Investments

Investments at May 31, 2014 of $458.4 million include the cash surrender value of insurance policies of $86.5 million, equity method investments of $371.1 million, and cost method investments of $0.8 million. Investments at May 31, 2013 of $101.5 million include the cash surrender value of insurance policies of $73.0 million, equity method investments of $27.6 million, and cost method investments of $0.9 million. During fiscal 2013, Cintas sold stock of an equity method investment for a gain of $8.5 million.

Investments are evaluated for impairment on an annual basis or when indicators of impairment exist. For fiscal 2014, 2013, and 2012, no losses due to impairment were recorded.

On April 30, 2014, Cintas completed its previously announced partnership transaction with the shareholders of Shred-it to combine Cintas’ document destruction business with Shred-it’s document destruction business. Under the agreement, Cintas and Shred-it each contributed its document destruction business to a newly formed partnership owned 42% by Cintas. The resulting equity method investment (Level 3) in Shred-it 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 Shred-it:



					Range
(Dollars in millions)	Fair Value at April 30, 2014		Valuation Technique	Input	Low		High
Equity method investment - Shred-it	$	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	%