SEC Comment Letter for CINTAS CORP (CTAS) (CIK 0000723254) (CTAS) — Feb 21, 2006
CINTAS CORP (CTAS) (CIK 0000723254)
Date: Feb. 21, 2006 · CIK: 0000723254 · Accession: 0000000000-06-008853
AI Filing Summary & Sentiment
Reasoning
Letter
February 21, 2006 By Facsimile and U.S. Mail Mr. Scott D. Farmer Chief Executive Officer Cintas Corporation 6800 Cintas Boulevard P.O. Box 625737 Cincinatti, Ohio 45262-5737
Re: Cintas Corporation Form 10-K for Fiscal Year Ended May 31, 2005 Filed August 15, 2005 File No. 0-11399
Dear Mr. Farmer:
We have reviewed the above referenced filing and have the following comments. Where indicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In our comments, we have asked you to provide us with information so we may better understand your disclosure. After reviewing this information, we may raise additional comments.
Please understand the purpose of our review is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Scott D. Farm er Cintas Corporation February 21, 2006 Page 2
Consolidated Statem ents of Incom e, page 26
1. Please advise or revise to state separately revenue from services and sales from products as well as the related costs. See Rule 5-03(b) of Regulation S-X.
Notes to Consolidated Financial Statem ents, page 30 3. Property and Equipm ent, page 34
2. Please tell us the am ount of capitalized interest expense in each of the last three annual fiscal periods, if any. Tell us how you determ ined the am ount of interest cost to be capitalized including the capitalization period, the average am ount of expenditures and the capitalization rate. In future filings please include your accounting policy for interest cost capitalization and the disclosure required by paragraph 21.b. of SFAS No. 34.
11. Stock Based Com pensation, page 38
3. You are required to disclose the particular term s for m odifications of outstanding awards, especially when vesting out-of-the-m oney options are accelerated in anticipation of adopting SFAS No. 123(R). Please disclose the specific facts and circum stances surrounding the recent accelerated vesting of certain em ployee stock options. Include if the recipients are em ployees or executive officers, the number of options affected, the original exercise price, the prim ary purpose for the m odification, the quantified im pact on pre-tax, non-cash com pensation expense in the future periods. See paragraph 47.f. of SFAS No. 123 and Section K of SAB 107. In your response please show us what your revised disclosure will look like.
13. Segm ent Inform ation, page 41
4. We note that your website lists 9 noticeably unique products and services. Tell us in more detail how you determ ined that aggregation into two reportable segm ents was appropriate in accordance with paragraph 17 of SFAS No. 131. Please focus your response on the sim ilarities of the econom ic characteristics of the aggregated businesses. In that regard, please provide us quantitative support for your assertions such as historical sales, m argin and operating prof it figures. W e will presum e that both the m ethods of distribution and the nature of the regulatory environm ent are sim ilar. Also, please tell us how you have satisfied the disclosure requirem ents of paragraph 38 of the Statem ent.
As appropriate, please am end your filing and respond to these com ments within 10 business days, or tell us when you will provide us with a response. You m ay wish to
Mr. Scott D. Farm er Cintas Corporation February 21, 2006 Page 3
provide us with m arked copies of the am endm ent to expedite our review. Detailed letters greatly facilitate our review. File your response on EDGAR as a correspondence file. Please understand that we m ay have additional com ments after reviewing your responses to our com ment.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing reviewed by the staff to be certain that they have provided all inform ation investors require for an inform ed decision. Since the com pany and its managem ent are in possession of all facts relating to a com pany’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have m ade.
In connection with responding to our com ment, please provide, in writing, a statem ent from the com pany acknowledging that:
the com pany is responsible for the adequacy and accuracy of the disclosure in the filing;
staff com ments or changes to disclosure in response to staff com ments do not foreclose the Com mission from taking any action with respect to the filing; and
the com pany m ay not assert staff com ments as a defense in any proceeding initiated by the Com mission or any person under the federal securities laws of the United States.
In addition, please be advised that the Division of Enforcem ent has access to all inform ation you provide to the staff of th e Division of Corporation Finance in our review of your filing or in response to our com ment on your filing.
You m ay contact Brian McAllister, Staff Accountant at (202) 551-3341, Donna Di Silvio at (202) 551-3202, or m e at (202) 551-3841 if you have any questions regarding the com ment on the financial statem ents and related m atters.
S incerely,
M ichael Moran Accounting Branch Chief
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Mail Stop 3561
February 21, 2006
By Facsimile and U.S. Mail
Mr. Scott D. Farmer
Chief Executive Officer
Cintas Corporation
6800 Cintas Boulevard
P.O. Box 625737
Cincinatti, Ohio 45262-5737
Re: Cintas Corporation
Form 10-K for Fiscal Year Ended May 31, 2005
Filed August 15, 2005
File No. 0-11399
Dear Mr. Farmer:
We have reviewed the above referenced filing and have the following comments.
Where indicated, we think you should revise your document in response to these
comments. If you disagree, we will consider your explanation as to why our comments
are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In our comments, we have asked you to provide us with information so we
may better understand your disclosure. After reviewing this information, we may raise
additional comments.
Please understand the purpose of our review is to assist you in your compliance
with the applicable disclosure requirements and to enhance the overall disclosure in your
filing. We look forward to working with you in these respects. We welcome any
questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Scott D. Farm er
Cintas Corporation
February 21, 2006
Page 2
Consolidated Statem ents of Incom e, page 26
1. Please advise or revise to state separately revenue from services and sales from
products as well as the related costs. See Rule 5-03(b) of Regulation S-X.
Notes to Consolidated Financial Statem ents, page 30
3. Property and Equipm ent, page 34
2. Please tell us the am ount of capitalized interest expense in each of the last three
annual fiscal periods, if any. Tell us how you determ ined the am ount of interest
cost to be capitalized including the capitalization period, the average am ount of
expenditures and the capitalization rate. In future filings please include your
accounting policy for interest cost capitalization and the disclosure required by
paragraph 21.b. of SFAS No. 34.
11. Stock Based Com pensation, page 38
3. You are required to disclose the particular term s for m odifications of outstanding
awards, especially when vesting out-of-the-m oney options are accelerated in
anticipation of adopting SFAS No. 123(R). Please disclose the specific facts and
circum stances surrounding the recent accelerated vesting of certain em ployee
stock options. Include if the recipients are em ployees or executive officers, the
number of options affected, the original exercise price, the prim ary purpose for
the m odification, the quantified im pact on pre-tax, non-cash com pensation
expense in the future periods. See paragraph 47.f. of SFAS No. 123 and Section
K of SAB 107. In your response please show us what your revised disclosure will
look like.
13. Segm ent Inform ation, page 41
4. We note that your website lists 9 noticeably unique products and services. Tell us
in more detail how you determ ined that aggregation into two reportable segm ents
was appropriate in accordance with paragraph 17 of SFAS No. 131. Please focus
your response on the sim ilarities of the econom ic characteristics of the aggregated
businesses. In that regard, please provide us quantitative support for your
assertions such as historical sales, m argin and operating prof it figures. W e will
presum e that both the m ethods of distribution and the nature of the regulatory
environm ent are sim ilar. Also, please tell us how you have satisfied the
disclosure requirem ents of paragraph 38 of the Statem ent.
As appropriate, please am end your filing and respond to these com ments within
10 business days, or tell us when you will provide us with a response. You m ay wish to
Mr. Scott D. Farm er
Cintas Corporation
February 21, 2006
Page 3
provide us with m arked copies of the am endm ent to expedite our review. Detailed letters
greatly facilitate our review. File your response on EDGAR as a correspondence file.
Please understand that we m ay have additional com ments after reviewing your responses
to our com ment.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing reviewed by the staff to be certain that they have provided all
inform ation investors require for an inform ed decision. Since the com pany and its
managem ent are in possession of all facts relating to a com pany’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have m ade.
In connection with responding to our com ment, please provide, in writing, a
statem ent from the com pany acknowledging that:
the com pany is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff com ments or changes to disclosure in response to staff com ments do not
foreclose the Com mission from taking any action with respect to the filing; and
the com pany m ay not assert staff com ments as a defense in any proceeding
initiated by the Com mission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of Enforcem ent has access to all
inform ation you provide to the staff of th e Division of Corporation Finance in our
review of your filing or in response to our com ment on your filing.
You m ay contact Brian McAllister, Staff Accountant at (202) 551-3341, Donna
Di Silvio at (202) 551-3202, or m e at (202) 551-3841 if you have any questions regarding
the com ment on the financial statem ents and related m atters.
S incerely,
M ichael Moran
Accounting Branch Chief