPLEMENTAL SEGMENT DATA

 

 

Uniform Rental
and Facility Services

 

First Aid
and Safety Services

 

All
Other

 

Corporate

 

Total

 

 

 

 

 

 

 

 

 

 

For the three months ended May 31, 2020

 

 

 

 

 

 

 

 

Revenue

$

1,270,970

 

 

$

196,270

 

 

$

152,344

 

 

$

—

 

 

$

1,619,584

 

Gross margin

$

554,368

 

 

$

90,389

 

 

$

63,063

 

 

$

—

 

 

$

707,820

 

Selling and administrative expenses

$

376,809

 

 

$

57,599

 

 

$

65,978

 

 

$

—

 

 

$

500,386

 

Interest income

$

—

 

 

$

—

 

 

$

—

 

 

$

(196)

 

 

$

(196)

 

Interest expense

$

—

 

 

$

—

 

 

$

—

 

 

$

25,952

 

 

$

25,952

 

Income (loss) before income taxes

$

177,559

 

 

$

32,790

 

 

$

(2,915)

 

 

$

(25,756)

 

 

$

181,678

 

 

 

 

 

 

 

 

 

 

 

For the three months ended May 31, 2019

 

 

 

 

 

 

 

 

Revenue

$

1,428,392

 

 

$

163,535

 

 

$

201,803

 

 

$

—

 

 

$

1,793,730

 

Gross margin

$

657,336

 

 

$

78,029

 

 

$

88,200

 

 

$

—

 

 

$

823,565

 

Selling and administrative expenses

$

393,275

 

 

$

52,878

 

 

$

62,087

 

 

$

—

 

 

$

508,240

 

G&K Services, Inc. integration
expenses

$

914

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

914

 

Interest income

$

—

 

 

$

—

 

 

$

—

 

 

$

(271)

 

 

$

(271)

 

Interest expense

$

—

 

 

$

—

 

 

$

—

 

 

$

25,782

 

 

$

25,782

 

Income (loss) before income taxes

$

263,147

 

 

$

25,151

 

 

$

26,113

 

 

$

(25,511)

 

 

$

288,900

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended May 31, 2020

 

 

 

 

 

 

 

 

Revenue

$

5,643,494

 

 

$

708,569

 

 

$

733,057

 

 

$

—

 

 

$

7,085,120

 

Gross margin

$

2,588,349

 

 

$

338,661

 

 

$

306,738

 

 

$

—

 

 

$

3,233,748

 

Selling and administrative expenses

$

1,583,791

 

 

$

231,769

 

 

$

255,492

 

 

$

—

 

 

$

2,071,052

 

Interest income

$

—

 

 

$

—

 

 

$

—

 

 

$

(988)

 

 

$

(988)

 

Interest expense

$

—

 

 

$

—

 

 

$

—

 

 

$

105,393

 

 

$

105,393

 

Income (loss) before income taxes

$

1,004,558

 

 

$

106,892

 

 

$

51,246

 

 

$

(104,405)

 

 

$

1,058,291

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended May 31, 2019

 

 

 

 

 

 

 

 

Revenue

$

5,552,430

 

 

$

619,470

 

 

$

720,403

 

 

$

—

 

 

$

6,892,303

 

Gross margin

$

2,524,831

 

 

$

297,074

 

 

$

306,683

 

 

$

—

 

 

$

3,128,588

 

Selling and administrative expenses

$

1,533,711

 

 

$

206,990

 

 

$

239,943

 

 

$

—

 

 

$

1,980,644

 

G&K Services, Inc. integration
expenses

$

14,410

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

14,410

 

Gain on sale of a cost method
investment

$

—

 

 

$

—

 

 

$

—

 

 

$

69,373

 

 

$

69,373

 

Interest income

$

—

 

 

$

—

 

 

$

—

 

 

$

(1,228)

 

 

$

(1,228)

 

Interest expense

$

—

 

 

$

—

 

 

$

—

 

 

$

101,736

 

 

$

101,736

 

Income (loss) before income taxes

$

976,710

 

 

$

90,084

 

 

$

66,740

 

 

$

(31,135)

 

 

$

1,102,399

 

Cintas Corporation
Consolidated Condensed Balance Sheets
(In thousands except per share data)

 

 

May 31,
2020

 

May 31,
2019

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

145,402

 

 

$

96,645

 

Accounts receivable, net

870,369

 

 

910,120

 

Inventories, net

408,898

 

 

334,589

 

Uniforms and other rental items in service

770,411

 

 

784,133

 

Income taxes, current

—

 

 

7,475

 

Prepaid expenses and other current assets

114,619

 

 

103,318

 

Total current assets

2,309,699

 

 

2,236,280

 

 

 

 

 

Property and equipment, net

1,403,065

 

 

1,430,685

 

 

 

 

 

Investments

214,847

 

 

192,346

 

Goodwill

2,870,020

 

 

2,842,441

 

Service contracts, net

451,529

 

 

494,595

 

Operating lease right-of-use assets, net

159,967

 

 

—

 

Other assets, net

260,758

 

 

240,315

 

 

$

7,669,885

 

 

$

7,436,662

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

230,995

 

 

$

226,020

 

Accrued compensation and related liabilities

127,417

 

 

155,509

 

Accrued liabilities

456,653

 

 

433,940

 

Income taxes, current

27,099

 

 

—

 

Operating lease liabilities, current

43,031

 

 

—

 

Debt due within one year

—

 

 

312,264

 

Total current liabilities

885,195

 

 

1,127,733

 

 

 

 

 

Long-term liabilities:

 

 

 

Debt due after one year

2,539,705

 

 

2,537,507

 

Deferred income taxes

388,579

 

 

438,179

 

Operating lease liabilities

122,695

 

 

—

 

Accrued liabilities

498,509

 

 

330,522

 

Total long-term liabilities

3,549,488

 

 

3,306,208

 

 

 

 

 

Shareholders’ equity:

 

 

 

Preferred stock, no par value:

100,000 shares authorized, none outstanding

—

 

 

—

 

Common stock, no par value:

425,000,000 shares authorized

FY 2020: 186,793,207 issued and 103,415,368 outstanding

FY 2019: 184,790,626 issued and 103,284,401 outstanding

1,102,689

 

 

840,328

 

Paid-in capital

171,521

 

 

227,928

 

Retained earnings

7,296,509

 

 

6,691,236

 

Treasury stock:

(5,182,137)

 

 

(4,717,619)

 

FY 2020: 83,377,839 shares

FY 2019: 81,506,225 shares

 

Accumulated other comprehensive loss

(153,380)

 

 

(39,152)

 

Total shareholders’ equity

3,235,202

 

 

3,002,721

 

 

$

7,669,885

 

 

$

7,436,662

 

Cintas Corporation
Consolidated Condensed Statements of Cash Flows
(In thousands)

 

 

Twelve Months Ended

 

May 31,
2020

 

May 31,
2019

Cash flows from operating activities:

 

 

 

Net income

$

876,037

 

 

$

884,981

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

235,905

 

 

223,631

 

Amortization of intangible assets and capitalized contract costs

143,148

 

 

136,462

 

Stock-based compensation

115,435

 

 

139,210

 

Long-lived asset impairment

9,220

 

 

—

 

Gain on sale of a cost method investment

—

 

 

(69,373)

 

Gain on sale of business

—

 

 

(3,200)

 

Deferred income taxes

(16,252)

 

 

31,708

 

Change in current assets and liabilities, net of acquisitions of businesses:

 

 

 

Accounts receivable, net

39,681

 

 

(94,918)

 

Inventories, net

(74,773)

 

 

(60,039)

 

Uniforms and other rental items in service

12,773

 

 

(90,228)

 

Prepaid expenses and other current assets and capitalized contract costs

(110,248)

 

 

(100,765)

 

Accounts payable

2,629

 

 

12,276

 

Accrued compensation and related liabilities

(26,476)

 

 

15,321

 

Accrued liabilities and other

49,906

 

 

30,910

 

Income taxes, current

34,498

 

 

11,886

 

Net cash provided by operating activities

1,291,483

 

 

1,067,862

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

(230,289)

 

 

(276,719)

 

Purchase of investments

(10,031)

 

 

(17,841)

 

Proceeds from sale of assets

13,300

 

 

—

 

Proceeds from sale of a cost method investment

—

 

 

73,342

 

Proceeds from sale of business

—

 

 

3,200

 

Acquisitions of businesses, net of cash acquired

(53,720)

 

 

(9,813)

 

Other, net

(4,658)

 

 

(7,807)

 

Net cash used in investing activities

(285,398)

 

 

(235,638)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

(Payments) issuance of commercial paper, net

(112,500)

 

 

112,500

 

Proceeds from issuance of debt

—

 

 

200,000

 

Repayment of debt

(200,000)

 

 

—

 

Proceeds from exercise of stock-based compensation awards

90,519

 

 

65,371

 

Dividends paid

(267,956)

 

 

(220,764)

 

Repurchase of common stock

(464,518)

 

 

(1,016,300)

 

Other, net

(752)

 

 

(14,112)

 

Net cash used in financing activities

(955,207)

 

 

(873,305)

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

(2,121)

 

 

(998)

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

48,757

 

 

(42,079)

 

Cash and cash equivalents at beginning of year

96,645

 

 

138,724

 

Cash and cash equivalents at end of year

$

145,402

 

 

$

96,645