Leases
Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated balance sheets with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated balance sheets.
Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of uniform rental and facility services and other on the Company's consolidated statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease costs, including short-term lease expense and variable lease costs which were immaterial in each period, were $91.1 million, $83.2 million and $79.8 million for the fiscal years ended May 31, 2025, 2024 and 2023, respectively.
The following table provides supplemental information related to the Company's consolidated statements of cash flows for the fiscal years ended May 31:
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| (In thousands) | 2025 | | 2024 |
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| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 56,987 | | | $ | 51,790 | |
Operating lease right-of-use assets obtained in exchange for new and renewed
operating lease liabilities | $ | 84,629 | | | $ | 54,595 | |
| Operating lease right-of-use assets acquired in business combinations | $ | 3,077 | | | $ | 334 | |
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Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows at May 31:
| | | | | | | | | | | |
| 2025 | | 2024 |
| | | |
| Weighted-average remaining lease term - operating leases | 5.66 years | | 5.15 years |
| Weighted-average discount rate - operating leases | 4.08% | | 3.48% |
The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of May 31, 2025:
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| (In thousands) | | |
| | |
| 2026 | | $ | 58,688 | |
| 2027 | | 49,806 | |
| 2028 | | 43,559 | |
| 2029 | | 34,687 | |
| 2030 | | 24,673 | |
| Thereafter | | 48,152 | |
| Total payments | | 259,565 | |
| Less interest | | (30,083) | |
| Total present value of lease payments | | $ | 229,482 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.