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Investments | 9 Months Ended
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Feb. 28, 2015
Investments, Debt and Equity Securities [Abstract] |
Investment | Investments Investments at February 28, 2015 of $445.5 million include an equity method investment in the Shred-it partnership of $330.2 million, other equity method investments of $16.2 million, the cash surrender value of insurance policies of $96.9 million and cost method investments of $2.2 million. Investments at May 31, 2014 of $458.4 million include an equity method investment in the Shred-it partnership of $341.4 million, other equity method investments of $29.7 million, the cash surrender value of insurance policies of $86.5 million and cost method investments of $0.8 million. Investments are evaluated for impairment on an annual basis or when indicators of impairment exist. For the three and nine months ended February 28, 2015 and 2014, no losses due to impairment were recorded. On April 30, 2014, Cintas completed its partnership transaction with the shareholders of Shred-it to combine Cintas’ document shredding business with Shred-it’s document shredding business. Under the agreement, Cintas and Shred-it each contributed its document shredding business to a newly formed partnership owned 42% by Cintas. The resulting equity method investment (Level 3) in the Shred-it partnership was initially recorded at fair value at $339.4 million derived with a primary reliance upon the income approach utilizing various discounted cash flow models. Fair value was determined by an independent valuation specialist. Management ultimately oversees the independent valuation specialist to ensure that the transaction-specific assumptions are appropriate for Cintas. The following table details quantitative information about significant unobservable inputs used in the initial valuation of Cintas' investment in the Shred-it partnership:
|  |  |  |  |  |  |  | Range
(Dollars in millions) |  | Fair Value at April 30, 2014 |  | Valuation Technique |  | Input |  | Low |  | High
Equity method investment - Shred-it partnership |  | $ | 339.4 |  |  | Discounted Cash Flow |  | EBITDA Margin |  | 20.0 | % |  | 22.0 | %
|  |  |  |  |  | Ratio of capital expenditures to revenues |  | 4.5 | % |  | 5.5 | %
|  |  |  |  |  | Long-term revenue growth |  | 1.5 | % |  | 2.0 | %
|  |  |  |  |  | WACC Rate |  | 9.0 | % |  | 9.0 | %
In the first quarter of fiscal 2015, Cintas received additional proceeds related to the contribution of the shredding business to the Shred-it partnership. The Company realized a pre-tax gain of $6.6 million as a result of the additional consideration received. During the three and nine months ended February 28, 2015, Cintas recorded a net loss on our investment in Shred-it of $6.8 million and $7.0 million, respectively. On June 30, 2014, Cintas sold stock in an equity method investment. In conjunction with the sale, Cintas also received a cash dividend of $5.2 million. Total cash received from the transaction was $35.2 million. The sale resulted in the recording of a gain, net of tax, of approximately $13.6 million in the nine months ended February 28, 2015. As a result, the Company no longer has the ability to exercise significant influence over the investee. Therefore, effective July 1, 2014, the remaining investment retained by Cintas is accounted for under the cost method.

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- Definition The entire disclosure for investments, including all tables. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 6 -Section 10 -Paragraph (c) -Subparagraph (1) + Details
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