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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2011
For the quarterly period ended March 31, 2012
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file numbers:

Reddy Ice Holdings, Inc. 001-32596
Reddy Ice Corporation 333-168190

REDDY ICE HOLDINGS, INC.
REDDY ICE CORPORATION
(Exact name of registrant as specified in its charter)


DELAWARE NEVADA (State or other jurisdiction of incorporation or organization)		56-2381368 75-2244985 (I.R.S. Employer Identification No.)

8750 N. CENTRAL EXPRESSWAY, SUITE 1800
DALLAS, TEXAS 75231
(Address of principal executive offices)

(214) 526-6740
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Reddy Ice Holdings, Inc.		Yes ý No o
Reddy Ice Corporation		Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). *The Registrants are not subject to the requirements of Rule 405 of Regulation S-T at this time.


Reddy Ice Holdings, Inc.		Yes ý No o
Reddy Ice Corporation		Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Reddy Ice Holdings, Inc. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company ý

Reddy Ice Corporation Large accelerated filer o Accelerated filer o Non-accelerated filer oý (Do not check if a smaller reporting company) Smaller reporting company ýo

Reddy Ice Corporation

Large accelerated filer o Accelerated filer o Non-accelerated filer ý (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Reddy Ice Holdings, Inc.		Yes o No ý
Reddy Ice Corporation		Yes o No ý

The number of shares of registrant's common stock outstanding as of ~~November~~May 811, ~~2011~~2012 was:

Reddy Ice Holdings, Inc.		23,~~402~~981,~~706~~343 shares of common stock
Reddy Ice Corporation		100 shares of common stock

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY REDDY ICE CORPORATION QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012

TABLE OF CONTENTS


~~PART I—FINANCIAL INFORMATION~~	PART I—FINANCIAL INFORMATION
Item 1.	Reddy Ice Holdings, Inc. Condensed Consolidated ~~and Reddy Ice Corporation Condensed~~ Financial Statements	2
	Reddy Ice Holdings, Inc. Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010 (unaudited)	2
	Reddy Ice Holdings, Inc. Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 (unaudited)	2
	Reddy Ice Holdings, Inc. Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and 2010 (unaudited)	3
	Reddy Ice Holdings, Inc. Condensed Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011 (unaudited)	3
	Reddy Ice Holdings, Inc. Condensed Consolidated Statement of Stockholders' Deficit for the nine months ended September 30, 2011 (unaudited)	4
	Reddy Ice Holdings, Inc. Condensed Consolidated Statement of Stockholders' Deficit for the three months ended March 31, 2012 (unaudited)	4
	Reddy Ice Holdings, Inc. Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 (unaudited)	5
	Reddy Ice Holdings, Inc. Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (unaudited)	5
	Reddy Ice Corporation Condensed Balance Sheets as of September 30, 2011 and December 31, 2010 (unaudited)	6
	Reddy Ice Corporation Condensed Balance Sheets as of March 31, 2012 and December 31, 2011 (unaudited)	6
	Reddy Ice Corporation Condensed Statements of Operations for the three and nine months ended September 30, 2011 and 2010 (unaudited)	7
	Reddy Ice Corporation Condensed Statements of Operations for the three months ended March 31, 2012 and 2011 (unaudited)	7
	Reddy Ice Corporation Condensed Statement of Stockholder's Deficit for the nine months ended September 30, 2011 (unaudited)	8
	Reddy Ice Corporation Condensed Statement of Stockholder's Deficit for the three months ended March 31, 2012 (unaudited)	8
	Reddy Ice Corporation Condensed Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 (unaudited)	9
	Reddy Ice Corporation Condensed Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (unaudited)	9
	Notes to condensed consolidated and Reddy Ice Corporation condensed financial statements for the three and nine months ended September 30, 2011 and 2010 (unaudited)	10
	Notes to condensed consolidated and Reddy Ice Corporation condensed financial statements for the three months ended March 31, 2012 and 2011 (unaudited)	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3235
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5159
Item 4.	Controls and Procedures	5259
~~PART II—OTHER INFORMATION~~	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	5461
Item 1A.	Risk Factors	5664
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5664
Item 3.	Defaults Upon Senior Securities	5764
Item 4.	~~(Removed~~Mine ~~and~~Safety ~~Reserved)~~Disclosures	5764
Item 5.	Other Information	5764
Item 6.	Exhibits	5764
SIGNATURES		5865
INDEX TO EXHIBITS		5966

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

				September 30, 2011			December 31, 2010
		March 31, 2012			December 31, 2011
		(in thousands, except share data)		~~(in thousands, except share data)~~
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	~~Cash and cash equivalents~~	$	5,390	$	~~10,802~~$	9,944	$	~~42,173~~
Accounts receivable, net	~~Accounts receivable, net~~		24,134		~~44,416~~	26,293		~~21,432~~
Notes receivable from affiliate	~~Notes receivable from affiliate~~		1,110		~~1,999~~	1,973		—
Inventories, parts and supplies	~~Inventories, parts and supplies~~		12,528		~~12,943~~	12,551		~~12,549~~
Prepaid expenses and other current assets	~~Prepaid expenses and other current assets~~		11,883		~~5,214~~	4,395		~~3,849~~
Assets held for sale	~~Assets held for sale~~		1,937		~~2,201~~	2,084		~~1,056~~
Deferred tax assets	~~Deferred tax assets~~		1,295		~~1,395~~	1,844		~~716~~
Total current assets		~~Total current assets~~	58,277		~~78,970~~	59,084		~~81,775~~
RESTRICTED CASH			10,892		~~13,107~~	13,024		~~10,110~~
PROPERTY AND EQUIPMENT, net			179,618		~~189,817~~	185,841		~~204,898~~
GOODWILL			87,036		~~86,876~~	87,036		~~83,368~~
OTHER INTANGIBLES, net			70,338		~~73,448~~	71,926		~~72,204~~
INVESTMENTS			7,357		~~7,357~~	7,357		~~6,318~~
OTHER ASSETS, net			1,162		~~11,372~~	9,761		~~12,252~~
TOTAL		$	414,680	$	~~460,947~~$	434,029	$	~~470,925~~
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Current portion of long-term obligations	~~Current portion of long-term obligations~~	$	450,733	$	1$	450,705	$	1
Revolving credit facility	~~Revolving credit facility~~		50,000		~~14,500~~	20,700		—
Accounts payable	~~Accounts payable~~		16,778		~~21,427~~	18,578		~~15,290~~
Accrued expenses	~~Accrued expenses~~		22,568		~~24,949~~	26,639		~~24,177~~
Total current liabilities		~~Total current liabilities~~	540,079		~~60,877~~	516,622		~~39,468~~
LONG-TERM OBLIGATIONS			99		~~450,775~~	100		~~450,690~~
DEFERRED TAXES AND OTHER LIABILITIES, net			15,262		~~13,615~~	14,105		~~10,560~~
COMMITMENTS AND CONTINGENCIES (Note 13)					—			—
COMMITMENTS AND CONTINGENCIES (Note 12)			—			—
STOCKHOLDERS' DEFICIT:
Preferred stock: 25,000,000 share authorized; no shares issued or outstanding	~~Preferred stock: 25,000,000 share authorized; no shares issued or outstanding~~		—		—	—		—
	Common stock, $0.01 par value; 75,000,000 shares authorized; 23,402,706 and 22,962,000 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively				234			230
Common stock, $0.01 par value; 75,000,000 shares authorized; 23,982,010 and 23,402,706 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively			240			234
Additional paid-in capital	~~Additional paid-in capital~~		228,028		~~226,832~~	227,654		~~225,208~~
Accumulated deficit	~~Accumulated deficit~~		(369,028	)	~~(291,386~~	)(324,686	)	~~(255,231~~	)
Total stockholders' deficit		~~Total stockholders' deficit~~	(140,760	)	~~(64,320~~	)(96,798	)	~~(29,793~~	)
TOTAL		$	414,680	$	~~460,947~~$	434,029	$	~~470,925~~

See notes to condensed consolidated financial statements.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY ~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)~~

		Three Months Ended September 30,						Nine Months Ended September 30,
		2011			2010			2011			2010
		(in thousands, except per share amounts)
Revenues		$	126,330		$	120,147		$	273,575		$	260,204
Cost of sales (excluding depreciation)			77,800			71,770			181,793			168,787
Depreciation expense related to cost of sales			7,819			5,694			23,007			16,655
Gross profit			40,711			42,683			68,775			74,762
Operating expenses			14,725			14,358			41,839			41,850
Depreciation and amortization expense			2,249			2,435			7,233			6,484
Loss on dispositions of assets			629			1,035			461			2,432
Impairment of long-lived assets			1,971			514			2,741			750
Acquisition expenses			1,664			414			4,111			624
Gain on contingent acquisition consideration			(202	)		—			(202	)		—
Cost (insurance recoveries) related to antitrust investigations and related litigation (Note 13)			785			(3,867	)		2,937			(1,824	)
Income from operations			18,890			27,794			9,655			24,446
Interest expense			(14,698	)		(14,099	)		(43,873	)		(35,678	)
Interest income			4			3			12			15
Gain on bargain purchase			—			264			—			264
Debt refinance costs			—			(310	)		—			(6,478	)
Income (loss) before income taxes			4,196			13,652			(34,206	)		(17,431	)
Income tax benefit (expense)			696			(4,662	)		(1,949	)		5,956
Net income (loss)		$	4,892		$	8,990		$	(36,155	)	$	(11,475	)
Basic net income (loss) per share:
	Net income (loss)	$	0.21		$	0.39		$	(1.59	)	$	(0.51	)
	Weighted average common shares outstanding		23,394			22,949			22,742			22,450
Diluted net income (loss) per share:
	Net income (loss)	$	0.21		$	0.39		$	(1.59	)	$	(0.51	)
	Weighted average common shares outstanding		23,466			23,058			22,742			22,450

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,

	2012			2011
	(in thousands, except per share amounts)
Revenues	$	44,281		$	40,752
Cost of sales (excluding depreciation)		39,414			37,225
Depreciation expense related to cost of sales		6,961			7,708

Gross loss		(2,094	)		(4,181	)
Operating expenses		14,020			12,799
Depreciation and amortization expense		2,441			2,530
Loss (gain) on dispositions of assets		2			(54	)
Acquisition expenses		221			603
Impairment of long-lived assets		31			231
Gain on contingent acquisition consideration		(100	)		—
Cost related to antitrust investigations and related litigation (Note 12)		1,762			1,421
Restructuring costs		559			—

Loss from operations		(21,030	)		(21,711	)
Interest expense		(14,979	)		(14,349	)
Interest income		3			4
Reorganization costs		(3,837	)		—
Debt refinance costs		(2,531	)		—

Loss before income taxes		(42,374	)		(36,056	)
Income tax expense		(1,968	)		(3,045	)

Net loss	$	(44,342	)	$	(39,101	)

Total comprehensive loss	$	(44,342	)	$	(39,101	)

Basic and diluted net loss per share:
Net loss	$	(1.92	)	$	(1.72	)

Weighted average common shares outstanding		23,082			22,689

See notes to condensed consolidated financial statements.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY ~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited)~~

		Common Stock
		Number of Shares			Par Value		Additional Paid-In Capital			Accumulated Deficit			Total
							(in thousands)
Balance at January 1, 2011			22,962		$	230	$	225,208		$	(255,231	)	$	(29,793	)
Compensation expense related to stock-based awards			—			—		1,612			—			1,612
Issuance of restricted stock			344			3		(3	)		—			—
Forfeiture of restricted stock			(26	)		—		—			—			—
Vesting of restricted stock units			20			—		—			—			—
Issuance of vested shares to directors			96			1		(1	)		—			—
Common stock issued upon exercise of stock options			7			—		16			—			16
Comprehensive loss:
	Net loss		—			—		—			(36,155	)		(36,155	)
	Total comprehensive loss													(36,155	)
Balance at September 30, 2011			23,403		$	234	$	226,832		$	(291,386	)	$	(64,320	)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

(Unaudited)

	Common Stock

	Number of Shares			Par Value		Additional Paid-In Capital			Accumulated Deficit			Total
						(in thousands)
Balance at January 1, 2012		23,403		$	234	$	227,654		$	(324,686	)	$	(96,798	)
Compensation expense related to stock-based awards		—			—		383			—			383
Issuance of restricted stock		595			6		(6	)		—			—
Forfeiture of restricted stock		(5	)		—		—			—			—
Repurchase and retirement of common stock		(11	)		—		(3	)		—			(3	)
Net loss		—			—		—			(44,342	)		(44,342	)

Balance at March 31, 2012		23,982		$	240	$	228,028		$	(369,028	)	$	(140,760	)

See notes to condensed consolidated financial statements.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

					Nine Months Ended September 30,
		Three Months Ended March 31,
					2011			2010
		2012			2011
		(in thousands)			~~(in thousands)~~
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	~~Net loss~~	$	(44,342	)	$	(3639,~~155~~101	)	$	~~(11,475~~	)
Adjustments to reconcile net loss to net cash used in operating activities (excluding working capital from acquisitions):	~~Adjustments to reconcile net loss to net cash used in operating activities (excluding working capital from acquisitions):~~
Depreciation and amortization expense		~~Depreciation and amortization expense~~	9,402			3010,~~240~~238			~~23,139~~
Amortization of debt issue costs and accretion of tender premium		~~Amortization of debt issue costs and accretion of tender premium~~	760			~~2,281~~755			~~1,946~~
		Gain on bargain purchase				—			(264	)
Debt refinance costs			2,531			—
		Debt refinance costs				—			6,478
Deferred tax expense			1,950			3,021
		Deferred tax expense (benefit)				1,545			(6,153	)
Loss (gain) on dispositions of assets			2			(54	)
		Loss on dispositions of assets				461			2,432
Increase in fair value of diesel hedge			(152	)		(16	)
		Decrease in fair value of diesel hedge				245			—
Impairment of long-lived assets			31			231
		Impairment of long-lived assets				2,741			750
Stock-based compensation expense			383			631
		Stock-based compensation expense				1,804			1,423
Gain on contingent acquisition consideration			(100	)		—
		Gain on contingent acquisition consideration				(202	)		—
Change in working capital:
		Change in working capital:
Accounts receivable			2,351			(936	)
			Accounts receivable			(23,027	)		(14,476	)
Inventory, parts and supplies			23			(1,031	)
			Inventory, parts and supplies			298			(452	)
Prepaid expenses and other current assets			101			10
			Prepaid expenses and other current assets			(2,150	)		(1,358	)
Accounts payable, accrued expenses and other			(5,120	)		(3,811	)
			Accounts payable, accrued expenses and other			4,589			16,515
Net cash used in operating activities			(32,180	)		(30,063	)
	Net cash (used in) provided by operating activities					(17,330	)		18,505
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions			(1,460	)		(3,821	)
	Property and equipment additions					(13,163	)		(28,190	)
Proceeds from dispositions of property and equipment			157			75
	Proceeds from dispositions of property and equipment					687			490
Cost of equipment sold to affiliate			(1,380	)		—
	Cost of equipment placed under operating leases					(1,766	)		(4,002	)
Reimbursement of the cost of equipment sold to affiliate			1,380			—
	Reimbursement of the cost of equipment placed under operating leases					3,074			6,002
Cost of acquisitions, net of cash acquired			—			(8,395	)
	Cost of equipment sold to affiliate					(639	)		—
Other intangible assets additions			(2	)		(8	)
	Reimbursement of the cost of equipment sold to affiliate					639			—
Decrease (increase) in restricted cash			2,131			(81	)
	Cost of acquisitions, net of cash acquired					(13,339	)		(12,637	)
Purchase of investments			—			(675	)
	Other intangible assets additions					(14	)		(189	)
Net cash provided by (used in) investing activities			826			(12,905	)
	Increase in restricted cash					(2,997	)		(10,340	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Purchase of investments					(1,039	)		(3,225	)
Proceeds from the exercise of employee stock options			—			16
	Net cash used in investing activities					(28,557	)		(52,091	)
Borrowings under the credit facility			70,000			14,200
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under the credit facility			(40,700	)		(2,200	)
	Proceeds from the exercise of employee stock options					16			17
Debt issuance costs			(2,500	)		—
	Borrowings under the credit facility					115,425			—
Net cash provided by financing activities			26,800			12,016
	Repayments under the credit facility					(100,925	)		—
NET DECREASE IN CASH AND CASH EQUIVALENTS			(4,554	)		(30,952	)
	Issuance of debt					—			300,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			9,944			42,173
	Debt issuance costs					—			(18,281	)
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	5,390		$	11,221
	Repayment of long-term obligations					—			(240,001	)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Net cash provided by financing activities					14,516			41,735
Cash payments for interest		$	17,741		$	16,972
NET DECREASE IN CASH AND CASH EQUIVALENTS						(31,371	)		8,149
Cash receipts of interest income		$	(3	)	$	(4	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						42,173			44,649
Cash receipts for income taxes		$	(20	)	$	(8	)
CASH AND CASH EQUIVALENTS, END OF PERIOD					$	10,802		$	52,798
Issuance (collection) of notes receivable—affiliate		$	864		$	—
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Noncash short-term financing		$	(864	)	$	—
	Cash payments for interest				$	44,673		$	24,327
Additions to property and equipment included in accounts payable		$	2,389		$	2,016
	Cash receipts of interest income				$	12		$	15
	Cash payments for income taxes, net				$	458		$	543
	Issuance of notes receivable—affiliate				$	(1,999	)		—
	Noncash short-term financing				$	1,999			—
	Additions to property and equipment included in accounts payable				$	2,860		$	663

See notes to condensed consolidated financial statements.

Table of Contents

REDDY ICE CORPORATION

CONDENSED BALANCE SHEETS

(Unaudited)

				September 30, 2011			December 31, 2010
		March 31, 2012			December 31, 2011
		(in thousands, except share data)		~~(in thousands, except share data)~~
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	~~Cash and cash equivalents~~	$	5,390	$	~~2,158~~$	1,106	$	~~30,153~~
Accounts receivable, net	~~Accounts receivable, net~~		24,134		~~44,416~~	26,293		~~21,432~~
Accounts receivable from Parent	~~Accounts receivable from Parent~~		189		41	16		19
Notes receivable from affiliate	~~Notes receivable from affiliate~~		1,110		~~1,999~~	1,973		—
Inventories, parts and supplies	~~Inventories, parts and supplies~~		12,528		~~12,943~~	12,551		~~12,549~~
Prepaid expenses and other current assets	~~Prepaid expenses and other current assets~~		11,883		~~5,214~~	4,395		~~3,849~~
Assets held for sale	~~Assets held for sale~~		1,937		~~2,201~~	2,084		~~1,056~~
Deferred tax assets	~~Deferred tax assets~~		1,312		~~1,395~~	2,067		~~716~~
Total current assets		~~Total current assets~~	58,483		~~70,367~~	50,485		~~69,774~~
RESTRICTED CASH			10,892		~~13,107~~	13,024		~~10,110~~
PROPERTY AND EQUIPMENT, net			179,618		~~189,817~~	185,841		~~204,898~~
GOODWILL			87,036		~~86,876~~	87,036		~~83,368~~
OTHER INTANGIBLES, net			70,338		~~73,448~~	71,926		~~72,204~~
INVESTMENTS			7,357		~~7,357~~	7,357		~~6,318~~
OTHER ASSETS, net			1,129		~~11,310~~	9,714		~~12,149~~
TOTAL		$	414,853	$	~~452,282~~$	425,383	$	~~458,821~~
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Current portion of long-term obligations	~~Current portion of long-term obligations~~	$	438,997	$	1$	438,969	$	1
Revolving credit facility	~~Revolving credit facility~~		50,000		~~14,500~~	20,700		—
	Accounts payable				20,990			14,375
Note payable to Parent			8,380			—
	Accrued expenses				25,128			24,665
Accounts payable			13,876			16,810
		Total current liabilities			60,619			39,041
Accrued expenses			22,834			27,127
LONG-TERM OBLIGATIONS					439,039			438,954
Total current liabilities			534,087			503,606
DEFERRED TAXES AND OTHER LIABILITIES, net					22,351			32,344
LONG-TERM OBLIGATIONS			99			100
COMMITMENTS AND CONTINGENCIES (Note 13)					—			—
DEFERRED TAXES AND OTHER LIABILITIES, net			15,085			14,009
STOCKHOLDER'S DEFICIT:
COMMITMENTS AND CONTINGENCIES (Note 12)			—			—
	Common stock, $0.01 par value; 1,000 shares authorized; 100 shares issued and outstanding at September 30, 2011 and December 31, 2010				—			—
STOCKHOLDER'S DEFICIT:
	Additional paid-in capital				308,032			306,420
Common stock, $0.01 par value; 1,000 shares authorized; 100 shares issued and outstanding at March 31, 2012 and December 31, 2011			—			—
	Accumulated deficit				(377,759	)		(357,938	)
Additional paid-in capital			309,237			308,854
		Total stockholder's deficit			(69,727	)		(51,518	)
Accumulated deficit			(443,655	)		(401,186	)
TOTAL				$	452,282		$	458,821
Total stockholder's deficit			(134,418	)		(92,332	)
TOTAL		$	414,853		$	425,383

See notes to condensed financial statements.

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REDDY ICE CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2011			2010			2011			2010
	2012			2011
	(in thousands)
Revenues	$	~~126~~44,~~330~~281		$	~~120~~40,~~147~~752		$	~~273,575~~		$	~~260,204~~
Cost of sales (excluding depreciation)		7739,~~800~~414			7137,~~770~~225			~~181,793~~			~~168,787~~
Depreciation expense related to cost of sales		76,~~819~~961			57,~~694~~708			~~23,007~~			~~16,655~~
Gross profit		40,711			42,683			68,775			74,762
Gross loss		(2,094	)		(4,181	)
Operating expenses		14,~~725~~020			1412,~~358~~799			~~41,839~~			~~41,850~~
Depreciation and amortization expense		2,~~249~~441			2,~~435~~530			~~7,233~~			~~6,484~~
Loss on dispositions of assets		629			1,035			461			2,432
Loss (gain) on dispositions of assets		2			(54	)
Impairment of long-lived assets		1,971			514			2,741			750
Acquisition expenses		221			603
Acquisition expenses		1,664			414			4,111			624
Impairment of long-lived assets		31			231
Gain on contingent acquisition consideration		(~~202~~100	)		—			~~(202~~	)		—
Income from operations		19,675			23,927			12,592			22,622
Restructuring costs		559			—
Interest expense		(14,377	)		(13,776	)		(42,907	)		(31,582	)
Loss from operations		(19,268	)		(20,290	)
Interest income		4			3			12			14
Interest expense		(14,742	)		(14,026	)
Gain on bargain purchase		—			264			—			264
Interest income		3			4
Debt refinance costs		—			(310	)		—			(6,478	)
Reorganization costs		(3,837	)		—
Income (loss) before income taxes		5,302			10,108			(30,303	)		(15,160	)
Debt refinance costs		(2,531	)		—
Income tax (expense) benefit		(2,014	)		(3,511	)		11,100			4,991
Loss before income taxes		(40,375	)		(34,312	)
Net income (loss)	$	3,288		$	6,597		$	(19,203	)	$	(10,169	)
Income tax (expense) benefit		(2,094	)		12,744
Net loss	$	(42,469	)	$	(21,568	)
Total comprehensive loss	$	(42,469	)	$	(21,568	)

See notes to condensed financial statements.

Table of Contents

REDDY ICE CORPORATION

CONDENSED STATEMENT OF STOCKHOLDER'S DEFICIT

(Unaudited)

		Common Stock	~~Common Stock~~
		Number of Shares	~~Number of Shares~~		Par Value	~~Par Value~~		Additional Paid-In Capital	~~Additional Paid-In Capital~~		Accumulated Deficit	~~Accumulated Deficit~~		Total	~~Total~~
					(in thousands)				~~(in thousands)~~
Balance at January 1, 2011				—		$	—		$	306,420		$	(357,938	)	$	(51,518	)
Balance at January 1, 2012			—		$	—		$	308,854		$	(401,186	)	$	(92,332	)
Compensation expense related to stock-based awards			—	—		—	—		383	~~1,612~~		—	—		383	~~1,612~~
Dividend to Parent				—			—			—			(618	)		(618	)
Net loss			—			—			—			(42,469	)		(42,469	)
Comprehensive loss:
Balance at March 31, 2012			—		$	—		$	309,237		$	(443,655	)	$	(134,418	)
	Net loss			—			—			—			(19,203	)		(19,203	)
	Total comprehensive loss															(19,203	)
Balance at September 30, 2011				—		$	—		$	308,032		$	(377,759	)	$	(69,727	)

See notes to condensed financial statements.

Table of Contents

REDDY ICE CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

					Nine Months Ended September 30,
		Three Months Ended March 31,
					2011			2010
		2012			2011
		(in thousands)			~~(in thousands)~~
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	~~Net loss~~	$	(42,469	)	$	(1921,~~203~~568	)	$	~~(10,169~~	)
Adjustments to reconcile net loss to net cash used in operating activities (excluding working capital from acquisitions):	~~Adjustments to reconcile net loss to net cash used in operating activities (excluding working capital from acquisitions):~~
Depreciation and amortization expense		~~Depreciation and amortization expense~~	9,402			3010,~~240~~238			~~23,139~~
Amortization of debt issue costs and accretion of tender premium		~~Amortization of debt issue costs and accretion of tender premium~~	423			~~1,272~~418			~~1,768~~
		Gain on bargain purchase				—			(264	)
Debt refinance costs			2,531			—
		Debt refinance costs				—			6,478
Deferred tax expense (benefit)			2,076			(12,768	)
		Deferred tax benefit				(11,503	)		(5,189	)
Loss (gain) on dispositions of assets			2			(54	)
		Loss on dispositions of assets				461			2,432
Increase in fair value of diesel hedge			(152	)		(16	)
		Decrease in fair value of diesel hedge				245			—
Impairment of long-lived assets			31			231
		Impairment of long-lived assets				2,741			750
Stock-based compensation expense			383			631
		Stock-based compensation expense				1,804			1,423
Gain on contingent acquisition consideration			(100	)		—
		Gain on contingent acquisition consideration				(202	)		—
Change in working capital:
		Change in working capital:
Accounts receivable			2,351			(936	)
			Accounts receivable			(23,027	)		(21,076	)
Inventory, parts and supplies			23			(1,031	)
			Inventory, parts and supplies			298			(452	)
Prepaid expenses and other current assets			101			10
			Prepaid expenses and other current assets			(2,150	)		(1,358	)
Accounts payable, accrued expenses and other			(6,323	)		(3,813	)
			Accounts payable, accrued expenses and other			5,704			18,390
Net cash used in operating activities			(31,721	)		(28,658	)
	Net cash (used in) provided by operating activities					(13,320	)		15,872
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions			(1,460	)		(3,821	)
	Property and equipment additions					(13,163	)		(28,190	)
Proceeds from dispositions of property and equipment			157			75
	Proceeds from dispositions of property and equipment					687			490
Cost of equipment sold to affiliate			(1,380	)		—
	Cost of equipment placed under operating leases					(1,766	)		(4,002	)
Reimbursement of the cost of equipment sold to affiliate			1,380			—
	Reimbursement of the cost of equipment placed under operating leases					3,074			6,002
Cost of acquisitions, net of cash acquired			—			(8,395	)
	Cost of equipment sold to affiliate					(639	)		—
Other intangible assets			(2	)		(8	)
	Reimbursement of the cost of equipment sold to affiliate					639			—
Decrease (increase) in restricted cash			2,131			(81	)
	Cost of acquisitions, net of cash acquired					(13,339	)		(12,637	)
Purchase of investments			—			(675	)
	Other intangible assets additions					(14	)		(189	)
Net cash provided by (used in) investing activities			826			(12,905	)
	Increase in restricted cash					(2,997	)		(10,340	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Purchase of investments					(1,039	)		(3,225	)
Borrowings under the credit facility			70,000			14,200
	Net cash used in investing activities					(28,557	)		(52,091	)
Repayments under the credit facility			(40,700	)		(2,200	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt			8,576			—
	Dividends to Parent					(618	)		(6,038	)
Debt issuance costs			(2,500	)		—
	Borrowings under the credit facility					115,425			—
Repayment of debt			(197	)		—
	Repayments under the credit facility					(100,925	)		—
Net cash provided by financing activities			35,179			12,000
	Issuance of debt					—			300,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			4,284			(29,563	)
	Debt issuance costs					—			(18,281	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			1,106			30,153
	Repayment of long-term obligations					—			(240,001	)
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	5,390		$	590
	Net cash provided by financing activities					13,882			35,680
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
NET DECREASE IN CASH AND CASH EQUIVALENTS						(27,995	)		(539	)
Cash payments for interest		$	17,741		$	16,972
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						30,153			40,440
Cash receipts of interest income		$	(3	)	$	(4	)
CASH AND CASH EQUIVALENTS, END OF PERIOD					$	2,158		$	39,901
Cash receipts for income taxes		$	(20	)	$	(8	)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Issuance (collection) of notes receivable—affiliate		$	864		$	—
	Cash payments for interest				$	44,057		$	18,377
Noncash short-term financing		$	(864	)	$	—
	Cash receipts of interest income				$	12		$	13
Additions to property and equipment included in accounts payable		$	2,389		$	2,016
	Cash payments for income taxes, net				$	458		$	543
	Issuance of notes receivable—affiliate				$	(1,999	)		—
	Noncash short-term financing				$	1,999			—
	Additions to property and equipment included in accounts payable				$	2,860		$	663

See notes to condensed financial statements.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

1. General

Reddy Ice Holdings, Inc. ("Reddy Holdings"), and its wholly-owned subsidiary, Reddy Ice Corporation ("Reddy Corp"), referred to collectively as the "Company", ~~manufacture~~manufactures and ~~distribute~~distributes packaged ice products. The Company consists of a single operating segment. The common stock of Reddy Holdings is publicly traded on the ~~New~~OTC ~~York~~electronic ~~Stock~~interdealer ~~Exchange~~quotation ~~under~~system ("OTCBB") and the ~~ticker~~OTCQBTM Marketplace ("OTCQB") under the symbol "~~FRZ~~RDDYQ".

This Quarterly Report on Form 10-Q is a combined report of the Company and Reddy Corp. The condensed consolidated financial statements of the Company and the condensed financial statements of Reddy Corp included herein are unaudited; however, balance sheets as of December 31, ~~2010~~2011 have been derived from the audited financial statements for that date, but do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements have been prepared by the Company pursuant to the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Under the SEC's regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. All significant intercompany balances and transactions have been eliminated upon consolidation, and all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made and are of a normal and recurring nature. The financial statements included herein should be read in conjunction with the consolidated and Reddy Corp financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011. The notes to the condensed consolidated financial statements apply to both the Company and Reddy Corp. Reddy Corp comprises all or substantially all of the Company's consolidated balances or activities unless otherwise noted. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2011~~2012 are not necessarily indicative of the results to be achieved for the full year.

Due to 2deterioration in our business related principally to price declines driven by industry competition across our markets, and coupled with broader economic instability and rising commodity prices, we experienced significant net losses in 2011 and 2010. ~~Recently~~Our ~~Adopted~~financial ~~Accounting~~results ~~Pronouncements~~ are also burdened by high interest costs resulting from our highly leveraged capital structure. These factors and uncertainty in our ability to generate sufficient liquidity to meet our future obligations in a timely manner have caused management to conclude that there is substantial doubt regarding our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business.

In ~~September~~Restructuring of 2011, the FASB issued ASU 2011-08, Intangibles—Goodwill and Other. ASU 2011-08 modifies the goodwill impairment test by allowing for an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on this assessment, the entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the entity may bypass performing the two-step goodwill impairment test. However, if the entity concludes otherwise, it is required to perform Step 1 of the two-step goodwill impairment test. ASU 2011-08 will be effective for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 is not expected to have a material effect on the Company's consolidated financial statements. Transactions

~~In June~~We have a substantial amount of ~~2011~~debt, ~~the~~as ~~FASB~~discussed ~~issue~~more ~~ASU~~fully ~~2011-05,~~in ~~Comprehensive Income~~Note 6. ~~ASU~~We ~~2011-05~~have ~~requires~~commenced ~~that~~a ~~all~~series of restructuring ~~non-owner~~transactions ~~changes~~(the "Restructuring") in ~~stockholders'~~order ~~equity~~to beaddress ~~presented~~our ~~either~~over-leveraged incapital astructure ~~single~~and ~~continuous~~position ~~statement~~our ofcompany ~~comprehensive~~to ~~income~~pursue ora instrategic ~~two~~acquisition ~~separate~~of ~~but~~substantially ~~consecutive~~all ~~statements.~~of In the ~~two-statement~~businesses ~~approach,~~and ~~the~~assets ~~first~~of ~~statement~~Arctic ~~should~~Glacier ~~present~~Income ~~total~~Fund ~~net income~~ and its ~~components~~subsidiaries ~~followed~~("Arctic"). byArctic ahas ~~second~~initiated ~~statement~~a ~~that~~Sale ~~should~~and ~~present~~Investor ~~total~~Solicitation ~~other~~Process ~~comprehensive~~("SISP") ~~income,~~after ~~the components~~filing offor ~~other~~protection ~~comprehensive~~under ~~income, and~~ the Companies' ~~total~~Creditors ofArrangement ~~comprehensive~~Act ~~income.~~in ~~ASU~~Canada ~~2011-05~~and ~~will~~Chapter 15 beof ~~effective~~the ~~for~~Bankruptcy ~~fiscal~~Code ~~years,~~in ~~and~~the ~~interim~~United States.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

21. ~~Recently~~General ~~Adopted Accounting Pronouncements~~ (Continued)

~~periods~~ On ~~within~~March 28, ~~those years~~2012, ~~beginning~~we ~~after~~submitted ~~December~~a non-binding letter of intent to Arctic regarding participation in the SISP. On April 155, ~~2011.~~2012, ~~The~~we ~~adoption~~were ofadvised ~~ASU~~by ~~2011-05~~the isfinancial adviser ~~not~~to ~~expected~~Arctic that we are approved to ~~have~~move ato ~~material~~phase 2 ~~effect~~of onthe SISP. The successful bidder will be selected at the ~~Company's~~end ~~consolidated~~of ~~financial statements~~phase 2 of the SISP.

In ~~December~~order ~~2010,~~to consummate all of the ~~FASB~~components ~~issued~~of ~~ASU~~the ~~2010-28~~Restructuring, ~~Intangibles—Goodwill~~including ~~and~~entering ~~Other.~~into ~~ASU~~the ~~2010-28~~DIP ~~modifies Step~~Credit 1Facility, ofamending the ~~goodwill~~First ~~impairment~~Lien ~~test~~Notes, ~~for~~exchanging ~~reporting~~the ~~units~~Second ~~with~~Lien ~~zero~~Notes, cancelling orthe ~~negative~~Discount ~~carrying~~Notes, ~~amounts~~ and ~~offers~~consummating ~~guidance~~the onRights ~~when~~Offering, toon ~~perform~~April 11, ~~Step~~2012, 2we ofcommenced the ~~testing.~~solicitation ~~For~~of ~~those~~acceptances ~~reporting~~with ~~units,~~respect ~~an entity is required~~ to ~~perform~~a ~~Step~~pre-negotiated 2plan of reorganization (the ~~goodwill~~"Plan"). ~~impairment~~On ~~test~~April 12, if2012, itReddy isHoldings ~~more~~and ~~likely~~Reddy ~~than~~Corp ~~not~~filed ~~that~~voluntary abankruptcy ~~goodwill~~cases ~~impairment~~under ~~exists~~Chapter 11 ~~based~~of ~~upon~~the ~~factors~~U.S. ~~such~~Bankruptcy ~~as unanticipated~~Code ~~competition,~~ (the ~~loss~~"Bankruptcy ofCases") ~~key~~in the ~~personnel~~United ~~and~~States ~~adverse~~Bankruptcy ~~regulatory~~Court ~~changes. ASU 2010-28 is effective~~ for ~~fiscal~~the ~~years,~~Northern ~~and~~District ~~interim~~of ~~periods~~Texas ~~within~~(the ~~those~~"Bankruptcy ~~years, beginning after December 15, 2010~~Court"). ~~The~~Reddy ~~adoption~~Holdings ofand ~~ASU~~Reddy ~~2010-28~~Corp ~~did~~continue ~~not~~to ~~have~~operate atheir ~~material~~business ~~effect~~as "debtors-in-possession" onunder the ~~Company's~~jurisdiction ~~consolidated~~of ~~financial~~the ~~statements~~Bankruptcy Court.

InWith ~~December~~respect ~~2010,~~to the ~~FASB~~Plan, ~~issued~~we ~~ASU~~solicited ~~2010-29,~~acceptances ~~which~~from ~~updates~~only the ~~guidance~~holders inof ~~ASC~~the ~~805,~~First ~~Business~~Lien ~~Combinations~~Notes, tothe ~~clarify~~Second ~~that pro~~Lien ~~forma~~Notes ~~disclosures~~(and ~~should~~their berespective ~~presented~~guarantees), asthe ifDiscount aNotes ~~business~~and ~~combination~~certain other ~~occurred~~unsecured atcreditors ~~the~~of ~~beginning~~Reddy ofHoldings, although the ~~prior~~Plan ~~annual~~seeks ~~period~~Bankruptcy ~~for~~Court ~~purposes~~approval of ~~preparing~~recoveries ~~both~~to ~~the~~holders ~~current~~of ~~reporting~~other ~~period~~unsecured creditors and the ~~prior reporting~~Common ~~period~~Stock, ~~pro~~which ~~forma~~recoveries ~~financial~~will ~~information. These disclosures should~~ be provided ~~accompanied~~ by athe ~~narrative~~holders ~~description~~of ~~about~~ the ~~nature~~Second ~~and~~Lien ~~amount~~Notes. ofSupport ~~material,~~agreements ~~nonrecurring~~for ~~pro~~the ~~forma~~Plan ~~adjustments.~~have ~~ASU 2010-29~~been isexecuted ~~effective~~by ~~for~~a ~~business~~significant percentage ~~combinations~~of ~~consummated~~holders inof ~~periods~~the ~~beginning~~First ~~after~~Lien ~~December 15~~Notes, ~~2010,~~the ~~and~~Second isLien ~~required~~Notes toand bethe ~~applied~~Discount ~~prospectively~~Notes. asSuch ofsupport agreements require the ~~date~~holders of ~~adoption.~~the ~~The Company~~First ~~has~~Lien ~~reflected~~Notes, the ~~adoption~~Second ofLien ~~ASU~~Notes ~~2010-29~~and in the ~~disclosures~~Discount Notes ~~accompanying~~to, ~~the~~among ~~consolidated~~other ~~financial~~things, ~~statements~~vote to accept the Plan.

There can 3be no assurance that the Restructuring will be consummated on the terms contemplated above, or at all. ~~Acquisitions~~

No ~~acquisitions were completed during the three months ended September 30, 2011~~2. ~~Three~~Recently ~~acquisitions~~Adopted ~~were~~Accounting completed during the three months ended September 30, 2010. During the nine months ended September 30, 2011 and 2010, the Company completed nine and eleven acquisitions, respectively. The total purchase price was allocated to the acquired assets and assumed liabilities based upon estimates of their respective fair values as of the closing dates using valuations and other studies. Pronouncements

In June of 2011, the FASB issued ASU 2011-05, Comprehensive Income. ASU 2011-05 requires that all non-owner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. In December of 2011, the FASB issued ASU 2011-12, Comprehensive Income, deferring the effective date for amendments to the presentation of reclassifications of items out of accumulated other comprehensive income in ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12. The Company adopted ASU 2011-05 as of January 1, 2012 and updated the consolidated financial statements according to the requirements established by ASU 2011-05.

In September of 2011, the FASB issued ASU 2011-08, Intangibles—Goodwill and Other. ASU 2011-08 modifies the goodwill impairment test by allowing for an assessment of qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, based on this assessment, the entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the entity may bypass performing the two-step goodwill impairment test.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

32. ~~Acquisitions~~Recently Adopted Accounting Pronouncements (Continued)

~~The~~However, ~~following~~if ~~table summarizes~~ the ~~aggregate~~entity ~~purchase~~concludes ~~prices~~otherwise, ~~estimated~~it ~~aggregate~~is ~~fair~~required ~~values~~to perform Step 1 of the ~~assets~~two-step ~~acquired~~goodwill ~~and~~impairment ~~the~~test. ~~liabilities~~ASU ~~assumed~~2011-08 ~~and~~will ~~direct~~be ~~acquisition~~effective ~~costs~~for ~~expensed:~~fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material effect on the Company's consolidated financial statements.

		Three months ended September 30,					Nine months ended September 30,
		2011		2010			2011			2010
		(in millions)
Purchase price		$	—	$	3.5		$	13.3		$	12.6
Assets acquired:
	Inventory		—		0.1			0.7			0.4
	Property and equipment		—		1.6			3.8			4.1
	Other assets		—		—			0.2			—
	Goodwill		—		0.5			3.8			1.7
	Other intangible assets		—		1.6			6.1			6.7
	Total assets acquired		—		3.8			14.6			12.9
Total liabilities assumed			—		—			(1.3	)		—
Gain on bargain purchase			—		(0.3	)		—			(0.3	)
Direct acquisition costs expensed		$	1.7	$	0.4		$	4.1		$	0.6

3. Acquisitions

No acquisitions were completed during the three months ended March 31, 2012. During the ~~nine~~three months ended ~~September~~March 3031, 2011, the Company ~~recognized~~purchased ~~approximately~~eight ~~$10~~ice companies in connection with its ongoing acquisitions program.~~1 million~~ The total purchase price was allocated to the acquired assets and assumed liabilities based upon estimates of ~~revenue~~their ~~from~~respective fair values as of the closing ~~businesses~~dates ~~acquired~~using invaluations ~~2011~~and other studies. The following table summarizes the aggregate purchase prices, estimated aggregate fair values of the assets acquired and the liabilities assumed and direct acquisition costs expensed:

The recorded purchase price allocation related to the acquisition completed during the three months ended June 30, 2011 is preliminary at September 30, 2011, pending further evaluation of market participant data and the fair values of certain equipment acquired. The Company recorded approximately $0.7 million of deferred tax liabilities in connection with this acquisition. In addition, as a result of the acquisition made during the three months ended June 30, 2011, the Company entered into an earn-out agreement, pursuant to which the Company is obligated to pay the former stockholder of the acquired entity up to $0.8 million in additional consideration if certain revenue targets are achieved by the purchased entity during the twelve months immediately following the acquisition. As a result, the Company recorded a $0.4 million contingent liability during the six months ended June 30, 2011. The earn-out agreement is recorded at its fair value of $0.2 million at September 30, 2011. The fair value of the earn-out liability is estimated based on management's assessment of the weighted average probability that certain revenue targets will be achieved by the acquired entity.

	Three Months Ended March 31,

	2012		2011
	(in millions)
Purchase price	$	—	$	8.4
Assets acquired:
Inventory	$	—	$	0.1
Property and equipment		—		2.0
Goodwill		—		2.0
Other intangible assets		—		4.3

Total assets acquired	$	—	$	8.4
Liabilities assumed		—		—

Gain on bargain purchase	$	—	$	—

Direct acquisition costs expensed	$	0.2	$	0.6

The Company ~~recorded~~recognized approximately $1.9 million of tax deductible goodwill ~~recognized~~ in connection with the ~~acquisitions completed during the nine months ended September 30,~~ 2011 acquisitions. Other intangible assets were comprised of customer lists and non-compete agreements, which are being amortized over useful lives of 2 to 30 years~~, with a weighted average useful life of 21~~.~~4 years.~~ The acquisitions were funded out of the Company's operating cash flows, proceeds from debt offerings and borrowings under the ~~revolving~~New ~~credit~~Credit ~~facility~~Facility.

The Company recorded approximately $0.9 million of deferred tax liabilities in connection with an acquisition completed during the three months ended June 30, 2011. In addition, as a result of the acquisition made during the three months ended June 30, 2011, the Company entered into an earn-out agreement, pursuant to which the Company is obligated to pay the former stockholder of the acquired entity up to $0.8 million in additional consideration if certain revenue targets are achieved by the purchased entity during the twelve months immediately following the acquisition. As a result, the Company recorded a $0.4 million contingent liability at June 30, 2011. No contingent liability associated with the earn-out agreement is recorded as of March 31, 2012. The fair value of the earn-out liability is

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

3. Acquisitions (Continued)

~~The~~estimated ~~following~~based ~~unaudited~~on ~~pro~~management's ~~forma~~assessment ~~information~~of ~~presents~~ the ~~Reddy~~weighted ~~Holdings'~~average ~~consolidated~~probability ~~results~~that ofcertain ~~operations~~revenue ~~for~~targets will be achieved by the ~~three~~acquired ~~and~~entity. ~~nine~~The ~~months~~change ~~ended~~in ~~September 30,~~fair ~~2011~~value ~~and~~of the contingent ~~September 30,~~liability ~~2010~~is presented as if"Gain ~~the~~on ~~2011~~contingent ~~and~~acquisition ~~2010~~consideration" ~~acquisitions~~in ~~had~~the ~~all~~consolidated ~~occurred~~statements onof ~~January 1,~~operations. ~~2010:~~

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
	(in thousands, except per share amounts)
Pro forma revenues	$	126,330	$	128,660	$	274,838		$	279,703
Pro forma net income (loss)	$	4,892	$	11,214	$	(36,895	)	$	(8,551	)
Pro forma basic net income (loss) per share	$	0.21	$	0.49	$	(1.62	)	$	(0.38	)
Pro forma diluted net income (loss) per share	$	0.21	$	0.49	$	(1.62	)	$	(0.38	)

The following unaudited pro forma information presents the Reddy Holdings' consolidated results of operations for the three months ended March 31, 2012 and March 31, 2011 as if the 2011 acquisitions had all occurred on January 1, 2011:

The following unaudited pro forma information presents Reddy Corp's results of operations for the three and nine months ended September 30, 2011 and September 30, 2010 as if the 2011 and 2010 acquisitions had all occurred on January 1, 2010:

	Three Months Ended March 31,

	2012			2011
	(in thousands, except per share amounts)
Pro forma revenues	$	44,281		$	41,654
Pro forma net loss	$	(44,342	)	$	(39,749	)
Pro forma basic and diluted net loss per share	$	(1.92	)	$	(1.75	)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011			2010
	(in thousands)
Pro forma revenues	$	126,330	$	128,660	$	274,838		$	279,703
Pro forma net income (loss)	$	3,288	$	8,821	$	(19,943	)	$	(7,245	)

The following unaudited pro forma information presents Reddy Corp's results of operations for the three months ended March 31, 2012 and March 31, 2011 as if the 2011 acquisitions had all occurred on January 1, 2011:

	Three Months Ended March 31,

	2012			2011
	(in thousands, except per share amounts)
Pro forma revenues	$	44,281		$	41,654
Pro forma net loss	$	(42,469	)	$	(22,216	)

4. Inventories, Parts and Supplies

Inventories consist of raw materials, finished goods and parts and supplies. Raw materials represent ice packaging material. Finished goods consist of packaged ice. Parts and supplies consist of spare parts for production equipment and ice merchandisers and miscellaneous supplies. Inventories are valued at the lower of cost or market and include overhead allocations. Cost is determined using the first-in, first-out method.

			September 30, 2011			December 31, 2010
		March 31, 2012			December 31, 2011
		(in thousands)	~~(in thousands)~~
Raw materials		$	$5,537	~~6,198~~	$	$6,193	~~6,133~~
Finished goods			3,107	~~1,992~~		2,462	~~2,505~~
Parts and supplies			3,884	~~4,753~~		3,896	~~3,911~~
Total	~~Total~~	$	$12,528	~~12,943~~	$	$12,551	~~12,549~~

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

5. Accrued Expenses

			September 30, 2011			December 31, 2010
		March 31, 2012			December 31, 2011
		(in thousands)	~~(in thousands)~~
Accrued interest		$	$10,029	~~10,198~~	$	$13,552	~~13,336~~
Accrued compensation and employee benefits, including payroll taxes and workers compensation insurance			5,949	~~5,932~~		5,216	~~4,484~~
Accrued utilities			1,046	~~2,101~~		1,353	~~1,343~~
Accrued property, sales and other taxes			2,809	~~3,770~~		3,632	~~1,555~~
Other accrued insurance			1,618	~~1,653~~		1,691	~~2,169~~
Other			1,117	~~1,295~~		1,195	~~1,290~~
Total	~~Total~~	$	$22,568	~~24,949~~	$	$26,639	~~24,177~~

Included in "accrued interest" above isare $0.5 million and $0.2 million related to Reddy Holdings as of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, respectively.

6. Revolving Credit Facility and Long-Term Obligations

AtAs ~~September 30~~a result of the ongoing bankruptcy proceedings disclosed elsewhere in this document, ~~2011~~the Company has classified its borrowings under its 11.25% Senior Secured Notes, 13.25% Senior Secured Notes, 101/2% Senior Discount Notes and ~~December~~related unamortized debt issue costs as current. The debt issue costs are included in prepaid expenses and other current assets on the condensed consolidated balance sheet. The indentures governing these notes define bankruptcy as an event of default, the occurrence of which causes all outstanding obligations to become immediately due and payable. Under Section 31362 of the Bankruptcy Code, ~~2010~~the filing of voluntary bankruptcy petitions by the Company automatically stayed most actions against the Company, ~~long-term~~including ~~obligations~~most actions to collect indebtedness incurred prior to the filing of the Bankruptcy Cases. Accordingly, although the filing of the Bankruptcy Cases triggered defaults for substantially all of the Company's debt ~~consisted~~obligations (including the New Credit Facility, the First Lien Notes and the Second Lien Notes), creditors are stayed from taking any actions as a result of such defaults. Absent an order of the Bankruptcy ~~following:~~Court, substantially all of the Company's pre-petition liabilities are subject to settlement under the Plan.

		September 30, 2011			December 31, 2010
		(in thousands)
11.25% Senior Secured Notes		$	300,000		$	300,000
13.25% Senior Secured Notes			139,407			139,407
Less: Unamortized early tender premium on 13.25% Senior Secured Notes			(467	)		(553	)
101/2% Senior Discount Notes			11,736			11,736
Other notes payable			100			101
Total long-term obligations			450,776			450,691
Less: Current maturities			1			1
	Long-term obligations, net	$	450,775		$	450,690

In addition, the Company had $14.5 million outstanding under the revolving credit facility as of September 30, 2011.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

At ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011, current and long-term obligations of ~~Reddy~~the ~~Corp~~Company consisted of the following:

			September 30, 2011			December 31, 2010
		March 31, 2012			December 31, 2011
		(in thousands)	~~(in thousands)~~
11.25% Senior Secured Notes		$	$300,000	~~300,000~~	$	$300,000	~~300,000~~
13.25% Senior Secured Notes			139,407	~~139,407~~		139,407	~~139,407~~
Less: Unamortized early tender premium on 13.25% Senior Secured Notes			(410	~~(467~~)	)	(438	~~(553~~)	)
Other notes payable				100			101
101/2% Senior Discount Notes			11,736			11,736
Total long-term obligations				439,040			438,955
Other notes payable			99			100
Less: Current maturities				1			1
Total long-term obligations			450,832			450,805
	Long-term obligations, net		$	439,039		$	438,954
Less: Current maturities			450,733			450,705
Long-term obligations, net		$	99		$	100

In addition, ~~Reddy~~the ~~Corp~~Company had $1450.50 million outstanding under the revolving credit facility as of ~~September~~March 3031, ~~2011~~2012.

~~11.25% Senior Secured Notes. On~~ At March 1531, ~~2010,~~2012 ~~Reddy~~and ~~Corp issued $300.0~~December ~~million~~31, in aggregate principal amount of 11.25% Senior Secured Notes due 2015 (the "First Lien Notes") in a private placement offering. The First Lien Notes were subsequently registered with the SEC effective August 22011, ~~2010. Cash~~current ~~interest accrues on the First Lien Notes at a rate of 11.25% per annum~~ and ~~is payable semi~~long-~~annually~~term inobligations ~~arrears on March 15 and September 15. The First Lien Notes mature on March 15, 2015. The proceeds~~ of ~~the offering were used to repay certain of~~ Reddy Corp's ~~preexisting~~consisted ~~debt~~of ~~(see "Old Senior Credit Facilities" below), pay fees and expenses related to~~ the ~~transactions~~ ~~and~~following: ~~provide the Company with cash for future use.~~

The First Lien Notes are senior secured obligations of Reddy Corp and are:

	March 31, 2012			December 31, 2011

	(in thousands)
11.25% Senior Secured Notes		300,000			300,000
13.25% Senior Secured Notes		139,407			139,407
Less: Unamortized early tender premium on 13.25% Senior Secured Notes		(410	)		(438	)
Old credit facilities—Term Loan		—			—
Note Payable to Parent		8,380			—
Other Notes Payable		99			100

Total long-term obligations		447,476			439,069
Less: Current maturities		447,377			438,969

Long-term obligations, net	$	99		$	100

~~The~~In ~~First Lien Notes include customary covenants that restrict~~addition, ~~among other things,~~ Reddy Corp's ~~and~~had ~~its~~$50.0 million ~~future~~outstanding ~~subsidiaries'~~under ~~ability~~the torevolving ~~incur~~credit ~~additional~~facility ~~debt~~as or issue certain preferred stock, pay dividends or redeem, repurchase or retire its capital stock or subordinated indebtedness, make certain investments, create liens, enter into arrangements that restrict dividends from its subsidiaries, merge or sell all or substantially all of ~~its assets or enter into various transactions with affiliates. From and after~~ March 1531, ~~2013, Reddy Corp may redeem any or all of the First Lien Notes by paying a redemption premium, which is initially 5~~2012.~~625%~~ ~~of the principal amount of the First Lien Notes and declines to 0%~~

11.25% Senior Secured Notes. On March 15, 2010, Reddy Corp issued $300.0 million in aggregate principal amount of 11.25% Senior Secured Notes due 2015 (the "First Lien Notes") in a private placement offering. The First Lien Notes were subsequently registered with the SEC effective August 2, 2010. Cash interest accrues on the First Lien Notes at a rate of 11.25% per annum and is payable semi-annually in arrears on March 15 and September 15. The First Lien Notes mature on March 15,

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~for~~2015. ~~the~~The ~~period~~proceeds ~~commencing on March 15, 2014 and thereafter. Prior to March 15, 2013, Reddy Corp may redeem any or all~~ of the ~~First~~offering ~~Lien~~were ~~Notes~~used byto ~~paying~~repay acertain ~~"make-whole" redemption premium. If Reddy Corp experiences a change~~ of ~~control,~~ Reddy Corp's ~~will~~preexisting bedebt ~~required~~(see to"Old ~~make~~Senior anCredit ~~offer~~Facilities" ~~to repurchase the First Lien Notes at a price equal to 101% of their accreted value~~below), ~~plus~~pay ~~accrued~~ fees and ~~unpaid~~expenses ~~interest,~~related ~~if any,~~ to the ~~date~~transactions ofand ~~purchase. Reddy Corp may also be required to make an offer to purchase~~ provide the ~~First~~Company ~~Lien Notes~~ with ~~proceeds~~cash offor ~~asset~~future ~~sales that are not reinvested in the Company's business or used to repay other indebtedness~~use.

The First Lien Notes are senior secured obligations of Reddy Corp and are:

•: guaranteed by Reddy Holdings;
•: secured on a first-priority basis by liens on substantially all of the assets of Reddy Corp and Reddy Holdings;
•: senior in right of payment to all of Reddy Corp's and Reddy Holdings' future subordinated indebtedness; and
•: effectively senior to all of Reddy Corp's and Reddy Holdings' existing and future unsecured senior indebtedness.

The First Lien Notes include customary covenants that restrict, among other things, Reddy Corp's and its future subsidiaries' ability to incur additional debt or issue certain preferred stock, pay dividends or redeem, repurchase or retire its capital stock or subordinated indebtedness, make certain investments, create liens, enter into arrangements that restrict dividends from its subsidiaries, merge or sell all or substantially all of its assets or enter into various transactions with affiliates. From and after March 15, 2013, Reddy Corp may redeem any or all of the First Lien Notes by paying a redemption premium, which is initially 5.625% of the principal amount of the First Lien Notes and declines to 0% for the period commencing on March 15, 2014 and thereafter. Prior to March 15, 2013, Reddy Corp may redeem any or all of the First Lien Notes by paying a "make-whole" redemption premium. If Reddy Corp experiences a change of control, Reddy Corp will be required to make an offer to repurchase the First Lien Notes at a price equal to 101% of their accreted value, plus accrued and unpaid interest, if any, to the date of purchase. Reddy Corp may also be required to make an offer to purchase the First Lien Notes with proceeds of asset sales that are not reinvested in the Company's business or used to repay other indebtedness.

The indenture governing the First Lien Notes restricts the amount of dividends, distributions and other restricted payments Reddy Corp may make. Under the indenture, Reddy Corp is restricted from paying dividends to Reddy Holdings unless, at the time of such payment:

•: no default or event of default has occurred and is continuing or would occur as a consequence thereof;
•: the first lien leverage ratio set forth in the indenture governing the First Lien Notes is less than or equal to 3.5 to 1.0; and
•: there is sufficient capacity under the buildup amount under the indenture governing the First Lien Notes.

The first lien leverage ratio under the indenture governing the First Lien Notes means the ratio of first lien indebtedness (as defined in the indenture) to EBITDA (as defined in the indenture) for the most recent four fiscal quarters. Reddy Corp is generally required to calculate its first lien leverage ratio on a pro forma basis to give effect to the incurrence and repayment of indebtedness as well as acquisitions and dispositions. As of ~~September~~March 3031, ~~2011~~2012, the first lien leverage ratio was 67.09 to 1.0.

The buildup amount equals 50% of the consolidated net income of Reddy Corp accrued during the period (treated as one accounting period) from April 1, 2010 to the end of the most recent fiscal quarter for which internal financial statements are available (or, if such consolidated net income is a deficit, minus 100% of such deficit), plus, the net cash proceeds to Reddy Corp of the issuance of capital stock, subject to certain exceptions, and any cash capital contribution received by Reddy Corp from its stockholder, in each case after April 1, 2010, plus the amount by which Reddy Corp indebtedness is reduced on its balance sheet as a result of the conversion or exchange of such indebtedness for capital stock, plus the net reduction in certain restricted investments made by Reddy Corp, less the amount of certain restricted payments made from time to time, including, among other things, the payment of cash dividends. Reddy Corp is not currently permitted to pay dividends under this provision.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~ 2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~overhead~~ ~~expenses~~ The buildup amount equals 50% of the consolidated net income of Reddy ~~Holdings~~Corp ~~and~~accrued during the period (4treated as one accounting period) from April 1, 2010 to the ~~payment~~end of ~~dividends~~the tomost recent ~~Reddy~~fiscal ~~Holdings~~quarter infor anwhich ~~amount~~internal ~~per~~financial ~~year~~statements ~~not~~are toavailable ~~exceed~~(or, ~~6.0~~if such consolidated net income is a deficit, minus 100% of ~~the~~such ~~aggregate~~deficit), plus, the net cash proceeds to Reddy Corp of the issuance of capital stock, subject to certain exceptions, and any cash capital contribution received by Reddy Corp from ~~all~~ ~~public~~its ~~equity~~stockholder, ~~offerings~~in each case after April 1, 2010, plus the ~~date~~amount by which Reddy Corp indebtedness is reduced on its balance sheet as a result of ~~issuance~~the conversion or exchange of such indebtedness for capital stock, plus the ~~First~~net ~~Lien~~reduction ~~Notes~~in ~~subject~~certain torestricted ~~specified~~investments made ~~conditions.~~by ~~However~~Reddy Corp, less the amount of ~~dividend~~certain restricted payments ~~permitted~~made ~~under~~from ~~this~~time ~~6.0%~~to ~~provision~~time, ~~will correspondingly~~including, ~~reduce~~among other things, the ~~amount~~payment ~~otherwise~~of ~~available~~cash ~~under~~dividends. ~~the~~Reddy ~~buildup~~Corp ~~amount~~is ~~for~~not ~~restricted~~currently ~~payments,~~permitted ~~including~~to pay dividends under this provision.

In addition, regardless of the leverage ratio or whether Reddy Corp could make any restricted payments under the buildup amount provision referred to above, Reddy Corp is permitted to make certain restricted payments including (1) dividend payments at any time in an aggregate amount of up to $25.0 million if no default has occurred and is continuing under the indenture, (2) the payment of interest when due on the remaining 10¹/2% Senior Discount Notes and the repayment, redemption or retirement of the remaining 10¹/2% Senior Discount Notes from the proceeds of certain indebtedness of Reddy Corp incurred after the date of issuance of the First Lien Notes, (3) the payment of dividends to Reddy Holdings in an amount per year not to exceed $1.0 million to pay franchise taxes and overhead expenses of Reddy Holdings and (4) the payment of dividends to Reddy Holdings in an amount per year not to exceed 6.0% of the aggregate net cash proceeds received by Reddy Corp from all public equity offerings after the date of issuance of the First Lien Notes subject to specified conditions. However, the amount of dividend payments permitted under this 6.0% provision will correspondingly reduce the amount otherwise available under the buildup amount for restricted payments, including dividends.

The Bankruptcy filing constituted an event of default under the indenture governing the First Lien Notes.

13.25% Senior Secured Notes. On March 15, 2010, Reddy Corp issued $137.6 million in aggregate principal amount of 13.25% Senior Secured Notes due 2015 (the "Second Lien Notes") in the initial settlement of a private placement exchange offer for the outstanding Discount Notes (the "Exchange Offer"). The Second Lien Notes were subsequently registered with the SEC effective August 2, 2010. On March 24, 2010, Reddy Corp issued an additional $1.8 million in aggregate principal amount of Second Lien Notes in the final settlement of the Exchange Offer. Reddy Corp received no cash proceeds from the issuance of the Second Lien Notes. Cash interest accrues on the Second Lien Notes at a rate of 13.25% per annum and is payable semi-annually in arrears on May 1 and November 1, with the first payment occurring on November 1, 2010. The Second Lien Notes mature on November 1, 2015. In connection with the Exchange Offer, the Company issued $0.6 million of Second Lien Notes to certain bondholders as an early tender premium (see "10¹/2% Senior Discount Notes" below for further information). These additional Second Lien Notes were not reflected in the Company's condensed consolidated balance sheet upon issuance, but will be recognized as additional debt through interest expense over the term of the Second Lien Notes.

The Second Lien Notes are senior secured obligations of Reddy Corp and are:

The Second Lien Notes include customary covenants that restrict, among other things, Reddy Corp's and its future subsidiaries' ability to incur additional debt or issue certain preferred stock, pay dividends or redeem, repurchase or retire its capital stock or subordinated indebtedness, make certain investments, create liens, enter into arrangements that restrict dividends from its subsidiaries, merge or sell all or substantially all of its assets or enter into various transactions with affiliates. From and after March 1, 2013, Reddy Corp may redeem any or all of the Second Lien Notes by paying a redemption premium, which is initially 6.625% of the principal amount of the Second Lien Notes and declines to 0% for the period commencing on March 1, 2014 and thereafter. Prior to March 1, 2013, Reddy Corp may redeem any or all of the Second Lien Notes by paying a "make-whole" redemption premium. If Reddy Corp experiences a change of control, Reddy Corp will be required to make an offer to repurchase the Second Lien Notes at a price equal to 101% of their accreted value, plus accrued and unpaid interest, if any, to the date of purchase. Reddy Corp may also be required to make an offer to

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~purchase~~ The ~~the~~ Second Lien Notes ~~with proceeds of asset sales that~~ are ~~not~~senior ~~reinvested~~secured inobligations ~~the~~of ~~Company's~~Reddy ~~business~~Corp orand ~~used to repay other indebtedness.~~ are:

•: guaranteed by Reddy Holdings;
•: secured on a second-priority basis by liens on substantially all of the assets of Reddy Corp and Reddy Holdings;
•: senior in right of payment to all of Reddy Corp's and Reddy Holdings' future subordinated indebtedness; and
•: effectively senior to all of Reddy Corp's and Reddy Holdings' existing and future unsecured senior indebtedness.

The indenture governing the Second Lien Notes restricts the amount of dividends, distributions and other restricted payments Reddy Corp may make. Under the indenture, Reddy Corp is restricted from paying dividends to Reddy Holdings unless, at the time of such payment:

•: no default or event of default has occurred and is continuing or would occur as a consequence thereof;
•: the secured leverage ratio set forth in the indenture governing the Second Lien Notes is less than or equal to 6.0 to 1.0; and
•: there is sufficient capacity under the buildup amount under the indenture governing the Second Lien Notes.

The secured leverage ratio under the indenture governing the Second Lien Notes means the ratio of secured indebtedness (as defined in the indenture) to EBITDA (as defined in the indenture) for the most recent four fiscal quarters. Reddy Corp is generally required to calculate its secured leverage ratio on a pro forma basis to give effect to the incurrence and repayment of indebtedness as well as acquisitions and dispositions. As of ~~September~~March 3031, ~~2011~~2012, the second lien leverage ratio was 811.71 to 1.0.

In addition, regardless of the leverage ratio or whether Reddy Corp could make any restricted payments under the buildup amount provision referred to above, Reddy Corp is permitted to make certain restricted payments including (1) dividend payments at any time in an aggregate amount of up to $25.0 million if no default has occurred and is continuing under the indenture, (2) the payment of interest when due on the remaining 101/2% Discount Notes and the repayment, redemption or retirement of remaining 101/2% Discount Notes from the proceeds of certain indebtedness of Reddy Corp incurred after the date of issuance of the Second Lien Notes, (3) the payment of dividends to Reddy Holdings in an amount per year not to exceed $1.0 million to pay franchise taxes and overhead expenses of Reddy Holdings and (4) the payment of dividends to Reddy Holdings in an amount per year not to exceed 6.0% of the aggregate net cash proceeds received by Reddy Corp from all public equity offerings after the date of issuance of the Second Lien Notes subject to specified conditions. However, the amount of dividend payments permitted under this 6.0% provision will correspondingly reduce the amount otherwise available under the buildup amount for restricted payments, including dividends.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~ 2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~101/2% Senior Discount Notes. On October 27, 2004, Reddy Holdings issued $151 million in~~quarter ~~aggregate~~for ~~principal~~which ~~amount~~internal ~~at maturity~~financial ofstatements ~~101/2%~~are ~~Senior~~available ~~Discount~~(or, ~~Notes~~if ~~due~~such ~~2012~~consolidated ~~(the~~net ~~"Discount~~income ~~Notes")~~is in a ~~private placement offering. The Discount Notes were subsequently registered with the SEC~~deficit, ~~effective August 26,~~minus ~~2005.~~100% ~~Each Discount Note had an initial accreted value~~ of ~~$663.33~~such ~~per~~deficit), $1plus,~~000~~ ~~principal~~the ~~amount~~net atcash ~~maturity.~~proceeds ~~The~~to ~~accreted~~Reddy ~~value~~Corp of ~~each Discount Note increased from~~ the ~~date of~~ issuance of ~~until~~capital ~~November 1~~stock, ~~2008~~subject atto acertain ~~rate~~exceptions, ofand ~~101/2%~~any ~~per~~cash ~~annum~~capital ~~such~~contribution ~~that~~received ~~the~~by ~~accreted~~Reddy ~~value~~Corp ~~equaled~~from ~~the~~its ~~stated~~stockholder, ~~principal~~in ~~amount~~each oncase ~~November~~after April 1, ~~2008. Thereafter~~2010, ~~cash interest~~plus ~~began~~the ~~accruing~~amount ~~November 1,~~by ~~2008~~which ~~and~~Reddy Corp indebtedness is ~~payable~~reduced ~~semi-annually in arrears~~ on ~~May 1~~its ~~and~~balance ~~November 1~~sheet atas a ~~rate~~result of ~~101/2%~~the ~~per~~conversion ~~annum.~~or ~~The~~exchange ~~Discount Notes~~of ~~mature~~such ~~and~~indebtedness ~~are~~for ~~payable~~capital ~~on November 1~~stock, ~~2012.~~plus ~~During~~ the ~~years~~net ~~ended~~reduction ~~December 31,~~in ~~2010~~certain ~~and~~restricted ~~2009,~~investments made by Reddy Corp, ~~paid~~less ~~cash dividends to Reddy Holdings in~~ the amount of ~~$6.7 million and~~certain ~~$15.8 million,~~restricted ~~respectively, to fund the semi-annual interest~~ payments onmade ~~the~~from ~~Discount~~time ~~Notes.~~to ~~During~~time, ~~the nine month period ended September 30~~including, ~~2011~~among ~~and~~other ~~2010~~things, ~~Reddy~~the ~~Corp paid~~payment of cash dividends. to Reddy ~~Holdings~~Corp inis ~~the~~not ~~amount~~currently ofpermitted ~~$0.6 million and $6.0 million, respectively,~~ to ~~fund~~pay ~~the~~dividends under ~~semi-annual~~this ~~interest payments on the Discount Notes~~provision.

OnIn ~~February 22~~addition, ~~2010,~~regardless of the leverage ratio or whether Reddy Corp ~~launched~~could make any restricted payments under the ~~Exchange~~buildup ~~Offer~~amount provision referred to above, ~~offering~~Reddy $Corp is permitted to make certain restricted payments including (1~~,000~~) dividend payments at any time in an aggregate ~~principal~~ amount of ~~Second~~up ~~Lien~~to ~~Notes~~$25.0 million ~~for~~if ~~each~~no ~~$1,000~~default ofhas ~~Discount~~occurred ~~Notes~~and ~~exchanged.~~is Incontinuing under the ~~addition~~indenture, ~~for~~(2) the payment of interest when due on the remaining 101/2% Discount Notes ~~exchanged~~and onthe repayment, redemption or ~~prior~~retirement toof ~~March 5,~~remaining ~~2010,~~101/2% ~~Reddy~~Discount Notes ~~Corp~~from ~~offered~~the anproceeds ~~early~~of ~~tender~~certain ~~premium~~indebtedness of $5Reddy inCorp ~~aggregate~~incurred ~~principal~~after ~~amount~~the date of issuance of the Second Lien Notes, ~~for~~(3) the ~~each~~payment ~~$1,000~~ of ~~Discount~~ ~~Notes~~dividends ~~exchanged.~~to InReddy ~~conjunction~~Holdings ~~with~~in ~~the~~an ~~Exchange~~amount ~~Offer,~~per ~~Reddy~~year not ~~Corp~~to ~~solicited~~exceed ~~consents~~$1.0 million to ~~eliminate~~pay ~~substantially~~franchise ~~all~~taxes ofand ~~the~~overhead ~~restrictive~~expenses ~~covenants~~of ~~from~~Reddy ~~the~~Holdings ~~indenture~~and ~~governing~~ (4) the ~~Discount Notes.~~payment Atof ~~the~~dividends ~~expiration~~to ofReddy ~~the~~Holdings ~~Exchange~~in ~~Offer~~an onamount ~~March 19,~~per ~~2010,~~year ~~approximately~~not 92to exceed 6.20% of the aggregate ~~principal~~net ~~amount~~cash ofproceeds ~~the~~received ~~Discount~~by ~~Notes~~Reddy ~~had~~Corp ~~been~~from ~~tendered~~all ~~into~~public ~~the~~equity ~~Exchange~~offerings ~~Offer. Following~~after the ~~final~~date ~~settlement~~of issuance of the ~~Exchange~~Second ~~Offer~~Lien Notes subject to specified conditions. However, ~~$11~~the amount of dividend payments permitted under this 6.~~7 million~~0% inprovision ~~aggregate~~will ~~principal~~correspondingly reduce the amount ofotherwise available under the ~~Discount~~buildup ~~Notes~~amount ~~remain~~for ~~outstanding~~restricted payments, including dividends.

The ~~Discount~~Bankruptcy ~~Notes~~filing ~~are~~constituted ~~unsecured~~an ~~obligations~~event of default under the indenture governing the Second Lien Notes. Pursuant to the ongoing Chapter 11 proceedings, Reddy ~~Holdings~~Corp ~~and~~did ~~are:~~not make the interest payment on the Second Lien Notes due on May 1, 2012.

As101/2% Senior Discount Notes. On October 27, 2004, Reddy Holdings issued $151 million in aggregate principal amount at maturity of 101/2% Senior Discount Notes due 2012 (the "Discount Notes") in a private placement offering. The Discount Notes were subsequently registered with the SEC, effective August 26, 2005. Each Discount Note had an initial accreted value of $663.33 per $1,000 principal amount at maturity. The accreted value of each Discount Note increased from the date of issuance until November 1, 2008 at a rate of 101/2% per annum such that the accreted value equaled the stated principal amount on November 1, 2008. Thereafter, cash interest began accruing November 1, 2008 and is payable semi-annually in arrears on May 1 and November 1 at a rate of 101/2% per annum. The Discount Notes mature and are payable on November 1, 2012. During the three months ended December 31, 2011 and 2010, Reddy ~~Holdings~~Corp ~~may~~paid ~~redeem~~cash ~~any~~dividends orto ~~all~~Reddy Holdings in the amount of $1.2 million and $6.7 million, respectively, to fund the semi-annual interest payments on the Discount Notes. ~~without~~No ~~paying~~dividends ~~any~~were ~~redemption~~paid ~~premium~~in the three months ended March 31, 2012 and 2011.

~~Senior Credit Facilities.~~ On ~~March~~ February 1522, 2010, Reddy Corp ~~entered~~launched ~~into~~the aExchange ~~revolving~~Offer, ~~credit~~offering ~~facility~~$1,000 ~~with~~in aaggregate ~~syndicate~~principal amount of ~~banks, financial institutions~~Second ~~and~~Lien ~~other~~Notes ~~entities~~for aseach ~~lenders~~$1,000 ~~including~~of ~~JPMorgan~~Discount ~~Chase~~Notes ~~Bank, N~~exchanged.A. In addition, asfor ~~Administrative~~Discount ~~Agent~~Notes ~~(the~~exchanged ~~"March~~on ~~2010~~or ~~Credit~~prior ~~Facility").~~to ~~The~~ March 5, 2010, ~~Credit~~Reddy ~~Facility~~Corp ~~provided~~offered ~~for~~an a early tender premium of $~~35 million~~5 ~~revolving~~in ~~credit~~aggregate ~~facility.~~principal ~~Under~~amount ~~the~~of ~~March~~Second ~~2010~~Lien ~~Credit~~Notes ~~Facility~~for each $1,000 of Discount Notes

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~Reddy~~exchanged. ~~Corp~~In ~~had~~conjunction with the ~~right~~Exchange toOffer, ~~request~~Reddy ~~the~~Corp ~~aggregate~~solicited ~~commitments~~consents to beeliminate ~~increased~~substantially toall ~~$50 million~~of ~~provided~~the ~~certain~~restrictive ~~conditions~~covenants ~~were~~from ~~met~~the indenture governing the Discount Notes. OnAt ~~August~~the expiration of the Exchange Offer on March 419, 2010, approximately 92.2% of the aggregate ~~commitments~~principal ~~under~~amount of the ~~March~~ ~~2010~~Discount ~~Credit~~Notes ~~Facility~~had ~~were~~been ~~increased~~tendered tointo the Exchange Offer. Following the final settlement of the Exchange Offer, $5011.7 million in aggregate principal amount of the Discount Notes remain outstanding.

The Discount Notes are unsecured obligations of Reddy Holdings and are:

•: not guaranteed by Reddy Corp;
•: senior in right of payment to all of Reddy Holdings' future subordinated indebtedness;
•: equal in right of payment with any of Reddy Holdings' existing and future unsecured senior indebtedness;
•: effectively subordinated to Reddy Holdings' existing and future secured debt, including the debt under the First Lien Notes, the Second Lien Notes and the credit facility, which are guaranteed on a secured basis by Reddy Holdings; and
•: structurally subordinated to all obligations and preferred equity of Reddy Corp.

As of November 1, 2010, Reddy Holdings may redeem any or all of the Discount Notes without paying any redemption premium.

The Bankruptcy filing constituted an event of default under the indenture governing the Discount Notes. Pursuant to the ongoing Chapter 11 proceedings, Reddy Holdings did not make the interest payment on the Discount Notes due on May 1, 2012.

Senior Credit Facilities. On March 15, 2010, Reddy Corp entered into a revolving credit facility with a syndicate of banks, financial institutions and other entities as lenders, including JPMorgan Chase Bank, N.A., as Administrative Agent (the "March 2010 Credit Facility"). The March 2010 Credit Facility provided for a $35 million revolving credit facility. Under the March 2010 Credit Facility, Reddy Corp had the right to request the aggregate commitments to be increased to $50 million provided certain conditions were met. On August 4, 2010, the aggregate commitments under the March 2010 Credit Facility were increased to $50 million.

The March 2010 Credit Facility was an obligation of Reddy Corp and was guaranteed by Reddy Holdings. The March 2010 Credit Facility was scheduled to mature on January 31, 2014.

Principal balances outstanding under the March 2010 Credit Facility bore interest per annum, at Reddy Corp's option, at the sum of the base rate or LIBOR plus the applicable margin. The applicable margin for base rate loans was initially 3.75% and for LIBOR loans was initially 4.75%, with such applicable margins subject to reduction based upon the Company's net leverage ratio (as defined in the March 2010 Credit Facility). The Company also paid (i) a quarterly fee on the average availability under the revolving credit facility at an annual rate of 0.875%, with such availability fee subject to reduction based upon the Company's net leverage ratio, (ii) a $50,000 annual loan servicing fee, and (iii) an annual commitment fee of $0.2 million to one of the lenders.

On October 22, 2010, Reddy Corp and the lenders party thereto amended and restated the March 2010 Credit Facility (the "New Credit Facility"). The New Credit Facility provides for a $50 million revolving credit facility. Macquarie Bank Limited ("Macquarie"), a lender under the March 2010 Credit Facility, is currently the sole lender under the New Credit Facility. On December 10, 2010, Macquarie became the successor administrative agent under the New Credit Facility.

The New Credit Facility provides that outstanding loans will bear interest at rates based on LIBOR plus an applicable margin of 7.0% per annum or, at the option of Reddy Corp, the Base Rate, plus an applicable margin of 6.0% per annum, the relevant margin being the applicable margin. Swing line loans will bear interest at the Base Rate plus the applicable margin. LIBOR and Base Rates are subject to floors of 1.5% and 2.5%, respectively. Interest on LIBOR loans is payable upon maturity of the LIBOR loan or on the last day of the quarter if the term of the LIBOR loan exceeds 90 days. Reddy Corporation will pay an anniversary fee on each anniversary of the effectiveness of the New Credit Facility equal to 1.0% of the commitments under the New Credit Facility on the first anniversary and increasing on each subsequent anniversary by 0.5%, as well as a $50,000 quarterly loan servicing fee. Additionally, for each full calendar year beginning with 2011, if the average balance outstanding under the New Credit Facility is less than $12.5 million for the calendar year, the Borrower shall pay to the Lenders an amount equal to (x) the difference between the average balance outstanding and $12.5 million multiplied by (y) the average interest rate for LIBOR Loans during that calendar year (determined based on average one month LIBOR rates as of the end of each quarter during such calendar year). The New Credit Facility will mature on October 22, 2014. At September 30, 2011, the Company had $14.5 million outstanding and $35.5 million of availability under the New Credit Facility. The weighted average interest rate on borrowings under on the New Credit Facility as of September 30, 2011 was 7.4%.

The obligations under the New Credit Facility are fully and unconditionally guaranteed by Reddy Holdings and will also be guaranteed by any future domestic subsidiaries of Reddy Corp, subject to certain exceptions.

The New Credit Facility does not require any scheduled principal payments prior to its stated maturity date. Subject to certain conditions, mandatory repayments of the New Credit Facility (and

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~mandatory~~ On ~~commitment~~October 22, ~~reductions~~2010, ofReddy Corp and the ~~New~~lenders ~~Credit~~party ~~Facility)~~thereto ~~are~~amended ~~required~~and torestated bethe ~~made~~March ~~with~~2010 ~~portions~~Credit ofFacility (the ~~proceeds~~"New ~~from~~Credit (1Facility") ~~asset~~. ~~sales,~~The ~~(2) the~~New ~~issuance~~Credit ofFacility ~~debt~~provided ~~securities and~~for ~~(3)~~a $50 ~~insurance~~million ~~and~~revolving ~~condemnation~~credit ~~awards,~~facility. ~~subject~~Macquarie toBank ~~various~~Limited ~~exceptions.~~("Macquarie"), Ina ~~the~~lender ~~event~~under ofthe aMarch ~~change~~2010 inCredit ~~control~~Facility, aswas ~~defined~~the insole lender under the New Credit Facility. On December 10, an2010, ~~event~~Macquarie ofbecame ~~default~~the ~~will~~successor ~~occur~~administrative agent under the New Credit Facility.

The New Credit Facility ~~also~~provided ~~contains~~that ~~affirmative~~outstanding ~~and~~loans ~~negative~~bore ~~covenants~~interest at rates based on LIBOR plus an applicable tomargin of 7.0% per annum or, at the option of Reddy Corp, ~~and~~the ~~its~~Base ~~future~~Rate, plus ~~subsidiaries~~an applicable margin of 6.0% per annum, the relevant margin being the applicable margin. Swing line loans bore interest at the Base Rate plus the applicable margin. LIBOR and Base Rates were subject to ~~materiality~~floors ~~and~~of ~~other~~1.5% ~~qualifications~~and 2.5%, ~~baskets~~respectively. Interest on LIBOR loans was payable upon maturity of the LIBOR loan or on the last day of the quarter if the term of the LIBOR loan exceeded ~~and~~90 days. ~~exceptions~~Reddy Corporation was obligated to pay an anniversary fee on each anniversary of the effectiveness of the New Credit Facility equal to 1.0% ~~The~~of ~~affirmative~~the commitments under the New Credit Facility on the first anniversary and ~~negative~~increasing ~~covenants~~on ~~are~~each ~~substantially~~subsequent ~~consistent~~anniversary ~~with~~by ~~those~~0.5%, ~~contained~~as inwell as a $50,000 quarterly loan servicing fee. Additionally, for each full calendar year beginning with 2011, if the ~~March~~average ~~2010~~balance outstanding under the New Credit Facility was less than $12.5 million for the calendar year, the Borrower was obligated to pay to the Lenders an amount equal to (x) the difference between the average balance outstanding and $12.5 million multiplied by (y) the average interest rate for LIBOR Loans during that calendar year (determined based on average one month LIBOR rates as of the end of each quarter during such calendar year). The ~~negative~~New ~~covenants~~Credit Facility would have matured on October 22, ~~among~~2014. ~~other~~At ~~things~~March 31, ~~restrict~~2012, the ~~ability~~Company had $50.0 million outstanding and no availability under the New Credit Facility. The weighted average interest rate on borrowings under the New Credit Facility as of ~~Reddy~~March 31, 2012 ~~Corp~~was ~~to:~~8.6%.

~~Under~~The ~~the~~obligations ~~restricted~~under ~~payments covenant in~~ the New Credit Facility, ~~Reddy~~were ~~Corp~~fully ~~is generally prohibited from paying dividends~~ and ~~otherwise~~unconditionally ~~transferring~~guaranteed ~~assets~~by to Reddy Holdings. ~~Reddy Corp.~~and iswere ~~permitted~~also toguaranteed ~~pay~~by ~~certain~~any ~~limited~~future ~~dividends~~domestic tosubsidiaries ~~Reddy Holdings, the proceeds~~ of ~~which must be used for specific purposes, such as to maintain~~ Reddy ~~Holdings' corporate existence~~Corp, ~~repurchase the~~ ~~Discount~~subject ~~Notes~~to ~~and pay interest on the Discount Notes. Reddy Corp may also distribute~~ certain ~~investments to Reddy Holdings~~exceptions.

~~In addition, Reddy Corp may also pay dividends to Reddy Holdings for specified purposes, including the payment of cash interest on the Discount Notes.~~ The New Credit Facility ~~(and~~did ~~the March~~not ~~2010~~require ~~Credit Facility, while it was in effect) precludes Reddy Corp from declaring~~ any ~~dividends~~scheduled ifprincipal anpayments ~~event~~prior ofto ~~default~~its ~~under~~stated ~~the~~maturity ~~credit~~date. ~~facility~~Subject ~~has~~to ~~occurred~~certain ~~and is continuing. In particular~~conditions, ~~it will~~mandatory berepayments ~~an event~~ of ~~default under~~ the New Credit Facility ~~if Reddy Corp's leverage ratio~~ (~~defined~~and asmandatory ~~the~~commitment ~~ratio~~reductions of the ~~outstanding balance of the~~ New Credit Facility) onwere ~~the~~required ~~last day of each quarter~~ to ~~EBITDA~~ ~~(as~~be ~~defined~~made inwith ~~the~~portions ~~New~~of ~~Credit Facility) over~~ the ~~preceding~~proceeds ~~four~~from ~~quarters~~(1) asset ~~exceeds~~sales, (2~~.50:1.00 as of~~ ) the ~~end~~issuance of ~~any~~debt ~~quarter.~~securities ~~The~~and (3) insurance ~~New~~and ~~Credit~~condemnation ~~Facility~~awards, ~~requires~~subject ~~the~~to ~~maintenance~~various ~~of a minimum liquidity amount of $5 million at all times~~exceptions. ~~Liquidity~~In ~~for~~the ~~purposes~~event of ~~this~~a ~~covenant~~change isin ~~defined~~control, as ~~the~~defined ~~sum~~in ~~of available borrowing capacity under~~ the New Credit Facility, ~~and~~an ~~unrestricted~~event ~~cash held by Reddy Corp. The New Credit Facility is collateralized by substantially all~~ of ~~the~~default ~~Company's~~would ~~assets.~~have ~~Reddy~~occurred ~~Holdings guarantees the New Credit Facility and such guarantee is collateralized by a pledge~~under ~~of substantially all of~~ the ~~assets of Reddy Holdings. At September 30, 2011, Reddy Corp was in compliance with the ratio requirements included in the~~ New Credit Facility.

The New Credit Facility also contained affirmative and negative covenants applicable to Reddy Corp and its future subsidiaries, subject to materiality and other qualifications, baskets and exceptions. The affirmative and negative covenants were substantially consistent with those contained in the March 2010 Credit Facility. The negative covenants, among other things, restricted the ability of Reddy Corp to:

•: incur additional indebtedness or issue certain preferred shares;
•: create liens;
•: make investments;

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

•: pay dividends or make other restricted payments;
•: consolidate or merge or acquire or dispose of assets;
•: enter into transactions with affiliates;
•: permit consensual encumbrances or restrictions on Reddy Corp's restricted subsidiaries' ability to pay dividends or make certain other payments to Reddy Corp; and
•: prepay certain indebtedness, including the First Lien Notes and the Second Lien Notes.

~~Obligations~~Under ~~under~~ the ~~New~~restricted ~~Credit~~payments ~~Facility~~covenant ~~may~~in bethe ~~declared~~New ~~immediately~~Credit ~~due~~Facility, ~~and~~Reddy ~~payable~~Corp ~~upon~~was ~~the~~generally ~~occurrence~~prohibited offrom ~~certain~~paying ~~events~~dividends ofand ~~default~~otherwise astransferring ~~defined~~assets into ~~the~~Reddy ~~credit~~Holdings. ~~agreement, including~~Reddy ~~failure~~Corp was permitted to pay ~~any~~certain ~~principal~~limited ~~when~~dividends ~~due~~to ~~and~~Reddy ~~payable~~Holdings, ~~failure~~the toproceeds ~~pay~~of ~~interest~~which ~~within~~were ~~five~~required ~~(5) days after due, failure~~ to ~~comply~~be ~~with~~used ~~any~~for ~~covenant~~specific purposes, ~~representation~~such oras ~~condition~~to ofmaintain ~~any~~Reddy ~~loan~~Holdings' ~~document~~corporate existence, ~~any~~repurchase ~~change~~the ofDiscount ~~control,~~Notes ~~cross-defaults,~~ and ~~certain~~pay ~~other~~interest ~~events~~on asthe ~~set~~Discount ~~forth~~Notes. inReddy ~~the~~Corp ~~credit~~was ~~agreement,~~also ~~with~~permitted ~~grace~~to ~~periods~~distribute incertain ~~some~~investments ~~cases~~to Reddy Holdings.

AnIn ~~acceleration~~addition, ofReddy Corp could also pay dividends to Reddy Holdings for specified purposes, including the ~~indebtedness~~payment ~~under~~of cash interest on the Discount Notes. The New Credit Facility ~~would~~(and bethe March 2010 Credit Facility, while it was in effect) precluded Reddy Corp from declaring any dividends if an event of default under the ~~First~~credit ~~Lien~~facility ~~Notes~~occurred and ~~Second~~was ~~Lien~~continuing. ~~Notes~~In particular, it was an event of default under the New Credit Facility if Reddy Corp's leverage ratio (defined as the ratio of the outstanding balance of the New Credit Facility aton the ~~time~~last day of ~~acceleration~~each isquarter to EBITDA (as defined in the New Credit Facility) over the preceding four quarters) exceeded 2.50:1.00 as of the end of any quarter. The New Credit Facility required the maintenance of a minimum liquidity amount of $10 5 million at all times. Liquidity for purposes of this covenant was defined as the sum of available borrowing capacity under the New Credit Facility and unrestricted cash held by Reddy Corp. On March 27, 2012, we amended the New Credit Facility to among other things eliminate the minimum liquidity covenant through July 15, 2013. The New Credit Facility was collateralized by substantially all of the Company's assets. Reddy Holdings guaranteed the New Credit Facility and such guarantee was collateralized by a pledge of substantially all of the assets of Reddy Holdings. At March 31, 2012, Reddy Corp was in compliance with the ratio requirements included in the New Credit Facility.

~~Old~~Obligations under ~~Senior~~the New Credit ~~Facilities. On~~Facility ~~August 12,~~could ~~2005,~~be ~~the~~declared ~~Company~~immediately ~~amended~~due and ~~restated~~payable ~~its~~upon ~~credit~~the ~~facilities~~occurrence ~~with~~of acertain ~~syndicate~~events of ~~banks,~~ ~~financial institutions~~default ~~and other entities~~ as ~~lenders,~~defined ~~including~~in ~~Credit~~the ~~Suisse,~~credit ~~Cayman Islands Branch~~agreement, ~~as Administrative Agent, Wachovia Bank, N.A., JP Morgan Chase, N.A.,~~including ~~CIBC World~~failure ~~Markets~~to ~~Corp.,~~pay ~~Bear~~any ~~Stearns~~principal ~~Corporate~~when ~~Lending Inc.~~due and ~~Lehman Commercial Paper~~payable, ~~Inc.~~ ~~(the~~failure ~~"Old~~to ~~Credit~~pay ~~Facilities").~~interest ~~The~~within ~~Old~~five ~~Credit Facilities provided for a $60 million revolving credit facility~~ (~~the "Old Revolving Credit Facility"~~5) ~~and a $240~~ ~~million~~days ~~term~~after ~~loan~~due, ~~(the~~failure ~~"Old~~to ~~Term~~comply ~~Loan").~~with ~~The~~any ~~Old~~covenant, ~~Credit~~representation ~~Facilities~~or ~~were~~condition ~~obligations~~ of ~~Reddy~~any ~~Corp and~~loan ~~were guaranteed by Reddy Holdings. The Old Revolving Credit Facility and Old Term Loan were scheduled to mature on August 12~~document, any ~~2010~~change ~~and~~of ~~August 12~~control, ~~2012~~cross-defaults, ~~respectively.~~bankruptcy ~~On March 15, 2010, the Old Credit Facilities were terminated~~ and ~~all~~certain ~~amounts~~other ~~owed~~events ~~thereunder~~as ~~were~~set ~~repaid~~forth ~~from~~in the ~~proceeds~~credit ofagreement, ~~the~~with ~~sale~~grace ofperiods ~~the~~in ~~First~~some ~~Lien Notes~~cases.

~~Principal~~An ~~balances~~acceleration ~~outstanding~~of the indebtedness under the ~~Old~~New Credit Facility ~~bore~~would ~~interest~~have ~~per~~been ~~annum,~~an atevent ~~the Company's option, at the sum~~ of ~~the~~default ~~base~~under ~~rate plus 0.75% or LIBOR plus 1.75%. The base rate was defined as~~ the ~~greater~~First ofLien ~~the~~Notes ~~prime~~and ~~rate~~Second ~~(as~~Lien ~~announced~~Notes ~~from~~if ~~time to time by~~ the ~~Administrative~~outstanding ~~Agent)~~balance orof the New ~~federal~~Credit ~~funds~~Facility ~~rate~~at ~~plus 0.5%. Interest on base rate loans was payable on~~ the ~~last~~time ~~day~~ of ~~each~~acceleration ~~quarter. Interest on LIBOR loans~~ was ~~payable~~over ~~upon maturity of the LIBOR loan or on the last day of the quarter if the term of the LIBOR loan exceeded 90~~$10 ~~days~~million. ~~Reddy~~The ~~Corp~~Bankruptcy ~~also~~filing ~~paid~~constituted ~~a quarterly~~an ~~fee~~event onof ~~the~~default ~~average availability~~ under the ~~revolving~~ credit ~~facility~~agreement atgoverning anthe ~~annual~~New ~~rate~~Credit ~~of 0~~Facility.~~5%.~~

~~The~~On ~~Old~~April 13, ~~Revolving~~2012, ~~Credit~~Reddy ~~Facility~~Corp ~~and~~received ~~Old~~interim ~~Term~~approval ~~Loan~~from ~~did~~the ~~not~~Bankruptcy ~~require~~Court ~~any scheduled principal payments prior~~ to ~~their~~enter ~~stated~~into ~~maturity~~a ~~dates.~~new ~~The~~debtor-in-possession ~~Old~~revolving ~~Credit~~credit ~~Facilities~~facility ~~contained financial~~with ~~covenants,~~Macquarie ~~which~~Bank ~~include the maintenance of certain financial ratios~~Limited, as ~~defined in~~ the ~~Credit~~sole ~~Facilities,~~lender ~~and were collateralized by substantially all of the Company's assets.~~

Debt Refinance Costs. During the three and nine months ended September 30, 2010, the Company recorded expense of $0.3 million and $6.5 million, respectively, for costs incurred in connection with refinancing activities related to its debt. Approximately $5.8 million of the expense incurred in the nine months ended September 30, 2010 related to the exchange of the Discount Notes for the Second Lien Notes. The exchange was accounted for as a modification of debt.

Letters of Credit. The New Credit Facility does not provide for the issuance of standby letters of credit. In March 2010, Reddy Corp entered into a separate letter of credit facility with JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association (the "LC Facility"). Letters of credit issued under the LC Facility are cash collateralized at 102% of the amount of the letter of credit and are used primarily to secure certain insurance and operating lease obligations. The cash collateral

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

6. Revolving Credit Facility and Long-Term Obligations (Continued)

~~provided~~and ~~under~~administrative agent (the LC"DIP Credit Facility"). isOn ~~maintained~~April 16, 2012, Reddy Corp entered into the DIP Credit Facility. The DIP Credit Facility consists of a revolving credit facility in an amount not to exceed $70 million, a ~~restricted~~portion ~~account~~of atthe JPproceeds ~~Morgan~~of ~~Chase~~which ~~Bank~~were used to repay the New Credit Facility, Nalso known as the Pre-Petition Credit Facility.A The Company received the final order approving the DIP Credit Facility from the Bankruptcy Court on May 4, 2012. The DIP Credit Facility will provide additional liquidity during the restructuring process and contains isa ~~reported~~commitment asfrom ~~"Restricted~~Macquarie, ~~Cash"~~subject to the satisfaction of certain conditions, some of which are not in Reddy Corp's control, to provide a senior secured first lien revolving credit facility on substantially the ~~consolidated~~same ~~balance~~terms ~~sheets~~as the Pre-Petition Credit Facility upon Reddy Corp's emergence from bankruptcy.

~~Fair~~ Borrowings under ~~Value~~the ofDIP ~~Debt~~Credit ~~Instruments. At~~Facility ~~September 30,~~bear ~~2011~~interest ~~and~~at ~~December 31,~~a ~~2010,~~rate ~~the~~equal ~~fair~~to ~~value~~LIBOR plus an applicable margin of 7.0% per annum, or, at the Company's ~~long-term debt~~option, ~~was~~the ~~$379~~Alternative Base Rate plus an applicable margin of 6.0 ~~million~~% ~~and~~per ~~$437~~annum.~~0 million,~~ ~~respectively,~~LIBOR ~~while~~and the ~~book~~Base ~~value~~Rate ~~was~~are ~~$450~~subject to floors of 1.~~8 million~~5% and ~~$450~~2.~~7 million~~5%, respectively. The ~~fair~~DIP ~~value~~Credit ofFacility will not provide for the ~~Company~~issuance of letters of credit. The DIP Credit Facility will mature on July 16, 2012, with a three month extension at Reddy Corp's ~~debt~~option, issubject to limited conditions to extension, including the payment of an extension fee ~~primarily~~equal ~~based~~to on1.25% ~~quoted~~of ~~market~~the ~~prices~~full ~~for~~amount of the ~~debt~~DIP Credit Facility commitments.

The obligations 7under the DIP Credit Facility are fully and unconditionally guaranteed by Reddy Holdings and will also be guaranteed by any future domestic subsidiaries of Reddy Corp. The ~~Financial~~DIP ~~Derivative~~Credit ~~Instruments~~ Facility is collateralized by first priority priming liens on substantially all of the Reddy Corp's assets and is entitled to superpriority administrative claim status.

~~Diesel~~ Subject to ~~Hedging~~certain ~~Agreement. On March 25~~conditions, ~~2011,~~mandatory ~~the~~prepayments ~~Company entered into a hedge to fix the price per gallon~~ of ~~a portion of~~ the ~~Company's~~DIP ~~diesel fuel~~Credit ~~requirements~~Facility (~~the "Diesel Hedge"). The Diesel Hedge began April 1, 2011~~ and ~~expires~~mandatory oncommitment ~~December 28,~~reductions ~~2011. The notional amount~~ of ~~gallons~~the ~~hedged~~DIP ~~changes~~Credit onFacility) ~~a monthly basis to match anticipated utilization and totals 1.2 million gallons. The Company~~ will ~~pay~~be arequired ~~weighted average fixed price of $3.17 per gallon (wholesale basis) and receive an amount equal~~ to abe ~~wholesale index~~made ~~rate.~~with ~~Net payable or receivable amounts are settled monthly. On May 6, 2011, the Company entered into an additional hedge to fix the price per gallon~~ portions of aproceeds ~~portion~~from ofasset ~~the Company's diesel fuel requirements (the "Second Diesel Hedge"). The Second Diesel Hedge began June 1~~sales, ~~2011~~subject ~~and expires on December 31, 2012. The notional amount of gallons hedged changes on a monthly basis~~ to ~~match~~various ~~anticipated utilization and totals 1~~exceptions.~~1 million~~ gallons. The Company will pay a weighted average fixed price of $3.04 per gallon (wholesale basis) and receive an amount equal to a wholesale index rate. Net payable or receivable amounts are settled monthly. The Company uses the hedges to minimize the risk of rising fuel prices. The hedges are not for trading purposes and are accounted for as economic hedges and were not designated as hedging instruments.

The ~~Company~~DIP ~~carries~~Credit ~~the~~Facility ~~hedges~~contains ataffirmative ~~fair~~and ~~value~~negative oncovenants ~~its~~applicable ~~balance~~to ~~sheet~~Reddy Corp and ~~considers~~ its ~~own~~future ~~credit~~subsidiaries, ~~risk~~subject into ~~the~~materiality ~~valuation~~and ofother ~~the~~qualifications, ~~diesel~~baskets ~~hedges~~and exceptions. ~~Changes~~The inaffirmative ~~the~~and ~~fair~~negative ~~value~~covenants ~~of the hedge~~ are ~~recorded~~ insubstantially ~~"Cost~~the ofsame ~~sales~~as ~~(excluding~~the ~~depreciation)"~~Pre-Petition inCredit ~~the~~Facility, ~~consolidated~~modified ~~statements~~as ofnecessary ~~operations~~to ~~and~~reflect in the ~~operating~~commencement ~~activities~~and ~~section~~continuation of ~~cash~~the voluntary ~~flows.~~bankruptcy ~~Payments~~cases ~~made~~under orChapter 11 ~~received~~of ~~under~~ the ~~hedges~~United ~~are included~~States inBankruptcy Code (the ~~caption~~"Bankruptcy Cases"~~Cost~~) ofand ~~Sales~~the ~~(excluding~~effects ~~depreciation)"~~that oncustomarily ~~the~~result ~~consolidated~~from ~~statements~~reorganization ofunder ~~operations~~Chapter 11 ~~and~~of ~~unrealized~~the ~~gains~~United ~~and~~States ~~losses~~Bankruptcy ~~are~~Code. ~~presented~~The infinancial ~~the~~covenants ~~operating~~include ~~activities~~a ~~section~~maximum ofleverage ~~the~~ratio, ~~statements~~compliance ofwith cash ~~flows~~flow budgets and repayment limitation.

~~The~~Obligations ~~Fair~~under ~~Value~~the ~~Measurements~~DIP ~~and~~Credit ~~Disclosures~~Facility ~~Topic~~may ofbe ~~the~~declared ~~Codification~~immediately ~~establishes~~due aand ~~hierarchy~~payable ~~for~~upon ~~ranking~~ the ~~quality~~occurrence ~~and~~of ~~reliability~~certain events of ~~the~~default, ~~information~~subject ~~used~~ to ~~determine~~thresholds ~~fair~~and ~~values.~~grace periods in some cases. The ~~statement~~events ~~requires~~of ~~that~~default ~~assets~~are ~~and~~substantially ~~liabilities~~the ~~carried~~same atas ~~fair~~the ~~value~~Pre-Petition beCredit ~~classified~~Facility, ~~and~~modified ~~disclosed~~as innecessary ~~one~~to reflect the commencement of the ~~following~~Bankruptcy ~~three~~Cases ~~categories:~~and such other matters as the administrative agent shall specify.

Level 1:		Unadjusted quoted market prices in active markets for identical assets or liabilities.
Level 2:		Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
Level 3:		Unobservable inputs for the asset or liability.

Intercompany Promissory Note. In March of 2012, Reddy Corp issued an Intercompany Promissory Note to Reddy Holdings for the principal amount of approximately $8.6 million. The note matures on September 1, 2012 and bears an interest rate of 12.5% per annum due at the note's maturity. Reddy Holdings may demand repayment of all or any portion of the note, together with accrued interest, at any time prior to maturity. As of March 31, 2012, the principal outstanding under the Intercompany

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

76. ~~Financial~~Revolving ~~Derivative~~Credit ~~Instruments~~Facility and Long-Term Obligations (Continued)

~~The~~Promissory ~~Diesel~~Note ~~Hedges~~was ~~are a Level~~$8.4 ~~2 fair value measure and are valued using the income approach to calculate the present value of the future cash flows expected to be paid under the hedge~~million. ~~The~~Associated ~~value~~accrued ofinterest ~~the fixed leg is the present value~~ of ~~the known fixed payments discounted at a market interest rate~~$0.1 million ~~The~~was ~~value~~included ofin ~~the~~Accrued ~~floating~~Expenses ~~leg is the present value of the projected floating payments based~~ on ~~the~~Reddy ~~forward~~Corp's ~~diesel~~balance ~~prices~~sheet ~~discounted~~as atof aMarch 31, ~~market interest rate~~2012.

Old Senior Credit Facilities. On August 12, 2005, the Company amended and restated its credit facilities with a syndicate of banks, financial institutions and other entities as lenders, including Credit Suisse, Cayman Islands Branch, as Administrative Agent, Wachovia Bank, N.A., JP Morgan Chase, N.A., CIBC World Markets Corp., Bear Stearns Corporate Lending Inc. and Lehman Commercial Paper, Inc. (the "Old Credit Facilities"). The Old Credit Facilities provided for a $60 million revolving credit facility (the ~~following~~"Old ~~table~~Revolving ~~presents~~Credit Facility") and a $240 million term loan (the ~~location~~"Old Term Loan"). The Old Credit Facilities were obligations of ~~all~~Reddy ~~liabilities~~Corp ~~associated~~and ~~with~~were guaranteed by Reddy Holdings. The Old Revolving Credit Facility and Old Term Loan were scheduled to mature on August 12, 2010 and August 12, 2012, respectively. On March 15, 2010, the ~~Company's~~Old ~~derivative~~Credit ~~instruments~~Facilities ~~within~~were terminated and all amounts owed thereunder were repaid from the ~~Condensed~~proceeds ~~Consolidated~~of ~~Balance~~the ~~Sheet:~~sale of the First Lien Notes.

		Liability Derivatives
	Balance Sheet location	September 30, 2011			December 31, 2010
		(in thousands)
Diesel hedges	Accrued Expenses	$	(245	)	$	—

Principal balances outstanding under the Old Credit Facility bore interest per annum, at the Company's option, at the sum of the base rate plus 0.75% or LIBOR plus 1.75%. The base rate was defined as the greater of the prime rate (as announced from time to time by the Administrative Agent) or the federal funds rate plus 0.5%. Interest on base rate loans was payable on the last day of each quarter. Interest on LIBOR loans was payable upon maturity of the LIBOR loan or on the last day of the quarter if the term of the LIBOR loan exceeded 90 days. Reddy Corp also paid a quarterly fee on the average availability under the revolving credit facility at an annual rate of 0.5%.

The ~~following~~Old ~~tables~~Revolving ~~present~~Credit ~~the~~Facility ~~impact~~and ofOld ~~derivative~~Term ~~instruments~~Loan ~~and~~did not require any scheduled principal payments prior to their ~~location~~stated ~~within~~maturity dates. The Old Credit Facilities contained financial covenants, which include the ~~condensed~~maintenance ~~consolidated~~of certain financial ~~statements:~~ratios, as defined in the Credit Facilities, and were collateralized by substantially all of the Company's assets.

	Derivatives not designated as Hedging Instruments under ASC 718
	Amount of Loss Recognized in Condensed Consolidated Statements of Operations					Amount of Loss Recognized in Condensed Consolidated Statements of Operations
	Three months ended September 30,					Nine months ended September 30,
											Location of Loss Recognized in Condensed Consolidated Statements of Operations
	2011			2010		2011			2010
	(in thousands)
Diesel hedges:
Non-cash change in fair value	$	(83	)	$	—	$	(245	)	$	—
Cash settlements		(87	)		—		(117	)		—
Total recognized loss	$	(170	)	$	—	$	(362	)	$	—	Cost of sales (excluding depreciation)

Debt Refinance Costs. During the three months ended March 31, 2012, the Company recorded approximately $2.5 million of expense for costs incurred in connection with refinancing activities related to debt agreements intended to preserve the Company's liquidity position. As a result of the commencement of the Bankruptcy Cases, these transactions will no longer be consummated.

~~Collateral~~Letters ~~Requirements~~of ~~and Counterparty Risk~~Credit. ~~The~~Each ~~diesel~~of ~~hedges~~the ~~required~~New Credit Facility and the ~~Company~~DIP toCredit ~~provide~~Facility ~~cash~~do ~~collateral~~not inprovide for the ~~amount~~ issuance of standby $0letters of credit.~~6 million~~ In March 2010, ~~which~~Reddy ~~remained~~Corp ~~outstanding~~entered asinto a separate $15 million letter of ~~September 30~~credit facility with JPMorgan Chase Bank, ~~2011~~N.A. Inand ~~addition~~Wells Fargo Bank, ~~the~~National ~~Company~~Association is(the ~~required~~"LC toFacility"). ~~provide~~Letters ~~collateral~~of ifcredit issued under the ~~market~~LC ~~prices~~Facility ~~fall~~are ~~below~~cash collateralized at 102% of the ~~average~~amount ~~hedge~~of ~~prices~~the letter of credit and are used primarily to secure certain insurance and operating lease obligations. As of ~~September~~March 3031, ~~2011~~ 2012, ~~the~~$10.4 million ~~Company~~of ~~has~~letters ~~provided~~of credit were outstanding. The cash collateral ofprovided $0under the LC Facility is maintained in a restricted account at JP Morgan Chase Bank, N.~~3 million~~A. ~~related~~and tois ~~this~~reported as ~~requirement~~"Restricted Cash" in the consolidated balance sheets.

There were no derivative instruments outstanding during the three and nine months ended September 30, 2010.

The Company is exposed to risk of loss in the event of non-performance by the counterparty to the diesel hedges. The Company does not anticipate non-performance by the counterparty.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

87. ~~Stock-based~~Financial ~~Compensation~~Derivative Instruments

Diesel Hedging Agreement. On ~~August~~March 825, ~~2005~~2011, the ~~Board~~Company ofentered ~~Directors~~into ~~and~~a ~~stockholders~~hedge to fix the price per gallon of ~~Reddy~~a ~~Holdings~~portion ~~approved~~of the Company's diesel fuel requirements (the ~~Reddy~~"Diesel ~~Ice~~Hedge"). ~~Holdings~~The Diesel Hedge began April 1, 2011 and expired on December ~~Inc~~28, 2011. ~~Long-Term~~The ~~Incentive~~notional amount of gallons hedged changes on a monthly basis to match anticipated utilization and ~~Share~~totaled ~~Award~~1.2 million ~~Plan~~gallons. The Company paid a weighted average fixed price of $3.17 per gallon (wholesale basis) and received an amount equal to a wholesale index rate. Any net payable or receivable amounts were settled monthly. On May 6, 2011, the Company entered into an additional hedge to fix the price per gallon of a portion of the Company's diesel fuel requirements (the "~~Plan~~Second Diesel Hedge"). The Second Diesel Hedge began June 1, 2011 and was effective through December 31, 2012. On April 295, ~~2010~~2012 ~~the~~we ~~stockholders~~sold our hedge contract covering 0.4 million gallons for a gain of ~~Reddy~~$0.05 million. ~~Holdings~~The ~~approved~~notional anamount ~~amendment~~of gallons hedged changes on a monthly basis to ~~the~~match ~~Plan,~~anticipated ~~which~~utilization ~~increased~~and ~~the~~totals ~~number~~1.1 million gallons. ofThe ~~shares~~Company paid a weighted average fixed price of ~~common~~$3.04 ~~stock~~per ~~available~~gallon to(wholesale bebasis) ~~issued~~and received an amount equal to ~~employees,~~a wholesale index rate. Any net payable or receivable amounts were ~~directors~~settled ~~and~~monthly. ~~certain~~The ~~third~~Company ~~parties~~used inthe ~~connection~~hedges ~~with~~to ~~various~~minimize ~~incentive~~the ~~awards,~~risk ~~including~~of ~~stock~~rising ~~options,~~fuel ~~restricted~~prices. ~~shares~~The hedges were not for trading purposes and ~~restricted~~were ~~share~~accounted ~~units~~for toas ~~4,750,000~~economic ~~shares~~hedges and were not designated as hedging instruments.

The ~~Plan~~Company ~~provides~~carries ~~for~~the ~~awards~~hedges ofat ~~restricted~~fair ~~shares~~value ~~subject~~on toits ~~restrictions~~balance onsheet ~~transferability~~ and ~~other~~considers ~~restrictions,~~its ifown ~~any,~~credit ~~imposed~~risk byin the ~~Compensation~~valuation ~~Committee. Such restrictions lapse under circumstances as determined by the Compensation Committee, including based upon a specified period~~ of ~~continued employment or upon~~ the ~~achievement~~diesel ~~of established performance criteria~~hedges. ~~Restricted~~ ~~shares~~Changes ~~have~~in ~~all of~~ the ~~rights~~fair value of ~~a stockholder, including~~ the ~~right~~hedge ~~to vote restricted shares and to receive dividends. Unvested restricted shares~~ are recorded ~~generally~~in ~~forfeited~~"Cost ~~upon termination~~ of ~~employment~~sales ~~during~~(excluding ~~the~~depreciation)" ~~applicable restriction period as provided for~~ in the ~~related~~consolidated ~~grant~~statements ~~documents. During the nine month period ended September 30, 2011, the Company granted 343,750 restricted shares to employees with a weighted average grant date fair value~~ of ~~$2.75.~~operations ~~One-third~~and ofin the ~~restricted~~operating ~~shares~~activities ~~vest,~~section ~~contingent on the employee's continuous service to the Company, on each~~ of ~~the~~cash ~~following dates: January 1, 2012, January 1, 2013, and January 1, 2014~~flows. NoPayments ~~grants were~~ made toor ~~employees~~received ~~during~~under the ~~three~~hedges ~~month period ended~~are ~~September 30,~~included ~~2011.~~in ~~The fair value of each restricted share is equal~~ the ~~closing~~caption ~~price~~"Cost of ~~the~~Sales ~~Company's~~(excluding ~~common~~depreciation)" ~~stock~~ on the ~~grant~~consolidated ~~date.~~statements ~~The~~of ~~aggregate~~operations ~~grant~~and ~~date~~realized ~~fair~~gains ~~value~~and islosses ~~recognized~~are ~~as compensation~~presented ~~expense~~in ~~using~~ the ~~straight-line~~operating ~~method~~activities ~~over~~section of the statements ~~vesting~~of ~~period,~~cash ~~adjusted for estimated forfeitures~~flows.

The ~~Plan~~following ~~provides~~table ~~for~~presents ~~option grants with terms, including exercise price and~~ the ~~time~~location ~~and method~~ of ~~exercise,~~all ~~set~~assets ~~by the Compensation Committee. However, the exercise price of options is not permitted to be less than the fair market value of the shares at the time of grant~~ and ~~the~~liabilities ~~term~~associated iswith ~~not permitted to be longer than ten years from~~ the date of grant of the options. Stock options for 573,300 shares of common stock were granted during the nine month period ended September 30, 2011. The options have seven-year terms and one-third of the options vest, contingent on the employeeCompany's ~~continuous~~derivative ~~service~~instruments tonot ~~the~~designated ~~Company,~~as onhedging ~~each~~instruments ofwithin the ~~following~~consolidated balance ~~dates~~sheet: January 1, 2012, January 1, 2013, and January 1, 2014. The options granted during the nine month period ended September 30, 2011 had weighted average exercise prices of $2.75 per share. No grants were made to employees during the three month period ended September 30, 2011.

		Asset (Liability) Derivatives

	Balance Sheet location	March 31, 2012		December 31, 2011
		(in thousands)
Diesel hedges	Debt Issue Costs and Other Assets (Accrued Expenses)	$	66	$	(86	)

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~ 2011

87. ~~Stock-based~~Financial ~~Compensation~~Derivative Instruments (Continued)

The ~~fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized using a straight-line~~ ~~method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. The~~ following ~~table~~tables ~~sets~~present ~~forth~~ the ~~information~~impact ~~about the weighted average grant date fair value~~ of ~~options~~derivative ~~granted~~instruments ~~during~~and ~~the~~their ~~nine~~location ~~months~~within ~~ended September 30, 2011 and~~ the ~~weighted~~condensed ~~average~~consolidated ~~assumptions~~financial ~~used~~statements: ~~for such grants.~~

			Nine Months Ended September 30, 2011
		Derivatives not designated as Hedging Instruments under ASC 718
Weighted average grant date fair value				$1.81
		Amount of Gain Recognized in Condensed Consolidated Statements of Operations
Weighted average assumptions used:
		Three months ended March 31,
	Expected volatility			110.3%
								Location of Gain Recognized in Condensed Consolidated Statements of Operations
	Expected lives			3 years
		2012			2011
	Risk-free interest rates			1.21%
		(in thousands)
	Expected dividend yield			0.00%
Diesel hedge:
Non-cash change in fair value		$	(152	)	$	(16	)
Cash settlements			(12	)		—
Total recognized gain		$	(164	)	$	(16	)	Cost of sales (excluding depreciation)

~~Expected volatility~~ Collateral isRequirements ~~based~~and onCounterparty anRisk. The ~~analysis~~Diesel ofHedge ~~historical~~required ~~volatility of~~ the Company's ~~common~~to ~~stock.~~provide ~~Expected~~cash ~~lives~~collateral ofin ~~options are determined based on projections of option exercise patterns. Risk-free interest rates are determined using~~ the ~~implied~~amount ~~yield currently available for zero coupon U.S. treasury issues with a remaining term equal to the expected life~~ of ~~the~~ ~~options~~$0. ~~The expected dividend yield is based on the September~~3 15million, ~~2008 announcement that the Company's quarterly cash dividends had been suspended indefinitely and the Company does not~~ ~~currently~~which ~~anticipate~~remained ~~paying~~outstanding ~~dividends~~as inof ~~the~~March 31, ~~future~~2012.

~~Total~~The ~~compensation~~Company ~~expense associated with the Plan~~ was ~~$0.6 million~~exposed ~~and~~to ~~$0.4 million~~risk ~~during~~of ~~the~~loss ~~three months ended September 30, 2011 and 2010, and $1.8 million and $1.4 million during the nine months ended September 30, 2011 and 2010, respectively. Such compensation expense was recorded~~ in ~~"Operating expenses" in~~ the ~~consolidated~~ ~~statements~~event of ~~operations.~~non-performance ~~Compensation~~by ~~expense for~~ the ~~nine~~counterparty ~~months~~to ~~ended~~the ~~September 30,~~diesel ~~2011 includes a $0~~hedges.~~2 million~~ ~~expense~~There ~~for~~were ~~stock~~no ~~awards~~instances toof non-~~employee~~performance by ~~members~~the ofcounterparty before the ~~Board~~Company ofsold ~~Directors.~~the Ashedge ofcontract ~~September~~on April 305, ~~2011, 743,708 shares were available for grant under the Plan~~2012.

98. ~~Net~~Fair ~~Income~~Value ~~(Loss)~~of ~~Per~~Financial ~~Share~~Instruments

The ~~computation~~Fair ofValue ~~net~~Measurements ~~income~~and ~~(loss)~~Disclosures ~~per~~Topic ~~share~~of isthe ~~based~~Codification onestablishes ~~net~~a ~~income~~hierarchy ~~(loss)~~for ~~divided~~ranking by the ~~weighted~~quality ~~average~~and ~~number~~reliability of ~~shares~~the ~~outstanding.~~information ~~Restricted~~used ~~shares include rights~~ to ~~receive dividends~~determine ~~that~~fair ~~are not subject to the risk of forfeiture even if the underlying restricted shares on which the dividends were paid do not vest~~values. ~~Since restricted shares do not include an obligation to~~ ~~share~~The instatement ~~losses,~~requires ~~they~~that ~~are~~assets ~~excluded from the basic net income (loss) per share calculation for loss periods. Accordingly, 604,642~~ and ~~407,613~~liabilities ~~shares~~carried ~~were~~at ~~excluded~~fair ~~from~~value ~~the~~be ~~computation~~classified ~~of basic net loss per share for the nine months ended September 30, 2011~~ and ~~2010,~~disclosed ~~respectively. However, these restricted shares were included~~ in ~~the~~one ~~computation~~ of ~~basic net income per share for~~ the following three ~~months~~ ~~ended~~categories: ~~September 30, 2011 and 2010, respectively.~~

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Unobservable inputs for the asset or liability.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~ 2011

98. ~~Net~~Fair ~~Income~~Value ~~(Loss)~~of ~~Per~~Financial ~~Share~~Instruments (Continued)

~~For~~ ~~the~~ The ~~purpose~~following oftable ~~computing~~and ~~diluted~~accompanying ~~earnings~~information ~~per~~presents ~~share,~~the ~~options~~estimated tofair ~~purchase~~values ~~1.5 million~~of ~~and~~our ~~1.0 million~~financial ~~shares~~instruments as of ~~common~~March 31, ~~stock~~2012 ~~were~~and ~~not~~December 31, ~~included~~2011 inand classification ~~the computation~~ of ~~diluted~~ ~~earnings~~such ~~per~~instruments ~~share~~in ~~for~~accordance with the ~~three~~Fair ~~months~~Value ~~ended~~Measurements ~~September 30, 2011~~ and ~~2010,~~Disclosures ~~because~~Topic ~~their~~of ~~effect~~the ~~was~~Codification: ~~anti-dilutive.~~

			Three Months Ended September 30,						Nine Months Ended September 30,
		March 31, 2012						December 31, 2011
			2011			2010			2011			2010
		Carrying Amount			Fair Value			Currying Amount			Fair Value
			(in thousands, except per share amounts)
		(in thousands)						(in thousands)
Net income (loss) for basic and diluted computation			$	4,892		$	8,990		$	(36,155	)	$	(11,475	)
Diesel hedge asset (liability)		$	66		$	66		$	(86	)	$	(86	)
Basic net income (loss) per share:
Long-term debt (including current portion)		$	450,832		$	365,444		$	450,805		$	342,418
	Weighted average common shares outstanding			23,394			22,949			22,742			22,450
	Net income (loss)		$	0.21		$	0.39		$	(1.59	)	$	(0.51	)
Diluted net income (loss) per share:
	Weighted average common shares outstanding			23,394			22,949			22,742			22,450
	Shares issuable from assumed conversion of restricted stock units and options			72			109			—			—
	Weighted average common shares outstanding, as adjusted			23,466			23,058			22,742			22,450
	Net income (loss)		$	0.21		$	0.39		$	(1.59	)	$	(0.51	)

The following ~~10.~~methods ~~Income~~and ~~Taxes~~ assumptions were used to estimate the fair value of each class of financial instruments:

•: The Diesel Hedges are a Level 2 fair value measure and are valued using the income approach to calculate the present value of the future cash flows expected to be paid under the hedge. The value of the fixed leg is the present value of the known fixed payments discounted at a market interest rate. The value of the floating leg is the present value of the projected floating payments based on the forward diesel prices discounted at a market interest rate. See Note 7 for additional information on our financial derivative instruments.
•: The fair value of the Company's debt is primarily based on quoted market prices for the debt and is considered a Level 2 fair value measure. See Note 6 for additional information on our short-term and long-term debt obligations.

~~The~~ ~~Company's effective tax rate of (5~~9.~~7%)~~ for the nine months ended September 30, 2011 differs from the Federal statutory income tax rate of 35% due to state income and margin taxes, the effect of permanent differences and a change in the Company's valuation allowance recorded against certain federal and state deferred tax assets. In the nine months ended September 30, 2011, the Company recorded an additional valuation allowance totaling $21.7 million relating to federal and state deferred assets. The total valuation allowance of $25.6 million is comprised of a $0.3 million of allowance against certain state NOL carryforwards and a $25.3 million allowance against the remaining federal and state deferred tax assets. The valuation allowance is necessary to reduce the recorded deferred tax assets to the amount management believes the Company is moreStock-~~likely-than-not~~based ~~to realize.~~ Compensation

~~Reddy~~ ~~Corp's~~ On ~~effective~~August 8, ~~tax~~2005, ~~rate~~the Board of ~~35.7%,~~Directors ~~calculated~~and onstockholders aof ~~stand~~Reddy Holdings approved the Reddy Ice Holdings, Inc. Long-~~alone~~Term ~~basis~~Incentive and Share Award Plan (the "Incentive Plan"). On April 29, ~~differs~~2010 ~~from~~the stockholders of Reddy Holdings approved an amendment to the ~~Federal~~Incentive ~~statutory~~Plan, ~~tax~~which ~~rate~~increased the number of ~~35%~~shares ~~due~~of common stock available to ~~state~~be ~~income~~issued to employees, directors and ~~margin~~certain ~~taxes~~third parties in connection with various incentive awards, including stock options, restricted shares and ~~the~~restricted ~~effect~~share ~~of permanent~~units ~~differences~~to 4,750,000 shares.

The ~~amount~~Incentive ofPlan ~~gross~~provides ~~unrecognized~~for ~~tax~~awards ~~benefits~~of ~~related~~restricted shares subject to ~~uncertain~~restrictions ~~tax~~on ~~positions~~transferability ~~was~~and $1other restrictions, if any, imposed by the Compensation Committee.~~3 million~~ atSuch restrictions ~~September 30~~lapse under circumstances as determined by the Compensation Committee, ~~2011~~including based upon a specified period of continued employment or upon the achievement of established performance criteria. Restricted shares have all of the rights of a stockholder, including the right to vote restricted shares and ~~December~~to receive dividends. Unvested restricted shares are generally forfeited upon termination of employment during the applicable restriction period as provided for in the related grant documents. During the three month period ended March 31, ~~2010~~2012, ~~and~~the ~~included~~Company ~~accrued~~granted ~~interest~~595,000 ~~and~~restricted ~~penalties~~shares to employees with a weighted average grant date fair value of $0.~~3 million~~24. asOne-third of ~~September 30,~~the ~~2011~~restricted ~~and~~shares ~~December 31~~vest, ~~2010.~~contingent ~~The~~on ~~total~~the ~~amount~~employee's ofcontinuous ~~interest~~service ~~and~~to the ~~penalties~~Company, ~~net~~on each of ~~federal~~the ~~benefit~~following dates: January 1, ~~recognized~~2013, inJanuary 1, ~~the statement~~2014, ofand ~~operations~~January 1, ~~for~~2015. During the ~~nine~~three ~~months~~month period ended ~~September~~March 3031, 2011, ~~and~~the ~~2010~~Company ~~was~~granted 343,750 ~~immaterial~~restricted shares to employees with a weighted average grant date fair value of $2.75. One-third of the restricted shares vest, contingent on the employee's continuous service to the

As a result of net operating loss carryforwards, the Company's tax years from 1998 through 2010 remain open and subject to examination by the Internal Revenue Service and/or certain state taxing authorities.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

119. ~~Other~~Stock-based ~~Charges~~ Compensation (Continued)

Company, Inon ~~connection~~each ~~with~~of the ~~Company's~~following ~~ongoing~~dates: ~~remediation~~January 1, ~~efforts~~2012, ~~related~~January 1, to2013, ~~the~~and ~~material~~January 1, ~~weakness~~2014. inThe ~~internal~~fair ~~control~~value ~~over~~of ~~financial~~each ~~reporting~~restricted ~~identified~~share inis ~~2010,~~equal wethe ~~determined~~closing ~~during~~price of the Company's ~~third~~common ~~quarter~~stock ofon ~~2011~~the ~~that~~grant ~~the~~date. ~~recorded~~The ~~net~~aggregate ~~book~~grant date fair value ofis ~~our~~recognized ~~equipment~~as ~~and~~compensation ~~machinery~~expense ~~was~~using ~~overstated~~the bystraight-line ~~approximately~~method $1over the vesting period, adjusted for estimated forfeitures.~~9 million.~~

WeThe ~~have~~Incentive ~~considered~~Plan ~~the~~provides ~~impact~~for ofoption ~~this~~grants ~~error~~with terms, including ~~the~~exercise ~~assessment~~price ofand ~~any~~the ~~potential~~time ~~impact~~and onmethod ~~prior~~of ~~periods~~exercise, ~~and~~set ~~loan~~by ~~covenants~~the ~~and~~Compensation ~~concluded~~Committee. ~~that~~However, the ~~error~~exercise ~~was~~price of options is not ~~material~~permitted to ~~our financial~~be ~~statements~~less ~~for~~than ~~any~~the ~~prior~~fair ~~period.~~market Asvalue of the ~~amounts~~shares ~~involved~~at ~~are~~the time of grant and the term is not ~~material~~permitted to be longer than ten years from the ~~Company's~~date ~~projected~~of ~~annual~~grant ~~results~~of the options. Stock options for 573,300 shares of common stock were granted during the ~~year~~three ~~ending~~month ~~December~~period ended March 31, 2011,. orThe tooptions ~~the~~have ~~trend~~seven-year terms and one-third of ~~earnings,~~the options vest, contingent on the ~~Company~~employee's ~~recorded~~continuous service to the ~~$1.9 million~~Company, ~~cumulative~~on ~~effect~~each of ~~this~~the ~~error~~following asdates: anJanuary 1, ~~out~~2012, ofJanuary 1, ~~period~~2013, ~~charge~~and inJanuary 1, 2014. The options granted during the ~~quarter~~three month period ended ~~September~~March 3031, 2011 ashad ~~"Impairment~~weighted average exercise prices of ~~long-lived~~$2.75 ~~assets"~~per share. No stock options were granted during the three months ended March 31, 2012.

The fair 12value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model. ~~Related~~Compensation ~~Parties~~ expense is recognized using a straight-line method over the shorter of the vesting period or required service period adjusted for estimated forfeitures. The following table sets forth the information about the weighted average grant date fair value of options granted during the three months ended March 31, 2011 and the weighted average assumptions used for such grants.

The Company has entered into an agreement with an affiliate in which the Company has a cost method investment. Under the agreement the Company purchases equipment from a third party vendor on behalf of its affiliate and extends payment terms to the affiliate that are comparable to those the Company receives from its vendor. The Company has financed the purchase of approximately $2.6 million of equipment under this agreement, of which approximately $0.6 million has been repaid through September 30, 2011.



Weighted average grant date fair value	$1.81
Weighted average assumptions used:
Expected volatility	110.3	%
Expected lives	3 years
Risk-free interest rates	1.21	%
Expected dividend yield	0.00	%

Expected volatility 13is based on an analysis of historical volatility of the Company's common stock. ~~Commitments~~Expected lives of options are determined based on projections of option exercise patterns. Risk-free interest rates are determined using the implied yield currently available for zero coupon U.S. treasury issues with a remaining term equal to the expected life of the options. The expected dividend yield is based on the September 15, 2008 announcement that the Company's quarterly cash dividends had been suspended indefinitely and ~~Contingencies~~ the Company does not currently anticipate paying dividends in the future.

~~The~~Total compensation ~~following~~expense isassociated awith ~~discussion of~~ the ~~Company's~~Incentive ~~significant~~Plan ~~legal~~was ~~matters~~$0.4 million ~~The~~and ~~Company~~$0.6 million isduring ~~involved~~the inthree ~~various~~months ~~claims,~~ended ~~suits~~March 31, ~~investigations,~~2012 and ~~legal~~2011, ~~proceedings~~respectively. Such ~~The~~compensation ~~Company~~expense ~~accrues~~was ~~a liability~~recorded ~~when~~in it"Operating ~~believes~~expenses" ~~that~~in itthe isconsolidated ~~both~~statements ~~probable~~of ~~that~~operations. aCompensation ~~liability~~expense ~~has~~for ~~been~~the ~~incurred~~three ~~and~~months ~~that~~ended itMarch 31, ~~can~~2011 ~~reasonably~~includes ~~estimate~~a $0.1 million ~~the~~accrual ~~amount~~for Board of Directors stock awards earned during the ~~loss.~~period Atand ~~September 30,~~granted in May of 2011. ~~and~~As ~~December~~of March 31, ~~2010~~ 2012, no161,654 ~~accruals~~shares ~~had~~were ~~been~~available ~~made~~for ingrant ~~connection~~under ~~with~~ the Incentive ~~matters discussed below~~Plan.

Antitrust Matters

In March 2008, the Company and certain of its employees, including members of its management, received subpoenas issued by a federal grand jury sitting in the Eastern District of Michigan seeking documents and information in connection with an investigation by the Antitrust Division of the United States Department of Justice ("DOJ") into possible antitrust violations in the packaged ice industry. In addition, on March 5, 2008, federal officials executed a search warrant at the Company's corporate office in Dallas, Texas. Current and former employees were also subpoenaed to testify and testified before a federal grand jury in the Eastern District of Michigan and before a federal grand jury in the Southern District of Ohio. On October 29, 2010, the Company was informed that the Antitrust Division of the DOJ would take no action against the Company or any of its employees in connection with its investigation of the packaged ice industry. In January 2011, counsel for the Company confirmed that the Antitrust Division of the DOJ has formally closed its investigation of the packaged ice industry.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

139. ~~Commitments~~Stock-based ~~and~~Compensation ~~Contingencies~~ (Continued)

~~investigation~~ All ofoutstanding ~~agreements~~options inwill ~~restraint~~be ofcancelled ~~trade~~upon ~~and/or price fixing with respect to~~ the ~~market for packaged ice. The~~ Company's ~~has~~emergence been advised that these CIDs are related to a multi-state antitrust investigation of the packaged ice industry. The Company is cooperating with the investigation and has complied with all requests for documents and information regarding these matters. The Company may in the future receive additional civil investigative demands or similar information requests from ~~states~~protection ~~participating~~under in the ~~multi-state~~bankruptcy ~~investigation or conducting their own investigations~~code.

~~At this~~ ~~time,~~10. ~~the~~Net ~~Company~~Loss isPer unable to predict the outcome of that investigation, the possible loss or possible range of loss, if any, associated with the resolution of that investigation or any potential effect the investigation may have on the Company, its employees or operations. Share

~~Beginning~~ in The ~~2008~~computation aof ~~number~~net ofloss ~~lawsuits,~~per ~~including~~share ~~putative~~is ~~class~~based ~~action~~on ~~lawsuits,~~net ~~were~~loss ~~filed~~divided ~~against~~by the ~~Company,~~weighted ~~Reddy~~average ~~Ice~~number Corporation, Home City Ice Company, Arctic Glacier Income Fund, Arctic Glacier, Inc. and Arctic Glacier International, Inc., in various federal and state courts in multiple jurisdictions alleging violations of ~~federal~~shares ~~and state antitrust laws and related claims and seeking damages and injunctive relief~~outstanding. ~~One~~Restricted ofshares ~~the~~include ~~state~~rights ~~court cases filed against the Company was dismissed. Pursuant~~ to anreceive ~~Order~~dividends ~~from~~that ~~the Judicial Panel on Multidistrict~~are ~~Litigation,~~not ~~the~~subject ~~other~~to ~~civil actions have been transferred and consolidated for pretrial proceedings in~~ the ~~United~~risk ~~States District Court for the Eastern District~~ of ~~Michigan.~~forfeiture ~~Home~~even ~~City~~if ~~entered into a settlement agreement with~~ the ~~direct~~underlying ~~purchaser~~restricted ~~plaintiffs~~shares ~~that~~on ~~was~~which ~~approved by~~ the ~~Court~~dividends onwere ~~February 22,~~paid ~~2011.~~do Onnot ~~March 30, 2011, Arctic Glacier announced that it had entered into a proposed settlement agreement with the direct purchaser plaintiffs~~vest. ~~Preliminary~~Since ~~approval~~restricted ofshares ~~that~~do ~~settlement~~not ~~was~~include ~~granted~~an onobligation ~~July 20,~~to ~~2011,~~share ~~and~~in ~~a final fairness hearing was held on October 28~~losses, they ~~2011.~~are ~~The~~excluded ~~Court~~from ~~has taken~~ the ~~motion~~basic ~~for~~net ~~final~~loss ~~approval~~per ~~under~~share ~~advisement~~calculation. ~~Discovery is ongoing regarding the claims asserted on behalf of direct purchasers against the Company. On March 11~~Accordingly, ~~2011~~898,582 ~~the Court entered an Order granting in part~~ and ~~denying in part motions to dismiss the indirect purchaser claims. On May 25~~620,183 ~~2011,~~restricted ~~the~~shares ~~indirect~~were ~~purchaser~~excluded ~~plaintiffs~~from ~~filed a Consolidated Class Action Complaint asserting violations of~~ the ~~antitrust~~computation ~~laws~~ of ~~various~~basic ~~states~~net ~~and~~loss ~~related~~per ~~claims.~~share ~~The~~for ~~Company and~~ the ~~other~~three ~~defendants filed motions to dismiss the Consolidated~~months ~~Class~~ended ~~Action Complaint. Those motions were heard on October~~March 2831, ~~2011,~~2012 and ~~were~~2011, ~~taken under advisement by the Court~~respectively.

OnFor ~~March 1, 2010, a putative class action Statement of Claim was filed against~~ the ~~Company~~purpose ~~in the Ontario Superior Court~~ of ~~Justice~~computing indiluted ~~Canada~~earnings ~~alleging~~per ~~violations of Part VI of the Competition Act and seeking general damages~~share, ~~punitive~~options ~~and~~to ~~exemplary~~purchase ~~damages,~~2.1 million ~~pre-judgment~~ and ~~post-judgment interest, and costs~~0. ~~On March~~6 8,million ~~2010,~~shares ~~a putative class action Statement~~ of ~~Claim~~common ~~was~~stock ~~filed~~were ~~against~~not ~~the~~included ~~Company~~ in the ~~Court~~computation of diluted ~~Queen's~~earnings ~~Bench~~per ofshare ~~Alberta,~~for ~~Judicial~~the ~~District~~three ofmonths ~~Calgary,~~ended ~~in Canada~~March 31, ~~alleging~~2012 ~~violations of Part VI of the Competition Act~~ and ~~seeking general damages~~2011, ~~special and pecuniary damages~~respectively, ~~punitive~~because ~~and~~their ~~exemplary~~effect ~~damages,~~was ~~interest and costs~~anti-dilutive.

An agreement has been reached to resolve the class actions filed in Canada against Reddy Ice and Arctic Glacier, Inc. The agreement provides that Arctic Glacier will pay CDN $2,000,000, all claims asserted against Reddy Ice and Arctic Glacier in both Ontario and Alberta will be dismissed, and Reddy Ice and Arctic Glacier will be granted full and final releases with regard to those claims. Reddy Ice is not making any payment in connection with this settlement. The agreement is subject to the execution of final settlement documents and court approval.

	Three Months Ended March 31,

	2012			2011
	(in thousands, except per share amounts)
Net loss for basic and diluted computation	$	(44,342	)	$	(39,101	)

Basic and diluted net loss per share:
Weighted average common shares outstanding		23,082			22,689

Net loss	$	(1.92	)	$	(1.72	)

11. Income Taxes

The Company's effective tax rate of (4.7)% for the three months ended March 31, 2012 differs from the Federal statutory income tax rate of 35% due to state income and margin taxes, the effect of permanent differences and a change in the Company's valuation allowance recorded against certain federal and state deferred tax assets. In the three months ended March 31, 2012, the Company recorded an additional valuation allowance totaling $16.3 million relating to federal and state deferred tax assets. The total valuation allowance of $47.3 million is comprised of a $0.3 million of allowance against certain state NOL carryforwards and a $47.0 million allowance against the remaining deferred tax assets. The valuation allowance is necessary to reduce the recorded deferred tax assets to the amount management believes the Company is more-likely-than-not to realize.

Reddy Corp's effective tax rate of (5.2)% calculated on a stand-alone basis, differs from the Federal statutory tax rate of 35% due to state income and margin taxes, the effect of permanent differences, and a change in the Company's valuation allowance recorded against certain federal and state deferred tax assets.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

1311. ~~Commitments~~Income ~~and~~Taxes ~~Contingencies~~ (Continued)

~~One~~The ~~direct~~amount ~~action~~of ~~lawsuit~~gross ~~was~~unrecognized ~~filed~~tax ~~against~~benefits usrelated into ~~the~~uncertain ~~United~~tax ~~States~~positions ~~District~~was ~~Court~~$1.3 million ~~for~~at ~~the~~March 31, ~~Eastern~~2012 ~~District of Michigan asserting claims based on alleged violations of federal~~ and ~~state antitrust~~December 31, ~~laws~~2011, ~~RICO~~which ~~and~~included ~~tortious~~accrued interest ~~interference~~ and ~~seeking damages, civil~~ penalties ~~and~~of ~~injunctive relief~~$0.3 million ~~The~~as ~~defendants~~of ~~filed motions to dismiss that case. On May~~March 2931, ~~2009,~~2012 ~~the~~and ~~Court dismissed all claims against us in that lawsuit. On June~~December 2931, ~~2009,~~2011. ~~the~~The ~~plaintiff~~total ~~filed~~amount aof ~~motion~~interest ~~for reconsideration,~~ and ~~on July 17~~penalties, ~~2009~~net ~~the~~of ~~Court~~federal ~~reversed~~benefit, recognized in ~~part,~~the ~~its May 29,~~statement ~~2009~~of ~~order,~~operations ~~reinstating~~for ~~only~~ the ~~RICO~~three ~~claim~~months ~~against~~ended ~~us. The dismissal of the remaining claims was not affected. On August~~March 1031, ~~2009,~~2012 ~~the~~and ~~Company~~2011 ~~filed~~was ~~an answer to the reinstated claim~~immaterial. ~~Discovery~~ ~~is ongoing in that matter.~~

OnAs ~~April 20, 2011, an Order was entered unsealing~~ a ~~Qui~~result ~~Tam~~of ~~complaint~~net ~~filed~~operating onloss ~~June 25~~carryforwards, ~~2008, by Martin McNulty, on behalf of~~ the ~~United~~Company's ~~States,~~tax ~~against~~years ~~Reddy~~from ~~Ice Holdings, Inc.,~~1998 ~~Reddy~~through ~~Ice~~2011 ~~Corporation,~~remain ~~Arctic~~open ~~Glacier Income Fund, Arctic Glacier, Inc., Arctic Glacier International, Inc.,~~ and ~~Home~~subject ~~City~~to ~~Ice~~examination ~~Company, Inc.~~by ~~The complaint alleges violations of~~ the ~~federal~~Internal ~~False~~Revenue ~~Claims~~Service ~~Act by presentation of false claims, making~~ and/or ~~using a false record or statement, and conspiracy to defraud, and seeks damages, civil penalties, attorney~~certain ~~fees~~state ~~and~~taxing ~~costs~~authorities. ~~The Government has elected not to intervene in that case and the Company and the other defendants have filed motions to dismiss that complaint. Those motions are set to be heard on November 16, 2011.~~

~~The Company~~ ~~intends to vigorously defend the pending lawsuits~~12. AtCommitments ~~this~~and time, the Company is unable to predict the outcome of these lawsuits, the possible loss or possible range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations. Contingencies

The ~~Stockholder~~following ~~Litigation~~ is a discussion of the Company's significant legal matters. The Company is involved in various claims, suits, investigations, and legal proceedings. The Company accrues a liability when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. At March 31, 2012, accruals of $2.5 million were recorded in connection with the matters discussed below. No accruals in connection with the matters discussed below were recorded at March 31, 2011.

~~Beginning~~ onAntitrust August 8, 2008, putative class action complaints were filed in the United States District Court for the Eastern District of Michigan asserting claims under the federal securities laws against the Company and certain of its current or former senior officers. On July 17, 2009, the Court consolidated the actions and appointed a lead plaintiff and interim lead plaintiff's counsel. The lead plaintiff filed a consolidated amended complaint on November 2, 2009. That complaint purports to assert claims on behalf of an alleged class of purchasers of the Company's common stock and alleges that the defendants misrepresented and failed to disclose the existence of, and the Company's alleged participation in, an alleged antitrust conspiracy in the packaged ice industry. The Company and the other defendants have filed an answer in that case, a briefing schedule relating to class certification has been entered, and discovery is ongoing. Matters

~~Two stockholder~~In ~~derivative~~March ~~actions~~2008, ~~have~~the ~~been~~Company ~~filed~~and oncertain ~~the~~of ~~Company's~~its ~~behalf~~employees, inincluding ~~state~~members ~~district~~of ~~court~~its inmanagement, ~~Dallas~~received ~~County,~~subpoenas ~~Texas,~~issued ~~naming~~by asa ~~defendants,~~federal grand ~~among~~jury ~~others,~~sitting ~~certain~~in ~~current~~the ~~and~~Eastern ~~former officers~~District of Michigan seeking documents and ~~members~~information ofin connection with an investigation by the ~~Company's~~Antitrust ~~Board~~Division of ~~Directors.~~the ~~Those~~United ~~cases~~States ~~have~~Department ~~been~~of ~~consolidated~~Justice ("DOJ") ininto ~~the~~possible ~~68th Judicial~~antitrust ~~District~~violations ~~Court~~in ofthe ~~Dallas~~packaged ~~County,~~ice ~~Texas~~industry. OnIn ~~August~~addition, on March 15, ~~2011~~2008, federal officials executed a search warrant at the ~~Court granted~~Company's corporate office in ~~part~~Dallas, Texas. Current and ~~denied~~former inemployees ~~part~~were ~~Special~~also ~~Exceptions~~subpoenaed ~~filed~~to bytestify ~~the~~and ~~defendants.~~testified ~~The~~before ~~Company~~a ~~filed~~federal agrand ~~petition~~jury ~~with~~in the ~~Court~~Eastern District of ~~Appeals~~Michigan ~~seeking~~and before a ~~writ~~federal ofgrand ~~mandamus~~jury ~~relating~~in to the ~~denial~~Southern District of ~~certain Special Exceptions~~Ohio. On ~~September~~October 129, ~~2011~~2010, athe ~~Third~~Company ~~Amended~~was ~~Consolidated~~informed ~~Shareholder~~that ~~Derivative~~the ~~Petition~~Antitrust ~~was~~Division ~~filed~~of inthe ~~that~~DOJ ~~matter.~~would ~~That~~take ~~Third~~no ~~Amended~~action ~~Petition~~against ~~asserts~~the ~~claims~~Company ~~for~~or ~~breach~~any of ~~fiduciary~~ ~~duty,~~its ~~unjust~~employees ~~enrichment,~~in ~~abuse~~connection with its investigation of ~~control,~~the ~~and~~packaged ~~gross~~ice ~~mismanagement~~industry. ~~and~~In ~~seeks~~January ~~damages~~2011, ~~equitable~~counsel ~~relief,~~for ~~attorney~~the ~~fees,~~Company ~~expenses~~confirmed ~~and~~that ~~costs.~~the OnAntitrust ~~October 10,~~Division ~~2011,~~of the ~~petition~~DOJ ~~for~~had aformally ~~writ of~~closed ~~mandamus~~its ~~was~~investigation ~~conditionally~~of ~~granted~~the bypackaged ~~the~~ice industry.

In March 2008, June 2008, and June 2009, the Company was served with antitrust civil investigative demands ("CIDs") by the Offices of the Attorneys General of the States of Florida, Arizona and Michigan, respectively, requesting the production of documents and information relating to an investigation of agreements in restraint of trade and/or price fixing with respect to the market for packaged ice. The Company was advised that those CIDs were related to a multi-state antitrust investigation of the packaged ice industry. The Company has cooperated with the investigation and has complied with all requests for documents and information regarding these matters. The Company may in the future receive additional civil investigative demands or similar information requests from states participating in the multi-state investigation or conducting their own investigations. However, it has been several months since the Company had any communication with the representatives of the states regarding this investigation.

Table of Contents

REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2011~~2012 AND ~~2010~~2011

1312. Commitments and Contingencies (Continued)

~~Court~~ At ofthis ~~Appeals~~time, ~~and~~ the ~~trial~~Company ~~court~~is ~~was~~unable ~~ordered~~ to ~~grant~~predict the ~~Special~~outcome ~~Exception~~of ~~relating~~that toinvestigation, ~~demand~~the ~~futility.~~possible ~~The~~loss ~~plaintiffs~~or ~~filed~~possible arange ~~Motion~~of ~~for~~loss, ~~Rehearing~~if any, ~~which~~associated ~~was~~with ~~denied~~the onresolution ~~November 7,~~of ~~2011.~~that ~~The~~investigation ~~trial~~or ofany ~~that~~potential ~~case~~effect isthe ~~currently~~investigation ~~set~~may ~~for~~have ~~March 20~~on the Company, ~~2012~~its employees or operations.

~~The~~Beginning ~~Company~~in ~~intends~~2008 toa ~~vigorously~~number ~~defend~~of ~~the~~lawsuits, ~~pending~~including putative class action lawsuits, were filed against the Company, Reddy Ice Corporation, Home City Ice Company, Arctic Glacier Income Fund, Arctic Glacier, Inc. Atand ~~this~~Arctic ~~time~~Glacier International, Inc., in various federal and state courts in multiple jurisdictions alleging violations of federal and state antitrust laws and related claims and seeking damages and injunctive relief. One of the state court cases filed against the Company iswas ~~unable~~dismissed. Pursuant to ~~predict~~an Order from the ~~outcome~~Judicial ofPanel ~~these~~on ~~lawsuits~~Multidistrict Litigation, the ~~possible~~other ~~loss~~civil oractions ~~possible~~have ~~range~~been transferred and consolidated for pretrial proceedings in the United States District Court for the Eastern District of ~~loss~~Michigan (the "District Court"). Home City entered into a settlement agreement with the direct purchaser plaintiffs that was approved by the Court on February 22, 2011. On March 30, 2011, Arctic Glacier announced that ifit ~~any~~had entered into a proposed settlement agreement with the direct purchaser plaintiffs. That settlement was approved by the Court on December 13, ~~associated~~2011. These putative class actions in the District Court are currently stayed as to the Company as a result of the filing of the Bankruptcy Cases. The Company has reached a settlement agreement in principal with the ~~resolution~~direct purchaser plaintiffs in the Bankruptcy Cases. That settlement provides for a payment of ~~these~~$0.75 million ~~lawsuits~~upon orconsummation ~~any~~of ~~potential~~the ~~effect~~settlement ~~they~~and ~~may~~an ~~have~~additional on$0.25 million if the sale with Arctic Glacier closes, all in return for release of the Company orand ~~its~~dismissal ~~operations~~of all claims against the Company with prejudice. The agreement is subject to the execution of final settlement documents and Bankruptcy Court approval.

On May 25, ~~Other~~2011, ~~Matters~~ the indirect purchaser plaintiffs filed a Consolidated Class Action Complaint asserting violations of the antitrust laws of various states and related claims. The Company and the other defendants filed motions to dismiss the Consolidated Class Action Complaint. Those motions were heard on October 28, 2011, and the Court granted in part and denied in part the motions to dismiss on December 12, 2011. The Company filed an answer to the remaining claims on December 27, 2011. Home City entered into a proposed settlement agreement with the indirect purchaser plaintiffs on or about March 7, 2012. That settlement is subject to court approval. The Company has also entered into a proposed settlement agreement with the indirect purchaser plaintiffs in the Bankruptcy Cases. That settlement provides for a payment of $0.7 million in return for release of the Company and dismissal of all claims against the Company with prejudice. The agreement further provides for release of claims asserted in a putative class action filed against certain current and former officers and directors of the Company and for dismissal of that case with prejudice. The agreement is subject to the execution of final settlement documents and Bankruptcy Court approval. This case is stayed as to the Company as a result of the filing of the Bankruptcy Cases. The Bankruptcy Court granted preliminary approval of the settlement agreement on May 11, 2012.

~~The~~On March 1, ~~Company~~2010, isa ~~also~~putative ~~involved~~class inaction ~~various~~Statement ~~other~~of ~~claims,~~Claim ~~lawsuits~~was ~~and~~filed ~~proceedings~~against ~~arising~~the Company in the ~~ordinary~~Ontario ~~course~~Superior Court of ~~business,~~Justice ~~including intellectual~~in ~~property~~Canada ~~matters.~~alleging ~~There~~violations ~~are~~of ~~uncertainties~~Part VI of ~~inherent~~the inCompetition ~~the~~Act ~~ultimate~~and ~~outcome~~seeking ofgeneral ~~such~~damages, ~~matters~~punitive and itexemplary isdamages, ~~difficult~~pre-judgment toand ~~determine~~post-judgment ~~the~~interest, ~~ultimate~~and costs. ~~that~~On weMarch 8, ~~may~~2010, ~~incur.~~a Weputative class ~~believe~~action ~~the~~Statement ~~resolution~~ of ~~such~~Claim ~~other~~was ~~ordinary~~filed ~~course~~against ~~uncertainties~~the ~~and~~Company in the ~~incurrence~~Court of ~~such~~Queen's ~~costs~~Bench ~~will~~of ~~not~~Alberta, ~~have~~Judicial aDistrict ~~material~~of ~~adverse~~Calgary, ~~effect~~in ~~on our consolidated financial position~~Canada, ~~results~~alleging ~~of operations or cash flows.~~

As a result of the decline in the Company's stock price and the reduction in its stockholders' equity resulting from its decline in earnings, the Company was notified by the New York Stock Exchange ("NYSE") in September of 2011 that it was not in compliance with the NYSE continued listing standards. On November 7th, 2011, the Company filed a plan with the NYSE to achieve compliance with the continued listing standards within 18 months. If the plan is accepted by the NYSE, the NYSE will monitor the Company's performance under the plan on a quarterly basis. To the extent (i) the NYSE does not accept the Company's plan, (ii) the Company cannot meet the applicable standards within the 18 month period if its plan is accepted, or (iii) the NYSE determines the Company is not satisfying its obligations under the plan to achieve compliance, the Company's stock could be delisted from NYSE.

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

12. Commitments and Contingencies (Continued)

violations of Part VI of the Competition Act and seeking general damages, special and pecuniary damages, punitive and exemplary damages, interest and costs.

Prior to the filing of the Company's Bankruptcy Cases, an agreement had been reached to resolve the class actions filed in Canada against Reddy Ice and Arctic Glacier, Inc. The agreement provides that Arctic Glacier will pay CDN $2.0 million, all claims asserted against Reddy Ice and Arctic Glacier in both Ontario and Alberta will be dismissed, and Reddy Ice and Arctic Glacier will be granted full and final releases with regard to those claims. Reddy Ice is not making any payment in connection with this settlement. The agreement is subject to the execution of final settlement documents and court approval. The Company is unable to predict what, if any, effect the filing of bankruptcy by Arctic Glacier may have on this settlement. The Company believes those class actions are stayed as to the Company as a result of the filing of the Bankruptcy Cases.

One direct action lawsuit was filed against us in the United States District Court for the Eastern District of Michigan asserting claims based on alleged violations of federal and state antitrust laws, RICO and tortious interference and seeking damages, civil penalties and injunctive relief. The defendants filed motions to dismiss that case. On May 29, 2009, the Court dismissed all claims against us in that lawsuit. On June 29, 2009, the plaintiff filed a motion for reconsideration, and on July 17, 2009 the Court reversed, in part, its May 29, 2009 order, reinstating only the RICO claim against us. The dismissal of the remaining claims was not affected. On August 10, 2009, the Company filed an answer to the reinstated claim. That case is stayed as to the Company as a result of the filing of the Bankruptcy Cases.

On April 20, 2011, an Order was entered unsealing a Qui Tam complaint filed on June 25, 2008, by Martin McNulty, on behalf of the United States, against Reddy Ice Holdings, Inc., Reddy Ice Corporation, Arctic Glacier Income Fund, Arctic Glacier, Inc., Arctic Glacier International, Inc., and Home City Ice Company, Inc. The complaint alleged violations of the federal False Claims Act by presentation of false claims, making or using a false record or statement, and conspiracy to defraud, and sought damages, civil penalties, attorney fees and costs. The Government elected not to intervene in that case and the Company and the other defendants filed motions to dismiss that complaint. Those motions were granted, the complaint was dismissed, and a final judgment was entered in favor of the defendants on December 7, 2011.

The Company intends to vigorously defend all pending lawsuits and related claims in the Bankruptcy Cases, except as otherwise settled or resolved as described above. At this time, the Company is unable to predict the outcome of the above non-settled lawsuits in light of the Bankruptcy Cases. The Company has accrued $1.5 million in its financial statements in respect of the amounts of the potential settlements described above as of March 31, 2012.

Stockholder Litigation

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

12. Commitments and Contingencies (Continued)

assert claims on behalf of an alleged class of purchasers of the Company's common stock and alleges that the defendants misrepresented and failed to disclose the existence of, and the Company's alleged participation in, an alleged antitrust conspiracy in the packaged ice industry. On April 4, 2012, a tentative settlement agreement was reached with the Plaintiffs pursuant to which the Company will pay $1.0 million in exchange for full and final releases of all claims asserted against the Company and the individual defendants. That agreement is subject to the execution of final settlement documents and Bankruptcy Court approval. On April 18, 2012, an order was entered by the United States District Court for the Eastern District of Michigan transferring the stockholder litigation to the United States District Court for the Northern District of Texas. The United States District Court for the Northern District of Texas subsequently referenced the case to the Bankruptcy Court.

Two stockholder derivative actions were filed on the Company's behalf in state district court in Dallas County, Texas, naming as defendants, among others, certain current and former officers and members of the Company's Board of Directors. Those cases were consolidated in the 68th Judicial District Court of Dallas County, Texas. On August 1, 2011, the Court granted in part and denied in part Special Exceptions filed by the defendants. The Company filed a petition with the Court of Appeals seeking a writ of mandamus relating to the denial of certain Special Exceptions. On September 1, 2011, a Third Amended Consolidated Shareholder Derivative Petition was filed in that matter. That Third Amended Petition asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement and seeks damages, equitable relief, attorney fees, expenses and costs. On October 10, 2011, the petition for a writ of mandamus was conditionally granted by the Court of Appeals and the trial court was ordered to grant the Special Exception relating to demand futility. The plaintiffs filed a Motion for Rehearing, which was denied on November 7, 2011. On November 14, 2011, the Court entered an Order granting Special Exception No.1 and requiring the plaintiffs to re-plead. This case was dismissed, with prejudice, on March 20, 2012.

Other Matters

We are also involved in various other claims, lawsuits and proceedings arising in the ordinary course of business, including intellectual property matters. There are uncertainties inherent in the ultimate outcome of such matters and it is difficult to determine the ultimate costs that we may incur. We believe the resolution of such other ordinary course uncertainties and the incurrence of such costs will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

As a result of the decline in the Company's stock price and the reduction in its stockholders' equity resulting from its decline in earnings, the Company was notified by the New York Stock Exchange ("NYSE") on December 21, 2011 that the common stock of the Company (ticker symbol—FRZ) was to be suspended prior to the market opening on Thursday, December 29, 2011. On December 28, 2011, the Company announced that its common stock would be quoted on the OTCBB and OTCQB beginning Thursday, December 29, 2011. Trading of the Company's common stock on the NYSE and the Company's trading symbol "FRZ" was discontinued as of the close of the market on December 28, 2011. Effective Thursday, December 29, 2011, the Company's stock was quoted on the OTCBB and OTCQB under the symbol "RDDY". As a result of the Company's bankruptcy filing, on April 12, 2012 the Company's symbol was changed to "RDDYQ".

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REDDY ICE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

13. Related Parties

The Company has entered into agreements with an affiliate in which the Company has a cost method investment. Under the equipment purchase agreement, the Company purchases equipment from a third party vendor on behalf of its affiliate and extends payment terms to the affiliate that are comparable to those the Company receives from its vendor. Since inception, the Company has financed the purchase of approximately $3.7 million of equipment under this agreement, of which approximately $2.6 million has been repaid through March 31, 2012. The remaining $1.1 million receivable is recorded on the consolidated balance sheets as "Notes receivable from affiliate" as of March 31, 2012. The Company also has operating agreements in place with the affiliate whereby the Company provides equipment maintenance services and sales support to the affiliate and the affiliate provides certain management services to the Company in connection with Company-owned equipment. The Company had a $0.5 million receivable from affiliate related to these operating agreements included in "Accounts receivable, net" on the consolidated balance sheets as of March 31, 2012 and December 31, 2011. The Company recognized approximately $0.1 million and $0.1 million in revenues and $0.3 million and $0.2 million in expenses related to the agreement during the periods ended March 31, 2012 and 2011, respectively.

The Company also recognized $0.2 million in related party rent expense during the periods ended March 31, 2012 and 2011. In addition, as of March 31, 2012 and December 31, 2011, the Company had a related party receivable of $0.3 million from the owner of an entity acquired during 2011 that is currently employed by the Company.

In March of 2012, Reddy Corp issued an Intercompany Promissory Note to Reddy Holdings for the principal amount of approximately $8.6 million. The note matures on September 1, 2012 and bears an interest rate of 12.5% per annum due at the note's maturity. Reddy Holdings may demand repayment of all or any portion of the note, together with accrued interest, at any time prior to maturity. As of March 31, 2012, the principal outstanding under the Intercompany Promissory Note was $8.4 million. Associated accrued interest of $0.1 million was included in Accrued Expenses on Reddy Corp's balance sheet as of March 31, 2012.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes and other information included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011, previously filed with the Securities and Exchange Commission ("SEC"). Except as otherwise noted, there are no material differences between the consolidated balances presented herein and the balances of Reddy Ice Corporation.

Reddy Ice Holdings, Inc. ("Reddy Holdings"), and its wholly-owned subsidiary, Reddy Ice Corporation ("Reddy Corp."), manufacture and distribute packaged ice products. We are the largest manufacturer of packaged ice products in the United States and serve a variety of customers in 34 states and the District of Columbia under the Reddy Ice® brand name.

Uncertainty of Forward Looking Statements and Information

Other than statements of historical facts, statements made in this Form 10-Q, statements made by us in periodic press releases, oral statements made by our management to analysts and stockholders and statements made in the course of presentations about our company constitute "forward- looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We believe the expectations reflected in such forward-looking statements are accurate. However, we cannot assure you that such expectations will occur. These forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results expressed or implied by the forward- looking statements. Factors you should consider that could cause these differences are:

•: general economic trends and seasonality;
•: weather conditions;
•: the ability of our subsidiary to make distributions to us in amounts sufficient to service our debt and pay our taxes;
•: our substantial leverage and ability to service our debt;
•: our ability to complete the contemplated restructuring transactions and emerge from bankruptcy;
•: the restrictive covenants and financial covenants under our indebtedness;
•: the availability of capital sources;
•: fluctuations in our operating costs, including the prices of electricity, fuel, polyethylene and other required expenses;
•: competitive practices in the industry in which we compete;
•: changes in labor conditions;
•: our capital expenditure requirements;
•: the risks associated with acquisitions and the failure to integrate acquired businesses;
•: technological changes and innovations;
•: the costs and effects of legal and administrative proceedings, settlements, investigations and claims;
•: legislative or regulatory requirements; and

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•: all the other factors described herein under Item 1A of Part II and in Item 1A of Part I of our Annual Report on Form 10-K.

You should not unduly rely on these forward-looking statements as they speak only as of the date of this report. Except as required by law, we are not obligated to publicly release any revisions to these forward looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events. Important factors that could cause our actual results to differ materially from our expectations are discussed elsewhere in this report.

General

Due to deterioration in our business related principally to price declines driven by industry competition across our markets, and coupled with broader economic instability and rising commodity prices, we experienced significant net losses in 2011 and 2010. Our financial results are also burdened by high interest costs resulting from our highly leveraged capital structure. These factors and uncertainty in our ability to generate sufficient liquidity to meet our future obligations in a timely manner have caused management to conclude that there is substantial doubt regarding our ability to continue as a going concern.

In response to these factors we began to explore alternatives to address our capital structure. In recent months these efforts accelerated, with an informal committee of the largest holders of our existing first and second lien notes negotiating the terms of a restructuring of our debt obligations (the "Restructuring"). To effect the Restructuring and related transactions as described throughout this document we commenced the solicitation of acceptances with respect to a plan of reorganization (the "Plan") on April 11, 2012. On April 12, 2012, Reddy Ice Holdings, Inc. and Reddy Ice Corporation filed voluntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code (the "Bankruptcy Cases") in the United States Bankruptcy Court for the Northern District of Texas (the "Bankruptcy Court").

The information included herein should be evaluated in that context. See "Restructuring Transactions" and Item 1A, "Risk Factors" for additional information.

Overview. We are the largest manufacturer and distributor of packaged ice in the United States and currently serve a variety of customers in 34 states and the District of Columbia. Our business consists of:

•: the traditional manufacture and delivery of ice from a central point of production to the point of sale; and
•: the installation and operation of The Ice Factory®, our proprietary in-store bagging ("ISB") equipment that produces, packages and stores ice through an automated, self-contained system.

Seasonality. The packaged ice business is highly seasonal, characterized by peak demand during the warmer months of May through September, with an extended peak selling season in the southern United States. Approximately 71%, 6971% and 69% of our annual revenues occurred during the second and third calendar quarters in each of ~~2010~~2011, ~~2009~~2010 and ~~2008~~2009. As a result of seasonal revenue declines and a less than proportional decline in expenses during the first and fourth quarters, we typically experience lower margins resulting in losses during these periods.

Revenues. Our revenues primarily represent sales of packaged ice and packaged ice bags for use in our ISB equipment. There is no right of return with respect to these products. A portion of our revenues also represents fees earned under management agreements for ISB systems located outside our primary territories that are recognized as earned under contract terms.

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Cost of Sales (Excluding Depreciation). Our cost of sales (excluding depreciation) consists of costs related to the manufacturing and distribution of our products, including, in particular:

•: manufacturing and distribution labor costs;
•: raw materials (primarily polyethylene-based plastic bags);
•: product delivery expenses, including fuel and vehicle rental expense related to products delivered by our own distribution network, as well as fees paid to distributors who deliver ice to our customers on our behalf;
•: utility expenses (primarily electricity used in connection with the manufacturing, storage and distribution processes); and
•: ISB system costs associated with customer service representatives and machine technicians (ISB systems generally do not increase our plant occupancy, delivery or utility costs).

Depreciation Expense Related to Cost of Sales and Depreciation and Amortization. Depreciation and amortization are divided into two line items: depreciation expense related to cost of sales and depreciation and amortization expense. Depreciation expense related to cost of sales consists of depreciation expense for our production and distribution equipment. Depreciation and amortization expense consists of depreciation and amortization expense for our selling, general and administrative functions.

33 Operating Expenses. Our operating expenses are costs associated with selling, general and administrative functions. These costs include executive officers' compensation, office and administrative salaries, insurance, legal and other professional services and costs associated with leasing office space. Labor costs, including associated payroll taxes and benefit costs, but excluding non-cash stock-based compensation expense, included in operating expenses represented approximately 17% of revenues in the three months ended March 31, 2012 and 2011.

Cost of antitrust investigations and related litigation. Costs related to the current antitrust investigations and related litigation, net of insurance recoveries, are composed primarily of legal fees, document collection costs and the fees of other experts and consultants, as well as fees related to the tentative settlement agreement reached in connection with litigation associated with the antitrust matters.. These costs have been recognized and paid by Reddy Holdings.

Facilities. At March 31, 2012, we owned or operated 58 ice manufacturing facilities, 77 distribution centers and approximately 3,500 Ice Factories. As of the same date, we had an aggregate daily ice manufacturing capacity of approximately 17,000 tons.

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~~Operating~~ ~~Expenses. Our~~Three ~~operating~~Months ~~expenses~~Ended ~~are costs associated with selling~~March 31, ~~general~~2012 ~~and~~Compared ~~administrative~~to ~~functions.~~Three ~~These~~Months ~~costs include~~Ended executive officers' compensation, office and administrative salaries, insurance, legal and other professional services and costs associated with leasing office space. Labor costs, including associated payroll taxes and benefit costs, but excluding non-cash stock-based compensation expense, included in operating expenses represented approximately 8% and 9% of revenues in the nine months ended SeptemberMarch 3031, 2011 ~~and 2010, respectively.~~

Cost of antitrust investigations and related litigation. Costs related to the current antitrust investigations and related litigation, net of insurance recoveries, are composed primarily of legal fees, document collection costs and the fees of other experts and consultants. These costs have been recognized and paid by Reddy Holdings.

	Three Months Ended March 31,						Change from Last Year

	2012			2011			Dollars			%
	(in thousands)
Revenues	$	44,281		$	40,752		$	3,529			8.7
Cost of sales (excluding depreciation)		39,414			37,225			2,189			5.9
Depreciation expense related to cost of sales		6,961			7,708			(747	)		(9.7	)

Gross loss		(2,094	)		(4,181	)		2,087			(49.9	)
Operating expenses		14,020			12,799			1,221			9.5
Depreciation and amortization expense		2,441			2,530			(89	)		(3.5	)
Loss (gain) on dispositions of assets		2			(54	)		56			(103.7	)
Acquisition expenses		221			603			(382	)		(63.3	)
Impairment of long-lived assets		31			231			(200	)		(86.6	)
Gain on contingent acquisition consideration		(100	)		—			(100	)		—
Cost related to antitrust investigations and related litigation		1,762			1,421			341			24.0
Restructuring costs		559			—			559			—

Loss from operations		(21,030	)		(21,711	)		681			(3.1	)
Interest expense, net		(14,976	)		(14,345	)		(631	)		4.4
Reorganization costs		(3,837	)		—			(3,837	)		—
Debt refinance costs		(2,531	)		—			(2,531	)		—

Loss before income taxes		(42,374	)		(36,056	)		(6,318	)		17.5
Income tax expense		(1,968	)		(3,045	)		1,077			(35.4	)

Net loss	$	(44,342	)	$	(39,101	)	$	(5,241	)		13.4

~~Facilities.~~ Revenues: AtRevenues ~~September~~for the three months ended March 3031, ~~2011~~2012 increased $3.5 million from the three months ended March 31, we2011. This ~~owned~~increase oris ~~operated~~primarily 58due to a percentage increase in packaged ice ~~manufacturing~~volume ~~facilities,~~sales 77in ~~distribution~~the ~~centers~~mid-single ~~and~~digits related to improved weather patterns in most of ~~approximately~~our 3markets,~~500~~ ~~Ice Factories.~~stabilized Aseconomic ofconditions, and the ~~same~~addition ~~date,~~of wenew ~~had~~customers anthrough ~~aggregate~~both ~~daily~~acquisitions ~~ice~~and ~~manufacturing~~organic ~~capacity~~growth, partially offset by the effects of ~~approximately~~lost ~~17,000~~customers ~~tons~~as a result of competitive activity.

Cost ~~Three~~of ~~Months~~sales ~~Ended~~(excluding ~~September~~depreciation): Cost of sales (excluding depreciation) for the three months ended March 3031, ~~2011~~2012 increased $2.2 million ~~Compared~~from tothe ~~Three~~three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, ~~2010~~ 2011. This increase in cost of sales is primarily due to increased volume sales.

	Three Months Ended September 30,						Change from Last Year
	2011			2010			Dollars			%
	(in thousands)
Revenues	$	126,330		$	120,147		$	6,183			5.1
Cost of sales (excluding depreciation)		77,800			71,770			6,030			8.4
Depreciation expense related to cost of sales		7,819			5,694			2,125			37.3
Gross profit		40,711			42,683			(1,972	)		(4.6	)
Operating expenses		14,725			14,358			367			2.6
Depreciation and amortization expense		2,249			2,435			(186	)		(7.6	)
Loss on dispositions of assets		629			1,035			(406	)		(39.2	)
Impairment of long-lived assets		1,971			514			1,457			283.5
Acquisition expenses		1,664			414			1,250			301.9
Gain on contingent acquisition consideration		(202	)		—			(202	)		(100.0	)
Cost (insurance recoveries) related to antitrust investigations and related litigation		785			(3,867	)		4,652			(120.3	)
Income from operations		18,890			27,794			(8,904	)		(32.0	)
Interest expense, net		(14,694	)		(14,096	)		(598	)		(4.2	)
Gain on bargain purchase		—			264			(264	)		(100.0	)
Debt refinance costs		—			(310	)		310			100.0
Income before income taxes		4,196			13,652			(9,456	)		(69.3	)
Income tax benefit (expense)		696			(4,662	)		5,358			(114.9	)
Net income	$	4,892		$	8,990		$	(4,098	)		(45.6	)

Revenues: Revenues for the three months ended September 30, 2011 increased $6.2 million from the three months ended September 30, 2010. The low single digits percentage increase in packaged ice volume sales is primarily due to acquisitions, as well as improved weather patterns in most of our Western and Mid-Western markets and the addition of new customers through organic growth, partially offset by adverse weather in our Eastern markets, and weakening economic conditions impacting same store sales.

Cost of sales (excluding depreciation): Cost of sales (excluding depreciation) for the three months ended September 30, 2011 increased $6.0 million from the three months ended September 30, 2010.

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This increase in cost of sales is primarily due to increased volume sales, as well as unit cost increases of fuel and plastic bags.

Significant expenses included in cost of sales include the following:

	Percentage of Revenues
	2011			2010
	2012			2011
Labor costs, including associated payroll taxes and benefit costs (including health insurance)		1934	%		2134	%
Plastic bags		6	%		56	%
Operating leases (including vehicles, plant equipment and ISB equipment)		511	%		411	%
Fuel		6	%		46	%
Independent third party distribution services		56	%		6	%
Maintenance		47	%		37	%
Vehicle maintenance and insurance claims		23	%		13	%
Electricity		56	%		6	%

Depreciation expense related to cost of sales: Depreciation expense related to cost of sales increased $2.1 million as a result of a change in accounting estimate to eliminate salvage value on certain equipment in the fourth quarter of 2010, as well as new production and distribution equipment placed in service in 2010 and the first nine months of 2011, partially offset by dispositions and assets becoming fully depreciated. 38

Operating expenses: Operating expenses increased $0.4 million from the three months ended September 30, 2010 to the three months ended September 30, 2011. This increase is primarily due to a $0.6 million increase in employee labor costs related to acquired operations, $0.2 million increase in non-cash stock compensation, and $0.1 million increase in bad debt expense, partially offset by a $0.3 million decrease in miscellaneous operating expenses and a $0.3 million decrease in employee benefits costs.

Depreciation and amortization expense: Depreciation and amortization expense decreased $0.2 million as a result of dispositions and assets becoming fully depreciated, partially offset by new equipment placed in service and the recognition of certain intangible assets in connection with acquisitions in 2010 and the first nine months of 2011.

Loss on dispositions of assets: A $0.6 million loss on disposition of assets was recognized on the disposition of certain excess assets during the three months ended September 30, 2011. A $1.0 million loss on disposition of assets was recognized in the three months ended September 30, 2010. We are continuing to evaluate our facilities and other equipment assets and expect to make certain disposals in the future. Additional gains or losses on dispositions may occur in future periods.

Impairment of long-lived assets: Impairment charges of $2.0 million and $0.5 million were recognized in the three months ended September 30, 2011 and 2010, respectively. Approximately $1.9 million of the 2011 impairment charge relates to the correction of errors identified through our 2011 fixed asset inventory counts. Deterioration of current market conditions for our assets or changes in facility operations could trigger additional impairments in future periods.

Acquisition expenses: We incurred $1.7 million of acquisition expenses during the three months ended September 30, 2011. Substantially all of these expenses were in connection with the Company's evaluation of a strategic merger opportunity within the packaged ice industry. While this evaluation is ongoing, no agreement has been reached and there can be no assurance that an agreement will be reached. Acquisition expense for the three months ended September 30, 2010 was $0.4 million.

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~~Cost~~ Depreciation ~~(insurance~~expense ~~recoveries)~~ related to ~~antitrust~~cost ~~investigations~~of ~~and related litigation~~sales: ~~During~~Depreciation ~~the~~expense ~~three~~related ~~months~~to ~~ended September 30,~~cost ~~2011~~of ~~and 2010,~~sales wedecreased ~~incurred~~ $0.87 million ~~and~~as ~~$1.1 million,~~a result ~~respectively,~~ of dispositions ~~legal fees~~ and ~~other~~assets ~~expenses~~becoming ~~associated~~fully ~~with~~depreciated, ~~the~~partially ~~antitrust~~offset ~~investigation conducted~~ by ~~the~~new ~~Antitrust~~production ~~Division of the United States Department of Justice~~ and ~~the~~distribution ~~related~~equipment ~~litigation.~~placed ~~We received a $5.0 million settlement~~ in ~~respect~~service ~~of claimed cost reimbursements from one of our insurance carriers during the three months ended September 30, 2010. We became aware of and began incurring expenses related to the investigation~~ in ~~March of 2008~~2012. ~~These costs have been recognized and paid by Reddy Holdings.~~

~~Interest~~ Operating ~~expense, net~~expenses: ~~Net~~Operating ~~interest~~expenses ~~expense~~ increased $01.62 million from the three months ended ~~September~~March 3031, ~~2010~~2011 to the three ~~months~~ ~~ended~~months ~~September~~ended March 3031, ~~2011~~2012. This ~~change~~increase is ~~related~~primarily due to ~~additional~~a ~~interest~~$1.0 ~~associated~~million ~~with~~increase ~~borrowings~~in ~~under~~labor ~~our~~and ~~revolving~~benefits ~~credit~~costs ~~facility~~and $0.5 million ~~The~~increase ~~amount~~in ofprofessional ~~net~~services ~~interest~~costs, ~~expense~~partially ~~recognized~~offset by ~~Reddy~~a ~~Holdings was~~ $0.32 million ~~during~~decrease ~~the~~in ~~three~~non-cash ~~months~~stock-based ~~ended~~compensation ~~September~~costs and $0.2 ~~30,~~million ~~2011~~decrease ~~and~~in ~~2010~~bad debt expense.

~~Debt~~ Depreciation ~~refinance~~and ~~costs~~amortization expense: ~~Costs~~Depreciation ofand amortization expense decreased $0.3 1 million ~~were~~as ~~incurred~~a inresult ~~the~~of ~~three~~dispositions and ~~months~~assets ~~ended~~becoming fully ~~September 30~~depreciated, ~~2010~~partially inoffset ~~connection with~~by ~~refinancing activities~~new ~~related~~equipment toplaced ~~our~~in ~~debt.~~service Noand ~~such~~the ~~costs~~recognition ~~were~~of ~~incurred~~certain ~~during~~intangible ~~the~~assets ~~three~~in ~~months~~connection ~~ended~~with ~~September 30,~~acquisitions in 2011.

~~Income~~Loss ~~tax~~ (~~expense~~gain) ~~benefit~~on dispositions of assets: ~~The~~A ~~effective~~$0.1 million ~~tax~~gain ~~rate~~on ~~decreased~~disposition ~~from~~of ~~34.2%~~assets ~~during~~was recognized in the three months ended ~~September~~March 3031, ~~2010~~ 2011 due to ~~(16~~the disposition of certain excess assets.~~6%)~~ ~~during~~ We recognized an insignificant loss on disposition of assets in the three months ended ~~September~~March 3031, ~~2011~~2012. ~~primarily~~As as a result of ~~the~~a ~~effects~~focus ofon operational aefficiency, ~~valuation~~we ~~allowance~~are ~~recorded~~continuing ~~against~~to ~~certain~~evaluate ~~federal~~our operating facilities and ~~state~~expect ~~deferred~~to ~~tax~~dispose ~~assets~~of certain real estate in the future. Based on future real estate market conditions, additional impairments or losses on dispositions may occur in future periods.

Acquisition ~~Nine~~expenses: During ~~Months~~the ~~Ended~~three ~~September~~months ended March 3031, ~~2011~~2012, ~~Compared~~we toincurred ~~Nine~~$0.2 million ~~Months~~of ~~Ended~~acquisition ~~September~~expenses in connection with our evaluation of a strategic merger opportunity within the packaged ice industry. During the three months ended March 3031, ~~2010~~ 2011, we recognized $0.6 million in connection with our ongoing acquisition program.

	Nine Months Ended September 30,						Change from Last Year
	2011			2010			Dollars			%
	(in thousands)
Revenues	$	273,575		$	260,204		$	13,371			5.1
Cost of sales (excluding depreciation)		181,793			168,787			13,006			7.7
Depreciation expense related to cost of sales		23,007			16,655			6,352			38.1
Gross profit		68,775			74,762			(5,987	)		(8.0	)
Operating expenses		41,839			41,850			(11	)		(0.0	)
Depreciation and amortization expense		7,233			6,484			749			11.6
Loss on dispositions of assets		461			2,432			(1,971	)		(81.0	)
Impairment of long-lived assets		2,741			750			1,991			265.5
Acquisition expenses		4,111			624			3,487			558.8
Gain on contingent acquisition consideration		(202	)		—			(202	)		(100.0	)
Cost (insurance recoveries) of antitrust investigations and related litigation		2,937			(1,824	)		4,761			261.0
Income from operations		9,655			24,446			(14,791	)		(60.5	)
Interest expense, net		(43,861	)		(35,663	)		(8,198	)		23.0
Gain on bargain purchase		—			264			(264	)		(100.0	)
Debt refinance costs		—			(6,478	)		6,478			100.0
Loss before income taxes		(34,206	)		(17,431	)		(16,775	)		(96.2	)
Income tax (expense) benefit		(1,949	)		5,956			(7,905	)		(132.7	)
Net loss	$	(36,155	)	$	(11,475	)	$	(24,680	)		(215.1	)

Impairment of long-lived assets: Impairment charges of $0.03 million and $0.2 million were recognized in the three months ended March 31, 2012 and 2011, respectively, as a result of impairing certain real estate assets during these periods.

36 Costs related to antitrust investigations and related litigation: During the three months ended March 31, 2012 and 2011, we incurred $1.8 million and $1.4 million, respectively, of legal fees and other expenses associated with the antitrust investigation conducted by the Antitrust Division of the United States Department of Justice and the related litigation. We became aware of and began incurring expenses related to the investigation in March of 2008. Approximately $1.0 million of the $1.8 million expense incurred for the three months ended March 31, 2012 related to the tentative settlement agreement reached in connection with litigation associated with the antitrust matters.

Restructuring costs: During the three month ended March 31, 2012, we incurred $0.6 million in restructuring costs in connection with the Restructuring Transactions. Such costs were incurred before the Company decided to complete the reorganization under Chapter 11 of the US Bankruptcy Code as discussed in the "Debt and Other Obligations" section below.

Interest expense, net: Net interest expense increased $0.6 million from the three months ended March 31, 2011 to the three months ended March 31, 2012. This change is related to additional interest associated with borrowings under our revolving credit facility. The amount of net interest expense recognized by Reddy Holdings was $0.3 million during the three months ended March 31, 2012 and 2011. During the three months ended March 31, 2012, Reddy Corp incurred $0.1 million of interest expense in connection with the intercompany promissory note issued by Reddy Holdings, which was eliminated as a result of consolidation.

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~~Revenues~~Reorganization costs: ~~Revenues~~During ~~for~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, ~~increased~~we incurred $133.48 million ~~over~~of ~~the~~reorganization ~~nine months ended~~costs ~~September 30, 2010. The low single digits percentage increase~~ in ~~packaged~~connection ~~ice~~with the ~~volume~~voluntary ~~sales~~bankruptcy iscases ~~primarily~~filed ~~due~~under toChapter 11 ~~acquisitions, as well as improved weather patterns in most~~ of ~~our markets and~~ the ~~addition~~U.S. ofBankruptcy ~~new customers~~Code ~~through~~on ~~organic growth~~April 12, ~~partially offset by the effects of lost customers and reduced pricing as a result of increased competitive activity and weakening economic conditions impacting same store sales~~2012.

~~Cost~~ Debt ofrefinance ~~sales (excluding depreciation)~~costs: ~~Cost~~During ofthe ~~sales~~three ~~(excluding~~months ~~depreciation)~~ended ~~increased~~March 31, 2012, the Company recorded approximately $132.05 million ~~from~~of expense ~~the~~for costs ~~nine~~incurred ~~months ended September 30,~~in ~~2010~~connection towith ~~the~~refinancing ~~nine~~activities ~~months~~related ~~ended~~to ~~September 30,~~debt ~~2011.~~agreements ~~This~~intended ~~increase~~to inpreserve ~~cost~~the ofCompany's ~~sales~~liquidity isposition ~~primarily~~that ~~due~~will tono ~~increased~~longer ~~volume~~be ~~sales,~~consummated. asNo ~~well~~such ascosts ~~unit~~were incurred ~~cost~~during ~~increases~~the ofthree ~~fuel~~months ~~and plastic~~ended ~~bags~~March 31, 2011.

~~Significant~~ Income tax expense: The effective tax rate changed from negative 8.4% during the three months ended March 31, 2011 to ~~expenses~~negative ~~included~~4.7% induring ~~cost~~the three ofmonths ~~sales~~ended ~~include~~March 31, 2012 primarily as a result of the ~~following:~~effects of a valuation allowance recorded against certain federal and state deferred tax assets.

	Percentage of Revenues
	2011			2010
Labor costs, including associated payroll taxes and benefit costs (including health insurance)		22	%		23	%
Plastic bags		6	%		5	%
Operating leases (including vehicles, plant equipment and ISB equipment)		6	%		5	%
Fuel		6	%		4	%
Independent third party distribution services		6	%		6	%
Maintenance		4	%		4	%
Vehicle maintenance and insurance claims		2	%		2	%
Electricity		5	%		5	%

Depreciation expense related to cost of sales: Depreciation expense related to cost of sales increased $6.4 million as a result of a change in accounting estimate to eliminate salvage value on certain equipment in the fourth quarter of 2010, as well as new production and distribution equipment placed in service in 2010 and the first nine months of 2011, partially offset by dispositions and assets becoming fully depreciated.

Operating expenses: Operating expenses of $41.8 million incurred in the nine month ended September 30, 2011 were in line with those incurred in the same period of the prior year. A $0.9 million decrease in employee benefits costs, as well as $0.5 million decrease in professional services and $0.2 million decrease in customer relations expense was offset by a $0.7 million increase in labor expense related to acquired operations, a $0.4 million increase in non-cash stock-based compensation expense, as well as $0.2 million increase in building rents and a $0.2 million increase bad debt expense.

Depreciation expense and amortization expense: Depreciation and amortization expense increased $0.7 million as a result of new equipment placed in service and the recognition of certain intangible assets in connection with acquisitions in 2010 and the first nine months of 2011, partially offset by dispositions and assets becoming fully depreciated.

Loss on dispositions of assets: A $0.5 million and $2.4 million loss on disposition of assets was recognized on the disposition of certain excess assets during the nine months ended September 30, 2011 and 2010, respectively. As a result of a sustained focus on operational efficiency, we are continuing to evaluate our facilities and other equipment assets and expect to dispose of certain assets in the future. Additional gains or losses on dispositions may occur in future periods.

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Impairment of long-lived assets: We recognized an impairment charge of $2.7 million during the nine month period ended September 30, 2011 as a result of impairing certain fixed assets and real estate identified for disposition. Approximately $1.9 million of the 2011 impairment charge relates to the correction of errors identified through our 2011 fixed asset inventory counts. Impairment charges of $0.8 million were recognized during the nine month period ended September 30, 2010 to adjust the carrying value of a facility which was held for sale to its estimated market value. As a result of a sustained focus on operational efficiency, we are continuing to evaluate our operating facilities and expect to dispose of additional real estate in the future. Deterioration of current market conditions for our assets or changes in facility operations could trigger additional impairments in future periods.

Acquisition expenses: We incurred $4.1 million of expense during the nine months ended September 30, 2011 in connection with our current acquisition activities and on-going negotiations. Approximately $3.7 million of these expenses were in connection with the Company's evaluation of a strategic merger opportunity within the packaged ice industry. While this evaluation is ongoing, no agreement has been reached and there can be no assurance that an agreement will be reached. Acquisition expense for the nine months ended September 30, 2010 was $0.6 million.

Cost (insurance recoveries) of antitrust investigations and related litigation: During the nine months ended September 30, 2011 and 2010, we incurred $2.9 million and $3.2 million, respectively, of legal fees and other expenses associated with the antitrust investigation being conducted by the Antitrust Division of the United States Department of Justice and the related litigation. During the nine months ended September 30, 2010, we received a $5.0 million settlement in respect of claimed cost reimbursements from our insurance carriers. These costs have been recognized and paid by Reddy Holdings.

Interest expense, net: Net interest expense increased $8.2 million from the nine months ended September 30, 2010 to the nine months ended September 30, 2011. This change is related to increased interest costs associated with our new 11.25% Senior Secured Notes and 13.25% Senior Secured notes, as well as additional interest associated with borrowings under our revolving credit facility. The amount of net interest expense recognized by Reddy Holdings was $1.0 million and $4.1 million during the nine months ended September 30, 2011 and 2010, respectively.

Debt refinance costs: Costs of $6.5 million were incurred in the nine months ended September 30, 2010 in connection with the refinancing of substantially all of our outstanding debt in March 2010 and consist of certain fees and expenses paid to third parties in connection with the transactions, as well as the write-off of $0.3 million of deferred debt issue costs associated with debt that was repaid in the transactions.

Income tax (expense) benefit: The effective tax rate increased from 34.2% during the nine months ended September 30, 2010 to (5.7%) during the nine months ended September 30, 2011 as a result of the effects of the valuation allowance recorded against certain federal and state deferred tax assets.

Liquidity and Capital Resources

We intend to fund our ongoing capital and working capital requirements as well as debt service, including our internal growth and acquisitions, through a combination of cash flows from operations, and borrowings under our existing credit facilities, operating leases and other potential financing arrangements.

We generate cash from the sale of packaged ice through traditional delivery methods, by which we manufacture, package and store ice at a central facility and transport it to our customers' retail locations when needed, and through Ice Factories, which manufacture, package and store ice in our customers' retail locations. Our primary uses of cash are (a) cost of sales, (b) operating expenses, (c) debt service, (d) capital expenditures related to replacing and modernizing the capital equipment in our traditional ice plants and acquiring and installing additional Ice Factories, (e) acquisitions, and (f) investments. We have been and may continue to be required to use substantial amounts of cash to pay expenses relating to the investigations by various state agencies and related civil litigation. See Item 3. Legal Proceedings. Historically, we have financed our debt service, capital and working capital requirements, including our acquisitions, through a combination of cash flows from operations, borrowings under our revolving credit facilities and operating leases.

38 Due to deterioration in our business related principally to price declines driven by industry competition across our markets, and coupled with broader economic instability and rising commodity prices, we experienced significant net losses in 2011 and 2010. Our financial results have also been burdened by high interest costs resulting from our highly leveraged capital structure. These factors and uncertainty in our ability to generate sufficient liquidity to meet our future obligations in a timely manner have caused management to conclude that there is substantial doubt regarding our ability to continue as a going concern.

As a result of these factors, we began to explore alternatives to address our capital structure. In recent months these efforts accelerated, with an informal committee of the largest holders of our existing first and second lien notes negotiating the terms of a restructuring of our debt obligations. See "Restructuring Transactions" for further information.

During the three months ended March 31, 2012, capital expenditures totaled $1.5 million. As we consolidate acquisitions into the existing Company infrastructure, we have identified non-core and excess assets which can be disposed of, such as real estate and machinery and equipment. From time to time, we also dispose of other assets which are no longer useful in our operations. As a result of dispositions of these non-core and excess assets, we realized proceeds of approximately $0.2 million during the three months ended March 31, 2012.

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~~our traditional~~ ~~ice~~Cash ~~plants~~Flows ~~and~~for ~~acquiring and installing additional Ice Factories, (e) acquisitions, and (f) investments. We have been and may continue to be required to use substantial amounts of cash to pay expenses relating to~~ the ~~investigations~~Three byMonths ~~various~~Ended ~~state agencies and related civil litigation. See Part~~March ~~II—Item 1. Historically~~31, we2012 ~~have financed our capital~~ and ~~working capital requirements, including our acquisitions, through a combination of cash flows from operations, borrowings under our revolving credit facilities and operating leases.~~ 2011

~~During the~~Net ~~nine~~cash ~~months~~used ~~ended~~in ~~September 30,~~operating ~~2011,~~activities ~~capital~~was ~~expenditures totaled~~ $1332.2 million. ~~During~~for ~~this~~the ~~period,~~three ~~reimbursements~~months ofended ~~the~~March 31, ~~cost~~2012 ofcompared ~~equipment~~to ~~acquired~~net ~~in 2010~~cash ~~and~~used ~~2011~~in ~~and subsequently placed under~~ operating ~~leases,~~activities ~~net~~ of ~~the cost of equipment acquired in 2011, equaled~~ $130.31 million. Asfor wethe ~~consolidate~~three ~~acquisitions~~months ~~into~~ended ~~the existing Company infrastructure~~March 31, we2011. ~~have~~The ~~identified~~increase ~~non-core~~in ~~and~~cash ~~excess~~used ~~assets~~in ~~which~~operating ~~can~~activities ~~be disposed~~ of, ~~such as real estate and machinery and equipment~~$2.1 million ~~From~~was ~~time~~a toresult ~~time, we also dispose~~ of ~~other~~a ~~assets~~$5.2 ~~which~~million ~~are~~increase ~~no longer useful~~ in ~~our~~net ~~operations.~~loss, Asadjusted afor ~~result of dispositions of these~~ non-~~core~~cash and ~~excess~~non-operating ~~assets~~items, wepartially ~~realized~~offset ~~proceeds~~by ofa ~~approximately~~ $03.7 1 million ~~during~~increase ~~the~~in ~~nine months~~cash ~~ended~~provided ~~September 30,~~by ~~2011.~~working ~~Our net~~ capital ~~expenditures~~primarily ~~during~~due ~~the~~to ~~nine~~a decrease ~~months~~in ~~ended~~accounts ~~September 30, 2011 were $11~~receivable.~~2 million.~~

~~During~~Net cash provided by investing activities was $0.8 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, wewhile ~~completed~~net ~~the~~cash ~~acquisition~~used ofin ~~nine~~investing ~~ice~~activities ~~companies~~was $12.9 million for athe ~~total~~three months ended March 31, 2011. The increase in cash ~~purchase~~provided ~~price~~by ofinvesting ~~approximately~~activities is primarily due to an $138.34 million. Wedecrease ~~will continue~~in tothe ~~evaluate~~cost ~~acquisition~~of ~~opportunities~~acquisitions, asa $2.4 million ~~they~~decrease ~~become~~in ~~available.~~net Inproperty ~~conjunction~~and ~~with~~equipment ~~these~~additions ~~evaluations,~~and wea ~~will~~$2.2 million ~~consider~~decrease ~~our~~in ~~liquidity,~~the ~~availability~~restricted ~~under~~cash ~~our~~balance ~~credit~~that ~~facility,~~was ~~mandatory principal~~used ~~repayments~~to ~~under~~collateralize our ~~debt~~outstanding ~~agreements~~standby ~~and~~letters ~~availability~~ of ~~other capital resources~~ credit.

Net cash ~~Cash~~provided ~~Flows~~by financing activities was $26.8 million and $12.0 million for the ~~Nine~~three ~~Months~~months ~~Ended~~ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~ 2011, respectively. The increase of $14.8 million is mostly due to a $17.3 million increase in net borrowings under our revolving credit facility, partially offset by $2.5 million of debt issue costs.

~~Net~~ ~~cash~~Debt used in operating activities was $17.3 million for nine months ended September 30, 2011 versus net cash provided by operating activities of $18.5 million for the nine months ended September 30, 2010. The increase in cash used in operating activities of $35.8 million was a result of a $15.3 million increase in net loss, adjusted for non-cash and ~~non-operating~~Other items, and a $20.5 million decrease in cash provided by working capital primarily due to a decrease in cash provided by changes in accounts payable and accrued expenses driven by changes in accrued interest, and an increase in accounts receivable associated with increased sales. Obligations

~~Net cash used in investing activities was $28~~ Overview.~~6 million~~ At ~~and $52.1~~March ~~million for the nine months ended September 30~~31, ~~2011 and 2010~~2012, ~~respectively.~~we ~~The~~had ~~decrease~~total indebt cash used in investing activities is primarily due to a $15.2 million decrease in net property and equipment additions and a $7.3 million decrease in the funding of the restricted cash balance used to collateralize our outstanding ~~standby letters of credit subsequent to the termination of our old credit facilities in the first quarter of 2010,~~ as ~~well as a $2.2 million decrease in purchases of investments.~~ follows:

•: $300.0 million of Reddy Corp's 11.25% senior secured notes due 2015;
•: $139.0 million of Reddy Corp's 13.25% senior secured notes due 2015 (net of unamortized early tender premium of $0.6 million);
•: $11.7 million of Reddy Holdings' 10¹/2% senior discount notes due November 1, 2012;
•: $50.0 million of borrowings under Reddy Corp's revolving credit facility;
•: $8.4 million Intercompany Promissory Note issued by Reddy Corp to Reddy Holdings; and
•: $0.1 million in other notes payable.

~~Net~~As ~~cash~~a ~~provided~~result byof ~~financing~~the ~~activities~~ongoing ~~was~~bankruptcy ~~$14.5 million~~proceedings ~~and~~disclosed ~~$41.7 million~~elsewhere ~~for~~in this document, the ~~nine~~Company ~~months~~has ~~ended~~classified ~~September 30,~~its ~~2011~~borrowings ~~and~~under ~~2010,~~its ~~respectively~~11.25% ~~The~~Senior ~~decrease~~Secured ~~of $27~~Notes, 13.25% Senior Secured Notes, 101/2 ~~million~~% isSenior ~~due~~Discount toNotes ~~the~~and ~~refinancing~~related ofunamortized ~~substantially~~debt ~~all~~issue ofcosts ~~our~~as current. The debt issue costs are included in prepaid expenses and other current assets on the condensed ~~first~~consolidated ~~nine~~balance ~~months~~sheet. The indentures governing these notes define bankruptcy as an event of ~~2010~~default, the occurrence of which ~~resulted~~causes inall ~~the~~outstanding ~~net~~obligations ~~issuance~~to ofbecome ~~$60~~immediately due and payable.0 Under Section ~~million~~362 of ~~additional~~the ~~debt~~Bankruptcy Code, asthe ~~well as~~filing ~~approximately~~of ~~$18.3 million~~voluntary ofbankruptcy ~~costs~~petitions ~~incurred~~by ~~for~~the ~~fees~~Company ~~and~~automatically ~~expenses~~stayed ~~associated~~most ~~with~~actions against the ~~refinancing~~Company, ~~transactions.~~including ~~This~~most actions ~~decrease~~to ~~was~~collect ~~partially~~indebtedness ~~offset~~incurred byprior ~~net~~to ~~draws~~the filing of ~~$14~~the Bankruptcy Cases.~~5 million~~ Accordingly, although the filing of the Bankruptcy Cases triggered defaults for substantially all of the Company's ~~under~~debt ~~our~~obligations ~~revolving~~(including ~~credit~~the ~~facility~~New inCredit Facility, the ~~nine~~First ~~months~~Lien ~~ended~~Notes ~~September 30~~and the Second Lien Notes), ~~2011~~creditors are stayed from taking any actions as a result of such defaults. WeAbsent ~~did~~an ~~not~~order ~~utilize~~of ~~our~~the Bankruptcy ~~revolving~~Court, ~~credit~~substantially ~~facility~~all ~~during~~of the ~~nine~~Company's ~~months~~pre-petition ~~ended~~liabilities ~~September 30,~~are ~~2010~~subject to settlement under the Plan.

11.25% ~~Long~~Senior Secured Notes. On March 15, 2010, Reddy Corp issued $300.0 million in aggregate principal amount of 11.25% Senior Secured Notes due 2015 (the "First Lien Notes") in a private placement offering. The First Lien Notes were subsequently registered with the SEC effective August 2, 2010. Cash interest accrues on the First Lien Notes at a rate of 11.25% per annum and is payable semi-~~term~~annually ~~Debt~~in arrears on March 15 and ~~Other~~September 15. ~~Obligations~~ The First Lien Notes mature on March 15, 2015. The proceeds of the offering were used to repay certain of Reddy Corp's preexisting debt (see

~~Overview. At September 30, 2011, we had $465.3 million of total debt outstanding as follows:~~ 41

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~~11.25% Senior Secured Notes. On March 15, 2010, Reddy Corp issued $300.0 million in aggregate principal amount of 11.25% Senior Secured Notes due 2015 (the~~ "First Lien Notes") in a private placement offering. The First Lien Notes were subsequently registered within the SEC effective August 2, 2010. Cash interest accrues on the First Lien Notes at a rate of 11.25% per annum and is payable semi-annually in arrears on March 15 and September 15. The First Lien Notes mature on March 15, 2015. The proceeds of the offering were used to repay certain of Reddy Corp's preexisting debt (see "Old Senior Credit Facilities" below), pay fees and expenses related to the transactions and provide the Company with cash for future use.

The First Lien Notes are senior secured obligations of Reddy Corp and are:

•: guaranteed by Reddy Holdings;
•: secured on a first-priority basis by liens on substantially all of the assets of Reddy Corp and Reddy Holdings;
•: senior in right of payment to all of Reddy Corp's and Reddy Holdings' future subordinated indebtedness; and
•: effectively senior to all of Reddy Corp's and Reddy Holdings' existing and future unsecured senior indebtedness.

•: no default or event of default has occurred and is continuing or would occur as a consequence thereof;
•: the first lien leverage ratio set forth in the indenture governing the First Lien Notes is less than or equal to 3.5 to 1.0; and
•: there is sufficient capacity under the buildup amount under the indenture governing the First Lien Notes.

40 The first lien leverage ratio under the indenture governing the First Lien Notes means the ratio of first lien indebtedness (as defined in the indenture) to EBITDA (as defined in the indenture) for the most recent four fiscal quarters. Reddy Corp is generally required to calculate its first lien leverage ratio on a pro forma basis to give effect to the incurrence and repayment of indebtedness as well as acquisitions and dispositions. As of March 31, 2012, the first lien leverage ratio was 7.9 to 1.0.

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~~The~~indebtedness ~~first~~for ~~lien~~capital ~~leverage~~stock, ~~ratio~~plus ~~under~~ the ~~indenture~~net ~~governing~~reduction ~~the~~in ~~First~~certain ~~Lien~~restricted ~~Notes~~investments ~~means~~made ~~the~~by ~~ratio~~Reddy ofCorp, ~~first~~less ~~lien~~the ~~indebtedness~~amount ~~(as~~of ~~defined~~certain inrestricted ~~the~~payments ~~indenture)~~made tofrom ~~EBITDA~~time ~~(as~~to ~~defined~~time, inincluding, ~~the~~among ~~indenture)~~other ~~for~~things, the ~~most~~payment ~~recent~~of ~~four~~cash ~~fiscal quarters~~dividends. Reddy Corp is ~~generally~~not ~~required~~currently topermitted ~~calculate its first lien leverage ratio on a pro forma basis~~ to ~~give~~pay ~~effect~~dividends tounder ~~the~~this ~~incurrence and repayment of indebtedness as well as acquisitions and dispositions~~provision. ~~As of September 30, 2011, the first lien leverage ratio was 6.0 to 1.0.~~

In addition, regardless of the leverage ratio or whether Reddy Corp could make any restricted payments under the buildup amount provision referred to above, Reddy Corp is permitted to make certain restricted payments including (1) dividend payments at any time in an aggregate amount of up to $25.0 million if no default has occurred and is continuing under the indenture, (2) the payment of interest when due on the remaining 10¹/2% Senior Discount Notes and the repayment, redemption or retirement of remaining 10¹/2% Senior Discount Notes from the proceeds of certain indebtedness of Reddy Corp incurred after the date of issuance of the First Lien Notes, (3) the payment of dividends to Reddy Holdings in an amount per year not to exceed $1.0 million to pay franchise taxes and overhead expenses of Reddy Holdings and (4) the payment of dividends to Reddy Holdings in an amount per year not to exceed 6.0% of the aggregate net cash proceeds received by Reddy Corp from all public equity offerings after the date of issuance of the First Lien Notes subject to specified conditions. However, the amount of dividend payments permitted under this 6.0% provision will correspondingly reduce the amount otherwise available under the buildup amount for restricted payments, including dividends.

13.25% Senior Secured Notes. On March 15, 2010, Reddy Corp issued $137.6 million in aggregate principal amount of 13.25% Senior Secured Notes due 2015 (the "Second Lien Notes") in the initial settlement of a private placement exchange offer for the outstanding Discount Notes (the "Exchange Offer"). The ~~Second Lien Notes were~~ ~~subsequently~~Bankruptcy ~~registered~~filing ~~within~~constituted ~~the SEC effective August 2, 2010. On March 24, 2010, Reddy Corp issued~~ an ~~additional~~event ~~$1.8 million in aggregate principal amount~~ of ~~Second~~default ~~Lien~~under ~~Notes in~~ the ~~final~~indenture ~~settlement~~governing of the ~~Exchange~~First ~~Offer. Reddy Corp received no cash proceeds from the issuance of the Second~~ Lien Notes. ~~Cash~~For ~~interest~~information ~~accrues~~regarding onchanges ~~the~~expected ~~Second~~to ~~Lien~~be ~~Notes~~made atto ~~a rate of 13.25% per annum and is payable semi-annually in arrears on May 1 and November 1, with~~ the ~~first~~First ~~payment occurring on November 1, 2010. The Second~~ Lien Notes ~~mature on~~in ~~November 1, 2015. In~~ connection with the ~~Exchange Offer~~Restructuring, ~~the Company issued $0.6 million of Second Lien Notes to certain bondholders as an early tender premium (~~see ~~"101/2%~~ ~~Senior Discount Notes~~"Restructuring ~~below~~Transactions—First ~~for further information). These additional Second~~ Lien Notes ~~were not reflected in the Company's condensed consolidated balance sheet upon issuance, but will be recognized as additional debt through interest expense over the term of the Second Lien Notes~~".

The Second Lien Notes are senior secured obligations of Reddy Corp and are:

•: guaranteed by Reddy Holdings;
•: secured on a second-priority basis by liens on substantially all of the assets of Reddy Corp and Reddy Holdings;
•: senior in right of payment to all of Reddy Corp's and Reddy Holdings' future subordinated indebtedness; and
•: effectively senior to all of Reddy Corp's and Reddy Holdings' existing and future unsecured senior indebtedness.

41 The Second Lien Notes include customary covenants that restrict, among other things, Reddy Corp's and its future subsidiaries' ability to incur additional debt or issue certain preferred stock, pay dividends or redeem, repurchase or retire its capital stock or subordinated indebtedness, make certain

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•: no default or event of default has occurred and is continuing or would occur as a consequence thereof;
•: the secured leverage ratio set forth in the indenture governing the Second Lien Notes is less than or equal to 6.0 to 1.0; and
•: there is sufficient capacity under the buildup amount under the indenture governing the Second Lien Notes.

In addition, regardless of the leverage ratio or whether Reddy Corp could make any restricted payments under the buildup amount provision referred to above, Reddy Corp is permitted to make certain restricted payments including (1) dividend payments at any time in an aggregate amount of up to $25.0 million if no default has occurred and is continuing under the indenture, (2) the payment of interest when due on the remaining Discount Notes and the repayment, redemption or retirement of remaining Discount Notes from the proceeds of certain indebtedness of Reddy Corp incurred after the date of issuance of the Second Lien Notes, (3) the payment of dividends to Reddy Holdings in an amount per year not to exceed $1.0 million to pay franchise taxes and overhead expenses of Reddy Holdings and (4) the payment of dividends to Reddy Holdings in an amount per year not to exceed 6.0% of the aggregate net cash proceeds received by Reddy Corp from all public equity offerings after the date of issuance of the Second Lien Notes subject to specified conditions. However, the amount of

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to $25.0 million if no default has occurred and is continuing under the indenture, (2) the payment of interest when due on the remaining Discount Notes and the repayment, redemption or retirement of remaining Discount Notes from the proceeds of certain indebtedness of Reddy Corp incurred after the date of issuance of the Second Lien Notes, (3) the payment of dividends to Reddy Holdings in an amount per year not to exceed $1.0 million to pay franchise taxes and overhead expenses of Reddy Holdings and (4) the payment of dividends to Reddy Holdings in an amount per year not to exceed 6.0% of the aggregate net cash proceeds received by Reddy Corp from all public equity offerings after the date of issuance of the Second Lien Notes subject to specified conditions. However, the amount of dividend payments permitted under this 6.0% provision will correspondingly reduce the amount otherwise available under the buildup amount for restricted payments, including dividends.

101/2% Senior Discount Notes. On October 27, 2004, Reddy Holdings issued $151 million in aggregate principal amount at maturity of 101/2% Senior Discount Notes due 2012 (the "Discount Notes") in a private placement offering. The ~~Discount Notes were subsequently registered with the SEC, effective~~ ~~August 26,~~Bankruptcy ~~2005.~~filing ~~Each~~constituted ~~Discount Note had~~ an ~~initial~~event ~~accreted value~~ of ~~$663.33~~default ~~per~~under ~~$1,000 principal amount at maturity. The accreted value of each Discount Note increased from~~ the ~~date~~indenture ~~of issuance~~governing ~~until November 1, 2008 at a rate of 101/2% per annum such that~~ the ~~accreted~~Second ~~value~~Lien equaled the stated principal amount on November 1, 2008. Thereafter, cash interest began accruing November 1, 2008 and is payable semi-annually in arrears on May 1 and November 1 at a rate of 101/2% per annum. The Discount Notes ~~mature and are payable on November 1, 2012~~. ~~During~~Pursuant to the ~~years~~ongoing ~~ended December~~Chapter ~~31,~~11 ~~2010 and 2009~~proceedings, Reddy Corp ~~paid~~did ~~cash~~not ~~dividends to Reddy Holdings in the amount of $6.7 million~~make ~~and $15.8 million, respectively, to fund~~ the ~~semi-annual~~ interest ~~payments~~payment on the ~~Discount~~Second Lien Notes. Nodue ~~dividends~~on ~~were paid in the three month period ended September~~May 301, ~~2011~~2012. ~~During~~ the nine month period ended September 30, 2011 and 2010, Reddy Corp paid cash dividends to Reddy Holdings in the amount of $0.6 million and $6.0 million, respectively, to fund the semi-annual interest payments on the Discount Notes.

For information regarding changes expected to be made to the Second Lien Notes in connection with the Restructuring, see "Restructuring Transactions—Second Lien Notes".

10¹/2% Senior Discount Notes. On October 27, 2004, Reddy Holdings issued $151 million in aggregate principal amount at maturity of 10¹/2% Senior Discount Notes due 2012 (the "Discount Notes") in a private placement offering. The Discount Notes were subsequently registered with the SEC, effective August 26, 2005. Each Discount Note had an initial accreted value of $663.33 per $1,000 principal amount at maturity. The accreted value of each Discount Note increased from the date of issuance until November 1, 2008 at a rate of 10¹/2% per annum such that the accreted value equaled the stated principal amount on November 1, 2008. Thereafter, cash interest began accruing November 1, 2008 and is payable semi-annually in arrears on May 1 and November 1 at a rate of 10¹/2% per annum. The Discount Notes mature and are payable on November 1, 2012. During the three months ended March 31, 2012 and 2011, Reddy Corp paid no cash dividends to Reddy Holdings.

On February 22, 2010, Reddy Corp launched the Exchange Offer, offering $1,000 in aggregate principal amount of Second Lien Notes for each $1,000 of Discount Notes exchanged. In addition, for Discount Notes exchanged on or prior to March 5, 2010, Reddy Corp offered an early tender premium of $5 in aggregate principal amount of Second Lien Notes for each $1,000 of Discount Notes exchanged. In conjunction with the Exchange Offer, Reddy Corp solicited consents to eliminate substantially all of the restrictive covenants from the indenture governing the Discount Notes. At the expiration of the Exchange Offer on March 19, 2010, approximately 92.2% of the aggregate principal amount of the Discount Notes had been tendered into the Exchange Offer. Following the final settlement of the Exchange Offer, $11.7 million in aggregate principal amount of the Discount Notes remain outstanding.

The Discount Notes are unsecured obligations of Reddy Holdings and are:

•: not guaranteed by Reddy Corp;
•: senior in right of payment to all of Reddy Holdings' future subordinated indebtedness;
•: equal in right of payment with any of Reddy Holdings' existing and future unsecured senior indebtedness;
•: effectively subordinated to Reddy Holdings' existing and future secured debt, including the debt under the First Lien Notes, the Second Lien Notes and the credit facility, which are guaranteed on a secured basis by Reddy Holdings; and
•: structurally subordinated to all obligations and preferred equity of Reddy Corp.

As of November 1, 2010, Reddy Holdings may redeem any or all of the Discount Notes without paying any redemption premium.

43 Pursuant to the ongoing Chapter 11 proceedings, Reddy Holdings did not make the interest payment due on May 1, 2012. The Bankruptcy filing constituted an event of default under the indenture governing the Discount Notes. For information regarding changes expected to be made to the Discount Notes in connection with the Restructuring, see "Restructuring Transactions—Discount Notes".

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The March 2010 Credit Facility was an obligation of Reddy Corp and was guaranteed by Reddy Holdings. The March 2010 Credit Facility was scheduled to mature on January 31, 2014.

On October 22, 2010, Reddy Corp and the lenders party thereto amended and restated the March 2010 Credit Facility (the "New Credit Facility"). The New Credit Facility ~~provides~~provided for a $50 million revolving credit facility. Macquarie Bank Limited ("Macquarie"), a lender under the March 2010 Credit Facility, iswas ~~currently~~ the sole lender under the New Credit Facility. On December 10, 2010, Macquarie became the successor administrative agent under the New Credit Facility.

The New Credit Facility provides that outstanding loans ~~will~~bore ~~bear~~ interest at rates based on LIBOR plus an applicable margin of 7.0% per annum or, at the option of Reddy Corp, the Base Rate, plus an applicable margin of 6.0% per annum, the relevant margin being the applicable margin. Swing line loans ~~will~~bore ~~bear~~ interest at the Base Rate plus the applicable margin. LIBOR and Base Rates ~~are~~ were subject to floors of 1.5% and 2.5%, respectively. Interest on LIBOR loans iswas payable upon maturity of the LIBOR loan or on the last day of the quarter if the term of the LIBOR loan ~~exceeds~~exceeded 90 days. Reddy Corporation ~~will~~was obligated to pay an anniversary fee on each anniversary of the effectiveness of the New Credit Facility equal to 1.0% of the commitments under the New Credit Facility on the first anniversary and increasing on each subsequent anniversary by 0.5%, as well as a $50,000 quarterly loan servicing fee. Additionally, for each full calendar year beginning with 2011, if the average balance outstanding under the New Credit Facility iswas less than $12.5 million for the calendar year, the Borrower ~~shall~~was obligated to pay to the Lenders an amount equal to (x) the difference between the average balance outstanding and $12.5 million multiplied by (y) the average interest rate for LIBOR Loans during that calendar year (determined based on average one month LIBOR rates as of the end of each quarter during such calendar year). The New Credit Facility ~~will~~would ~~mature~~have matured on October 22, 2014. At ~~September~~March 3031, ~~2011~~2012, the Company had $1450.50 million outstanding and ~~$35.5 million~~no of availability under the New Credit Facility. The weighted average interest rate on borrowings under the New Credit Facility as of ~~September~~March 3031, 2012 ~~2011~~ was 7 8.46%.

The obligations under the New Credit Facility ~~are~~were fully and unconditionally guaranteed by Reddy Holdings and ~~will~~were also be guaranteed by any future domestic subsidiaries of Reddy Corp, subject to certain exceptions.

The New Credit Facility ~~does~~did not require any scheduled principal payments prior to its stated maturity date. Subject to certain conditions, mandatory repayments of the New Credit ~~Facility~~ Facility (and mandatory commitment reductions of the New Credit Facility) ~~are~~were required to be made with portions of the proceeds from (1) asset sales, (2) the issuance of debt securities ~~and~~ and (3) insurance and ~~condemnation awards, subject to various exceptions. In the event of a change in control, as defined in the New Credit Facility, an event of default will occur under the New Credit Facility.~~

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~~The New Credit Facility also contains affirmative and negative covenants applicable to Reddy Corp and its future subsidiaries~~condemnation awards, subject to ~~materiality~~various ~~and other qualifications, baskets and~~ exceptions. ~~The~~In ~~affirmative~~the ~~and~~event ~~negative~~of ~~covenants~~a ~~are~~change ~~substantially~~in ~~consistent~~control, ~~with~~as ~~those~~defined ~~contained~~ in the ~~March~~New ~~2010~~ Credit Facility., ~~The~~an ~~negative~~event ~~covenants,~~of ~~among~~default ~~other things,~~would ~~restrict~~have ~~the~~occurred ~~ability~~under ofthe ~~Reddy~~New ~~Corp~~Credit ~~to:~~Facility.

~~Under~~The ~~the restricted payments covenant in the~~ New Credit Facility, ~~Reddy~~also ~~Corp~~contained isaffirmative ~~generally prohibited from paying dividends~~ and ~~otherwise~~negative ~~transferring~~covenants ~~assets~~applicable to Reddy ~~Holdings. Reddy~~ Corp isand ~~permitted~~its tofuture ~~pay~~subsidiaries, ~~certain~~subject ~~limited~~to ~~dividends~~materiality toand ~~Reddy~~other ~~Holdings~~qualifications, ~~the~~baskets and ~~proceeds~~exceptions. ofThe ~~which~~affirmative ~~must~~and benegative ~~used~~covenants ~~for~~were ~~specific~~substantially ~~purposes,~~consistent ~~such~~with asthose tocontained ~~maintain~~in ~~Reddy~~the ~~Holdings'~~March ~~corporate~~2010 ~~existence,~~Credit ~~repurchase~~Facility. ~~the Discount~~The ~~Notes~~negative ~~and~~covenants, ~~pay~~among ~~interest~~other onthings, restricted the ability ~~Discount~~of ~~Notes.~~ Reddy Corp ~~may also distribute certain investments~~ to ~~Reddy Holdings.~~ :

•: incur additional indebtedness or issue certain preferred shares;
•: create liens;
•: make investments;
•: pay dividends or make other restricted payments;
•: consolidate or merge or acquire or dispose of assets;
•: enter into transactions with affiliates;
•: permit consensual encumbrances or restrictions on Reddy Corp's restricted subsidiaries' ability to pay dividends or make certain other payments to Reddy Corp; and
•: prepay certain indebtedness, including the First Lien Notes and the Second Lien Notes.

InUnder ~~addition, Reddy Corp may also pay dividends to Reddy Holdings for specified purposes, including~~ the ~~payment~~restricted ofpayments ~~cash~~covenant ~~interest~~in on the ~~Discount Notes. The~~ New Credit Facility ~~(and the March 2010 Credit Facility~~, ~~while~~Reddy itCorp was ingenerally ~~effect)~~prohibited ~~precludes Reddy Corp~~ from ~~declaring~~paying ~~any~~ dividends ifand anotherwise ~~event~~transferring ofassets ~~default~~to ~~under~~Reddy ~~the credit facility has occurred and is continuing~~Holdings. ~~In particular, it~~Reddy ~~will~~Corp bewas anpermitted ~~event~~to ofpay ~~default~~certain ~~under~~limited ~~the~~dividends ~~New~~to ~~Credit Facility if~~ Reddy ~~Corp's~~Holdings, ~~leverage ratio (defined as~~ the ~~ratio~~proceeds of ~~the~~which ~~outstanding~~were ~~balance~~required ~~of the New Credit Facility on the last day of each quarter~~ to ~~EBITDA~~ ~~(as~~be ~~defined~~used in the New Credit Facility) over the preceding four quarters) exceeds 2.50:1.00 as of the end of any quarter. The New Credit Facility requires the maintenance of a minimum liquidity amount of $5 million at all times. Liquidity for specific purposes, ofsuch ~~this covenant is defined~~ as ~~the~~to ~~sum~~maintain ~~of available borrowing capacity under the New Credit Facility and unrestricted cash held by~~ Reddy ~~Corp. The New Credit Facility is collateralized by substantially all of the Company~~Holdings's ~~assets.~~corporate ~~Reddy~~existence, repurchase ~~Holdings guarantees~~ the ~~New~~Discount ~~Credit~~Notes ~~Facility~~ and ~~such~~pay ~~guarantee~~interest ison ~~collateralized by a pledge of substantially all of~~ the ~~assets~~Discount ~~of Reddy Holdings~~Notes. ~~At September 30, 2011,~~ Reddy Corp was inalso ~~compliance~~permitted ~~with~~to ~~the~~distribute ~~ratio~~certain ~~requirements~~investments ~~included~~to inReddy ~~New Credit Facility~~Holdings.

~~Obligations~~In ~~under~~addition, Reddy Corp could also pay dividends to Reddy Holdings for specified purposes, including the payment of cash interest on the Discount Notes. The New Credit Facility ~~may~~(and bethe March ~~declared~~2010 ~~immediately~~Credit ~~due~~Facility, while it was in effect) precluded Reddy Corp from declaring any dividends if an event of default under the credit facility occurred and ~~payable~~was ~~upon~~continuing. In particular, it was an event of default under the ~~occurrence~~New Credit Facility if Reddy Corp's leverage ratio (defined as the ratio of ~~certain~~the ~~events~~outstanding balance of ~~default~~the New Credit Facility on the last day of each quarter to EBITDA (as defined in the ~~credit~~New ~~agreement,~~Credit ~~including failure~~Facility) toover ~~pay~~the preceding four quarters) exceeded 2.50:1.00 as of the end of any ~~principal~~quarter. ~~when~~The ~~due~~New ~~and~~Credit ~~payable,~~Facility ~~failure~~required tothe ~~pay~~maintenance ~~interest~~of ~~within~~a ~~five~~minimum liquidity (amount of $5) ~~days~~million ~~after~~at ~~due~~all times. Liquidity for purposes of this covenant was defined as the sum of available borrowing capacity under the New Credit Facility and unrestricted cash held by Reddy Corp. On March 27, ~~failure~~2012, we amended the New Credit Facility to ~~comply~~eliminate ~~with~~the ~~any~~minimum liquidity covenant through July 15, ~~representation~~2013. orOn ~~condition~~March 30, of2012, ~~any~~we ~~loan~~obtained ~~document,~~a ~~any~~waiver ~~change~~to, ofamong ~~control~~other things, ~~cross-defaults~~(i) extend the deadline to submit our 2011 financial statements to April 16, 2012 and ~~certain~~(ii) waive ~~other~~any ~~events~~event of default that may occur as ~~set~~a ~~forth~~result of our delivering 2011 financial statements containing an impermissible qualification as defined in the credit ~~agreement~~facility relative to substantial doubt about our ability to continue as a going concern. See "Restructuring Transactions—Credit Facility" below. The New Credit Facility was collateralized by substantially all of the Company's assets. Reddy Holdings guaranteed the New Credit Facility and such guarantee was collateralized by a pledge of substantially all of the assets of Reddy Holdings. At March 31, 2012, Reddy Corp was in compliance with ~~grace~~the ~~periods~~ratio requirements included in ~~some~~New ~~cases~~Credit Facility.

AnObligations ~~acceleration of the indebtedness~~ under the New Credit Facility ~~would~~could be andeclared ~~event~~immediately due and payable upon the occurrence of certain events of default ~~under~~as defined in the ~~First~~credit ~~Lien~~agreement, ~~Notes~~including failure to pay any principal when due and ~~Second~~payable, ~~Lien~~failure ~~Notes~~to ifpay ~~the~~interest ~~outstanding~~within ~~balance~~five (5) days after due, failure to comply with any covenant, representation or condition of ~~the~~any ~~New~~loan document, ~~Credit~~any ~~Facility~~change atof control, cross-defaults, bankruptcy and certain other events as set forth in the ~~time~~credit ofagreement, ~~acceleration~~with isgrace ~~over~~periods ~~$10 million~~in some cases.

~~At September 30, 2011, Reddy Holdings had $10.8 million of cash on hand that was not subject to restrictions under our New Credit Facility.~~ 47

EBITDA as defined in our New Credit Facility is hereafter referred to as "Adjusted EBITDA".

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~~The following~~An ~~table~~acceleration ~~presents~~of ~~Adjusted~~the ~~EBITDA~~indebtedness ~~for~~under the ~~twelve~~New ~~month~~Credit ~~period~~Facility ~~ended~~would ~~September 30,~~have ~~2011~~been onan aevent ~~pro~~of ~~forma~~default ~~basis~~under ~~after giving effect to~~ the ~~adjustments~~First ~~related~~Lien toNotes ~~the acquisition~~and orSecond ~~disposal~~Lien ofNotes ~~businesses~~if ~~which are permitted under~~ the outstanding ~~description~~balance of the ~~definition of Leverage Ratio as set forth in the~~ New Credit Facility. ~~Adjusted~~at ~~EBITDA~~the istime ~~different~~of ~~from~~acceleration ~~EBITDA that~~was isover ~~derived solely from GAAP components~~$10 million. ~~Adjusted~~The ~~EBITDA~~Bankruptcy ~~should~~filing ~~not~~constituted ~~be construed as~~ an ~~alternative~~event ~~to net income (loss), cash flows from operations or net cash from operating or investing activities as defined by GAAP, and it is not necessarily indicative~~ of ~~cash~~default ~~available~~under tothe ~~fund~~credit ~~our~~agreement ~~cash~~governing ~~needs as determined in accordance with GAAP. In addition, not all companies use identical~~the ~~calculations,~~New ~~and~~Credit ~~this presentation may not be comparable to similarly titled measures of other companies~~Facility. ~~A reconciliation of net income to EBITDA and Adjusted EBITDA follows the table.~~

~~The~~On ~~following~~April 13, ~~table~~2012, ~~sets~~Reddy ~~forth~~Corp ~~pro~~received ~~forma~~interim ~~Adjusted~~approval ~~EBITDA~~from the Bankruptcy Court to enter into a new debtor-in-possession revolving credit facility with Macquarie Bank Limited, as ~~calculated~~the ~~under~~sole ~~our~~lender and administrative agent (the "DIP Credit Facility"). On April 16, 2012, Reddy Corp entered into the DIP Credit Facility. The DIP Credit Facility consists of a revolving credit facility in an amount not to exceed $70 million, a portion of the proceeds of which were used to repay the New Credit Facility, also known as the Pre-Petition Credit Facility. The Company received the final order approving the DIP Credit Facility from the Bankruptcy Court on May 4, 2012. The DIP Credit Facility will provide additional liquidity during the restructuring process and contains a commitment from Macquarie, subject to the ~~financial~~satisfaction ~~covenants~~of ~~contained~~certain conditions, some of which are not in Reddy Corp's control, to provide a senior secured first lien revolving credit facility on substantially the ~~New~~same terms as the Pre-Petition Credit Facility: upon Reddy Corp's emergence from bankruptcy.

		Twelve Months Ended September 30, 2011
		(unaudited, in thousands)
Pro forma adjusted EBITDA		$52,471
Leverage ratio		0.3 : 1.0
Minimum liquidity		$21,136

Borrowings under the DIP Credit Facility bear interest at a rate equal to LIBOR plus an applicable margin of 7.0% per annum, or, at the Company's option, the Alternative Base Rate plus an applicable margin of 6.0% per annum. LIBOR and the Base Rate are subject to floors of 1.5% and 2.5%, respectively. The DIP Credit Facility will not provide for the issuance of letters of credit. The DIP Credit Facility will mature on July 16, 2012, with a three month extension at Reddy Corp's option, subject to limited conditions to extension, including the payment of an extension fee equal to 1.25% of the full amount of the DIP Credit Facility commitments.

46 The obligations under the DIP Credit Facility are fully and unconditionally guaranteed by Reddy Holdings and will also be guaranteed by any future domestic subsidiaries of Reddy Corp. The DIP Credit Facility is collateralized by first priority priming liens on substantially all of the Reddy Corp's assets and is entitled to superpriority administrative claim status.

Subject to certain conditions, mandatory prepayments of the DIP Credit Facility (and mandatory commitment reductions of the DIP Credit Facility) will be required to be made with portions of proceeds from asset sales, subject to various exceptions.

The DIP Credit Facility contains affirmative and negative covenants applicable to Reddy Corp and its future subsidiaries, subject to materiality and other qualifications, baskets and exceptions. The affirmative and negative covenants are substantially the same as the Pre-Petition Credit Facility, modified as necessary to reflect the commencement and continuation of the voluntary bankruptcy cases under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Cases") and the effects that customarily result from reorganization under Chapter 11 of the United States Bankruptcy Code. The financial covenants include a maximum leverage ratio, compliance with cash flow budgets and repayment limitation.

Obligations under the DIP Credit Facility may be declared immediately due and payable upon the occurrence of certain events of default, subject to thresholds and grace periods in some cases. The events of default are substantially the same as the Pre-Petition Credit Facility, modified as necessary to reflect the commencement of the Bankruptcy Cases and such other matters as the administrative agent shall specify.

At March 31, 2012, Reddy Holdings had $5.4 million of cash on hand that was not subject to restrictions under our New Credit Facility.

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For information regarding the New Credit Facility and the DIP Credit Facility, see "Restructuring Transactions—Credit Facility".

EBITDA as it was defined in our New Credit Facility is hereafter referred to as "Adjusted EBITDA".

The following table presents Adjusted EBITDA for the twelve month period ended March 31, 2012 on a pro forma basis after giving effect to the adjustments related to the acquisition or disposal of businesses which are permitted under the description of the definition of Leverage Ratio as set forth in the New Credit Facility. Adjusted EBITDA is different from EBITDA that is derived solely from GAAP components. Adjusted EBITDA should not be construed as an alternative to net income (loss), cash flows from operations or net cash from operating or investing activities as defined by GAAP, and it is not necessarily indicative of cash available to fund our cash needs as determined in accordance with GAAP. In addition, not all companies use identical calculations, and this presentation may not be comparable to similarly titled measures of other companies. A reconciliation of net income to EBITDA and Adjusted EBITDA follows the table.

The following table sets forth pro forma Adjusted EBITDA as calculated under the New Credit Facility and the financial covenants contained in the New Credit Facility that remained in effect at March 31, 2012, prior to its repayment on April 16, 2012:

	Twelve Months Ended March 31, 2012

	(unaudited, in thousands)
Pro forma adjusted EBITDA	$	44,172
Leverage ratio		1.1:1.0

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The following table sets forth a reconciliation of net loss to EBITDA and Adjusted EBITDA:

			Twelve Months Ended September 30, 2011
		Twelve Months Ended March 31, 2012
		(unaudited, in thousands)	~~(unaudited, in thousands)~~
Net loss		$	$(74,696	~~(65,169~~)	)
Depreciation expense related to cost of sales			26,851	~~32,440~~
Depreciation and amortization expense			8,880	~~9,551~~
Interest expense			59,344	~~58,273~~
Interest income			(14	~~(17~~)	)
Income tax benefit				(9,632	)
Income tax expense			896
EBITDA			21,261	~~25,446~~
Other non-cash items:
	Stock-based compensation expense(a)			2,456
Stock-based compensation expense			1,994
Loss on dispositions of assets	~~Loss on dispositions of assets~~		289	~~628~~
Impairment of long-lived assets	~~Impairment of long-lived assets~~		3,962	~~12,569~~
	Decrease in fair value of derivative			245
Increase in fair value of derivative			(50	)
	Adjustment to gain on bargain purchase			32
Acquisition expense			4,251
	Acquisition expense			4,662
Debt refinance costs			3,227
Gain on contingent acquisition consideration	~~Gain on contingent acquisition consideration~~		(518	~~(202~~)	)
	Debt refinance costs			2,361
Restructuring costs			559
Reddy Holdings items:
Reorganization costs			3,837
	Cost related to antitrust investigations and related litigation, net of insurance recoveries(b)			4,637
Reddy Holdings items:
Adjusted EBITDA				52,834
Cost (insurance recoveries) related to antitrust investigations and related litigation, net(a)			5,390
Acquisition adjustments(c)				(363	)
Adjusted EBITDA			44,202
Pro forma adjusted EBITDA			$	52,471
Acquisition adjustments(b)			(30	)
Pro forma adjusted EBITDA		$	44,172

(a)~~The $2.5 million stock-based compensation expense for the twelve months ended September 30, 2011 includes a $0.3 million expense for Board of Directors stock awards (b)~~Represents the elimination of the net costs incurred in connection with the ongoing antitrust investigations and related litigation of insurance recoveries. The costs related to the antitrust investigations and related civil litigation and related insurance recoveries are excluded from the calculation of Adjusted EBITDA as these costs have been paid, and the related insurance recoveries have been received, by Reddy Holdings. Reddy Holdings is currently paying these costs from the excess cash remaining from the initial public offering of its common stock in August 2005, the funds paid to Reddy Holdings by affiliates of GSO Capital Partners LP in February 2008 in connection with ~~the termination of a merger agreement,~~ insurance proceeds ~~related~~, ~~to the antitrust investigations~~ and ~~related~~dividends ~~litigation,~~ and ~~dividends~~other funds received from ~~Reddy~~its wholly-owned ~~Corp~~subsidiary, inReddy ~~the~~Ice ~~amount of $3~~Corporation.~~0 million since the DOJ investigation began.~~ (cb)Represents the ~~incremental~~ Adjusted EBITDA of acquired businesses as if each acquisition had been consummated on the first day of the period presented. All ~~acquisitions~~ acquisitions included herein were consummated on or before ~~September~~March 3031, ~~2011~~2012.

47 Letters of Credit. Each of the New Credit Facility and the DIP Credit Facility do not provide for the issuance of standby letters of credit. In March 2010, Reddy Corp entered into a separate $15 million letter of credit facility with JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association (the "LC Facility"). Letters of credit issued under the LC Facility are cash collateralized at 102% of the amount of the letter of credit and are used primarily to secure certain insurance and operating lease obligations. As of March 31, 2012, $10.4 million of letters of credit were outstanding. The cash collateral provided under the LC Facility is maintained in a restricted account at JP Morgan Chase Bank, N.A. and is reported as "Restricted Cash" in the consolidated balance sheets.

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~~Letters~~ Intercompany ofPromissory ~~Credit~~Note. ~~The~~In ~~New~~March ~~Credit~~of ~~Facility~~2012, ~~does~~Reddy ~~not~~Corp ~~provide~~issued ~~for~~an ~~the~~Intercompany ~~issuance~~Promissory ofNote ~~standby~~to ~~letters of credit. In March 2010,~~ Reddy ~~Corp~~ ~~entered~~Holdings ~~into~~for athe ~~separate~~principal ~~letter~~amount of approximately ~~credit~~$8.6 million. ~~facility~~The ~~with~~note ~~JPMorgan~~matures ~~Chase~~on ~~Bank~~September 1, ~~N.A.~~2012 and ~~Wells~~bears ~~Fargo~~an ~~Bank,~~interest ~~National~~rate ~~Association~~of ~~(the "LC Facility")~~12.5% ~~Letters~~per ofannum ~~credit~~due ~~issued~~at ~~under~~ the LCnote's ~~Facility~~maturity. ~~are~~Reddy ~~cash~~Holdings ~~collateralized at~~may ~~102%~~demand repayment of ~~the~~all ~~amount~~or any portion of the ~~letter~~note, oftogether ~~credit~~with ~~and~~accrued ~~are~~interest, ~~used~~at ~~primarily~~any totime ~~secure~~prior ~~certain~~to ~~insurance~~maturity. ~~and~~As ~~operating~~of ~~lease~~March 31, ~~obligations.~~2012, ~~The~~the ~~cash~~principal ~~collateral~~outstanding ~~provided~~ under the LCIntercompany ~~Facility~~Promissory isNote ~~maintained in a~~was ~~restricted~~$8.4 million. ~~account~~Associated ataccrued JPinterest ~~Morgan~~of ~~Chase~~$0.1 million ~~Bank,~~was ~~N.A.~~included ~~and~~in isAccrued ~~reported~~Expenses ason ~~"Restricted~~Reddy ~~Cash"~~Corp's inbalance ~~the~~sheet ~~consolidated~~as ~~balance~~of ~~sheets~~March 31, 2012.

Old Senior Credit Facilities. On August 12, 2005, the Company amended and restated its credit facilities with a syndicate of banks, financial institutions and other entities as lenders, including Credit Suisse, Cayman Islands Branch, as Administrative Agent, Wachovia Bank, N.A., JP Morgan Chase, N.A., CIBC World Markets Corp., Bear Stearns Corporate Lending Inc. and Lehman Commercial Paper, Inc. (the "Old Credit Facilities"). The Old Credit Facilities provided for a $60 million revolving credit facility (the "Old Revolving Credit Facility") and a $240 million term loan (the "Old Term Loan"). The Old Credit Facilities were obligations of Reddy Corp and were guaranteed by Reddy Holdings. The Old Revolving Credit Facility and Old Term Loan were scheduled to mature on August 12, 2010 and August 12, 2012, respectively. On March 15, 2010, the Old Credit Facilities were terminated and all amounts owed thereunder were repaid from the proceeds of the sale of the First Lien Notes.

The Old Revolving Credit Facility and Old Term Loan did not require any scheduled principal payments prior to their stated maturity dates. The Old Credit Facilities contained financial covenants, which include the maintenance of certain financial ratios, as defined in the Credit Facilities, and were collateralized by substantially all of the Company's assets.

Financial Derivative Instruments

Diesel Hedging ~~Agreement~~Agreements. On March 25, 2011, the Company entered into a hedge to fix the price per gallon of a portion of the Company's ~~diesel~~ diesel fuel requirements (the "Diesel Hedge"). The Diesel Hedge began April 1, 2011 and ~~expires~~expired on December 28, 2011. The notional amount of gallons hedged ~~changes~~changed on a monthly basis to ~~match~~ match anticipated utilization and ~~totals~~totaled 1.2 million gallons. The Company ~~will~~paid ~~pay~~ a weighted average fixed price of $3.17 per gallon (wholesale basis) and ~~receive~~received an amount equal to a wholesale index rate. ~~Net~~Any net payable or receivable amounts ~~are~~were settled monthly. On May 6, 2011, the Company entered into a hedge to fix the price per gallon of a portion of the Company's diesel fuel requirements (the "Second Diesel Hedge"). The Second Diesel Hedge began June 1, 2011 and ~~expires~~was effective through on December 31, 2012. The notional amount of gallons hedged changes on a monthly basis to match anticipated usage and totals 1.1 million gallons, 0.5 million gallons of which ~~relates~~related to expected 2012 usage. On April 5, 2012 we sold our hedge contract covering 0.4 million gallons for a gain of $0.05 million. The Company ~~will~~paid ~~pay~~ a weighted average fixed price of $3.04 per gallon (wholesale basis) and ~~receive~~received an amount equal to a wholesale index rate. Net payable or receivable amounts ~~are~~were settled monthly. The Company ~~uses~~used the hedges to minimize the risk of rising fuel prices. The hedges ~~are~~were not for trading purposes and ~~are~~ were accounted for as economic hedges and were not designated as hedging instruments.

~~Liquidity Outlook. Due to the seasonal nature of our business, we record the majority of our revenues and profits during the months of May through September. The majority of the cash generated~~ 51

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~~from those~~ ~~operations~~Going isConcern received between July and November. We fully utilized the excess cash generated from our 2010 selling season during the winter of 2010 and spring of 2011 to fund our operations, debt service, capital expenditures and acquisitions. In March 2010, we refinanced substantially all of our outstanding debt. The March 2010 refinancing provided us with additional cash proceeds of $43.5 million, net of transaction costs, which allowed for additional acquisitions and capital expenditures. In August 2010, we increased the size of our revolving credit facility from $35 million to $50 million. In October 2010, we amended and restated our revolving credit facility to, among other changes, modify financial covenants and extend the maturity date from January 31, 2014 to October 22, 2014. The annual cash interest associated with our current long-term debt is approximately $53 million. Analysis

~~Our capital~~Due ~~expenditures are used~~ to ~~maintain~~deterioration ~~and~~in ~~expand~~ our ~~traditional~~business ~~ice~~related ~~and~~principally ~~ISB~~to ~~operations.~~price Indeclines ~~the~~driven ~~normal~~by ~~course~~industry ofcompetition across our ~~business~~markets, ~~we dispose of obsolete, worn-out~~ and ~~unneeded~~coupled ~~assets~~with ~~and~~broader ~~have~~economic ~~historically~~instability ~~applied~~and ~~those~~rising ~~funds~~commodity ~~against~~prices, ~~capital~~we ~~expenditures.~~experienced Wesignificant ~~currently expect our~~ net ~~capital~~losses ~~expenditures~~ in 2011 toand ~~approximate $11 to $13 million~~2010. ~~This represents~~Our ~~our~~financial ~~capital~~results ~~expenditures~~are ~~for~~also ~~the~~burdened ~~maintenance~~by ofhigh ~~our~~interest ~~traditional~~costs ~~packaged ice and ISB operations net of proceeds~~ resulting from ~~dispositions~~our ~~and~~highly ~~expected~~leveraged ~~net~~capital ~~reimbursements~~structure. ofThese ~~the~~factors ~~cost of equipment purchased~~ and ~~placed~~uncertainty ~~under~~in ~~operating~~our ~~leases,~~ability ~~and~~to ~~additional~~generate ~~expenditures~~sufficient ~~for~~liquidity ~~key projects related~~ to ~~acquisitions~~meet ~~and~~our ~~high~~future ~~return~~obligations ~~opportunities.~~in Wea ~~continue~~timely tomanner ~~evaluate~~have ~~opportunities~~caused tomanagement ~~deploy~~to ~~additional~~conclude ~~capital~~that ~~expenditures~~there ~~for~~is ~~projects~~substantial ~~with~~doubt ~~attractive~~regarding ~~returns~~our ~~and/or~~ability ~~acquisitions~~to incontinue ~~the~~as ~~packaged~~a ~~ice~~going ~~and ice machine leasing businesses~~concern.

~~Based~~Our onability ~~our expected level of operations, we believe that cash flows from operations, together with available borrowings under our revolving credit facility, will be adequate~~ to ~~meet our~~successfully ~~future~~recapitalize ~~liquidity needs for at least~~ the ~~next~~business ~~twelve months. As of November 7, 2011, we had approximately $10.2 million of cash on hand at Reddy Holdings, approximately $1.1 million of unrestricted cash~~ and ~~$13.1 million~~ensure ofsufficient ~~restricted~~liquidity ~~cash~~to atsupport ~~Reddy Corp and $32.0 million of availability under~~ our ~~revolving credit facility. Our cash flows from~~ operations ~~decline~~as toa ~~their~~going ~~lowest~~concern ~~point~~is ~~during~~dependent ~~March and April due to reduced sales in January and February, and we make interest payments~~ on our ~~outstanding~~ability ~~notes~~to inobtain ~~March~~approval ~~and~~by ~~May~~the U.S. WeBankruptcy ~~incur~~Court ~~a substantial portion~~ of ~~our annual capital expenditures prior to~~ the ~~summer~~refinancing ~~selling~~plan ~~season~~described ~~and~~below ~~we need to finance seasonal increases in accounts receivable~~ and ~~inventories as temperatures and sales volumes begin~~ to ~~increase~~generate infuture ~~April~~cash ~~and~~flows ~~May. The utilization of our revolving credit facility reached its seasonal high point in June of 2011. Subject to the authorization of additional capital expenditures above the current budget~~ and~~/or~~ ~~the~~maintain ~~completion~~liquidity ofsufficient additional acquisitions, we expect that the amount currently outstanding under the revolving credit facility will be repaid or significantly reduced by early 2012 until additional borrowings are needed due to ~~the~~service ~~onset of~~ our ~~seasonal liquidity needs, which begin to build again late in the first quarter of 2012~~debt.

~~As noted~~ ~~previously,~~Restructuring we record the majority of our sales and any profits during the months of May through September and the majority of the cash generated from those operations is received in July through November, by which time we expect to have repaid all or a substantial portion of the amounts borrowed under our revolving credit facility in the spring, funded current capital expenditures and debt service and potentially built up cash balances. In 2012, we anticipate experiencing the seasonal low point in our liquidity in the May-June timeframe, but available cash balances and borrowing capacity under the revolving credit facility are expected to meet our cash needs during this period. In addition, $11.7 million of discount notes are scheduled to mature on November 1, 2012 and we expect to have sufficient liquidity to repay these notes in cash. We are monitoring opportunities to refinance the discount notes and are also evaluating other potential avenues to raise capital to fund our strategic plans and provide additional liquidity. Potential sources of cash and liquidity include the incurrence of additional debt and/or the issuance of equity or equity linked securities, the timing of capital expenditures and the disposition of ancillary facilities, operations and investments. However, there can be no assurances that any of these potential sources of funds can be successfully accessed. We expect to be in compliance with our debt covenants over the next twelve months. Transactions

49 We have a substantial amount of debt, as discussed more fully in Note 6 to our financial statements. Certain of the capitalized terms used below are defined therein.

In 2011, as our EBITDA declined, we began to explore alternatives to address our capital structure. In recent months these efforts have accelerated, with an informal committee of the largest holders of our existing first and second lien notes negotiating the terms of a restructuring of our debt obligations (the "Restructuring"). One of the members of the informal committee is Centerbridge Capital Partners II, L.P. and one or more of its parallel funds and related vehicles (collectively, "Centerbridge"), a fund managed by Centerbridge Partners L.P., and a private investment firm that currently has approximately $19 billion in capital under management. Described below are the anticipated terms of the Restructuring. There can be no assurance that the Restructuring will be consummated on the terms described below, or at all.

Strategic Acquisition Opportunity. In addition to addressing our declining EBITDA and current debt, the Restructuring is also intended to provide us with the opportunity to pursue a strategic acquisition of all or substantially all of the businesses and assets of Arctic Glacier Income Fund and its subsidiaries ("Arctic"). As is the case with our business, Arctic has encountered financial difficulties due to adverse trends in our industry in recent years. On February 22, 2012, Arctic filed for protection under the Companies' Creditors Arrangement Act in Canada and Chapter 15 of the Bankruptcy Code in the United States. Arctic has initiated a Sale and Investor Solicitation Process ("SISP"). The purpose of the SISP is to seek sale proposals and investment proposals from qualified bidders and to implement one or a combination of them in respect of Arctic's property and business.

On March 28, 2012, we submitted a non-binding letter of intent to Arctic regarding participation in the SISP. The letter of intent contemplates our acquisition of substantially all of Arctic's business and assets. On April 5, 2012, we were advised by the financial adviser to Arctic that we were approved to move to phase 2 of the SISP. The successful bidder will be selected at the end of phase 2 of the SISP. Our interest in Arctic remains subject to, among other things, completion of due diligence, negotiation of acceptable transaction documents, and receipt of sufficient commitments for debt and equity financing for the acquisition. Centerbridge has indicated its interest in providing the entire amount of the equity financing for the Arctic acquisition. There can be no assurance that we will consummate an acquisition of Arctic.

In order to have the ability to acquire Arctic, we must restructure our debt obligations in a manner which creates a sustainable capital structure and permits us to obtain additional debt and equity financing. Described below are the terms of the Restructuring that we have negotiated with the informal committee of certain of our existing first and second lien note holders.

Chapter 11 Bankruptcy Cases. In order to consummate the transactions described below, including the entry into the DIP Credit Facility, the amendment to the First Lien Notes, the exchange of the

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~~Expenses~~Second inLien ~~connection~~Notes, ~~with~~ the ~~antitrust~~cancellation ~~investigations~~of ~~and~~the ~~related~~Discount ~~civil~~Notes, ~~litigation~~and ~~may~~the ~~require~~consummation of the ~~use~~rights ofoffering, ~~cash~~we oncommenced ~~hand~~the atsolicitation ~~Reddy~~of ~~Holdings~~acceptances orwith ~~Reddy~~respect ~~Corp.~~to ora ~~borrowings~~plan ~~under~~of ~~our~~reorganization (the ~~revolving~~"Plan") ~~credit~~on ~~facility~~April 11, 2012. AsOn ~~of November~~April 712, ~~2011~~2012, ~~our cash on hand at~~ Reddy Ice Holdings, Inc. ~~net~~and ofReddy ~~accrued~~Ice ~~expenses~~Corporation ~~related~~filed tovoluntary ~~the~~bankruptcy ~~antitrust~~cases ~~investigations~~under ~~and~~Chapter 11 ~~related~~of ~~civil~~the ~~litigation, was approximately $7~~U.~~9 million~~S. ~~Based~~Bankruptcy Code on (the ~~current~~"Bankruptcy ~~status~~Cases") ofin the ~~investigation~~United ~~and~~States ~~related~~Bankruptcy ~~civil~~Court ~~litigation and projected expenses, we believe Reddy Holdings' cash balance will be sufficient to fund these expenses~~ for the ~~next~~Northern ~~twelve~~District ~~months;~~of ~~however,~~Texas ~~this~~(the ~~expectation~~"Bankruptcy ~~includes assumptions regarding matters beyond our control or knowledge~~Court"). IfThis ~~Reddy~~process ~~Holdings~~could, ~~were~~but tois ~~require~~not ~~additional~~expected ~~cash~~ to ~~fund~~, ~~its~~have ~~expenses~~an ~~related~~adverse toeffect ~~the~~on our ~~antitrust investigations, Reddy Corp~~operations. ~~has~~Immediately ~~the~~upon ~~ability~~filing, ~~under~~we ~~the~~requested ~~credit~~Bankruptcy ~~facility~~Court toapproval ~~transfer $1 million~~ to ~~Reddy~~pay ~~Holdings~~critical onsuppliers ~~an annual basis~~ and another ~~additional general~~vendors ~~restricted~~in ~~payment basket of $5 million over~~ the ~~remaining~~ordinary ~~life~~course of ~~the credit facility~~business. ~~Reddy~~All ~~Holdings~~of ~~has~~our nocustomers ~~restrictions~~will oncontinue ~~its ability~~ to ~~raise~~be serviced ~~additional~~without ~~debt~~interruption. ~~We have received~~ ~~reimbursements~~Although ofwe ~~$12.2 million~~intend to ~~date~~continue ~~from~~to ~~our~~provide ~~insurance~~such ~~carriers~~products asand ~~reimbursements~~services ofto ~~certain~~our ~~legal~~customers ~~expenses.~~in ~~The~~the ~~settlements~~normal ~~related~~course, tothere ~~these~~can ~~reimbursements~~be ~~were~~no ~~final~~assurances ~~and~~that wecounterparties dowill ~~not~~continue ~~expect~~ to ~~receive~~conduct ~~any~~business ~~further~~with ~~reimbursements~~us while ~~related~~we ~~the~~are ~~antitrust~~in ~~investigations and related civil litigation~~Chapter 11.

With respect to the Plan, we solicited acceptances from only the holders of the First Lien Notes, the Second Lien Notes (and their respective guarantees), the Discount Notes and certain other unsecured creditors of Reddy Holdings, although the Plan will seek Bankruptcy Court approval of recoveries to holders of other unsecured creditors and the Common Stock as well. The deadline for voting to accept or reject the Plan was May 8, 2012. In addition, we requested the Bankruptcy Court to set a confirmation hearing with respect to the Plan for early May 2012 and hope to exit protection under the Bankruptcy Code shortly thereafter—before final round bids must be submitted with respect to the proposed Arctic acquisition.

Support agreements for the Plan have been executed by holders of approximately 60% of the principal amount of the First Lien Notes, approximately 58% of the principal amount of the Second Lien Notes and approximately 92% of the principal amount of the Discount Notes. Such support agreements require the holders of the First Lien Notes, the Second Lien Notes and the Discount Notes to, among other things, vote to accept the Plan.

First Lien Notes. Except as described below and except for other minor modifications, we do not plan to modify our obligations in respect of our existing First Lien Notes in the Restructuring.

We plan to amend the indenture governing the First Lien Notes to, among other things, permit (i) the incurrence of incremental pari passu first lien acquisition financing for the Arctic transaction, (ii) an amendment to the change of control provisions to prevent the occurrence of a change of control as a result of the Restructuring and (iii) an amendment to the reporting requirements to eliminate the need to continue as a reporting company under the Securities Exchange Act of 1934 (the "Exchange Act"). The First Lien Notes will continue to be guaranteed by Reddy Holdings.

In the event that we fail to consummate the Arctic acquisition, Centerbridge has agreed to convert $68.18 million in aggregate principal amount and accrued and unpaid interest of its First Lien Notes into preferred stock of Reddy Holdings with a liquidation preference of $75 million.

Second Lien Notes. Pursuant to the Plan, we are seeking to have holders of our Second Lien Notes exchange those Notes for their ratable share of (i) 6,094,327 shares of common equity of reorganized Reddy Holdings, subject to dilution in accordance with the other provisions of the Plan and a further distribution of certain of such shares upon the occurrence of certain events and (ii) new preferred stock of reorganized Reddy Holdings pursuant to the rights offering (to the extent such holder elects to participate in the rights offering).

Discount Notes. Under the Plan, the Discount Notes will be cancelled; however, subject to Bankruptcy Court approval and other conditions, the holders of the Discount Notes will receive such holder's ratable share of: (i) $4.7 million in cash on the consummation of the Restructuring and (ii) promissory notes in an initial amount of $1.2 million payable on the three month anniversary of the consummation of the Restructuring. The Discount Notes payment due under the promissory notes will accrue interest at a rate of 7% per annum from the consummation of the Restructuring to the three month anniversary of the consummation of the Restructuring. In the event that the Arctic acquisition is consummated prior to the three month anniversary of the consummation of the Restructuring, the

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principal amount of the promissory notes will be increased and the holders of the Discount Notes will receive their ratable share of an additional $2.3 million, which additional amount will accrue interest at a rate of 7% per annum from the consummation of the Restructuring until the three month anniversary of the consummation of the Restructuring. In the event that the Arctic acquisition is consummated after the three month anniversary of the consummation of the Restructuring, the additional payment will be made within ten (10) business days following the Arctic acquisition and will accrue interest at a rate of 7% per annum from the consummation of the Restructuring until the payment date. Such payments to the existing holders of the Discount Notes will be made from the distributions under the Plan to the holders of the Second Lien Notes.

Common Stock. Under the Plan, the common stock of Reddy Holdings will be cancelled. Subject to Bankruptcy Court approval and other conditions existing holders of our common stock will be entitled to receive a cash payment of approximately $0.12 per share for their shares, with an additional payment of approximately $0.05 per share made in the event the Arctic acquisition is consummated. The Company has entered into preliminary settlement agreements with respect to certain litigation as disclosed in Note 12 and "Item I—Legal Proceedings". Certain of these settlements received preliminary approval by the Bankruptcy Court on May 11, 2012. If approved these settlements would negatively impact the distributions to the holders of Reddy Holding's common stock disclosed above, and the distribution would be reduced to approximately $0.10. No change is anticipated to the additional payment described above in the event the Arctic acquisition is consummated. During the course of the ongoing reorganization, the Plan may be additionally modified such that distributions to the holders of Reddy Holdings' existing common stock from the holders of the Second Lien Notes may be changed from the amounts described above or eliminated. Holders of common stock who hold at least 25,000 shares will be entitled to elect to receive common shares of reorganized Reddy Holdings in lieu of the cash payment. Assuming all existing shares converted into stock of reorganized Reddy Holdings, following the consummation of the Restructuring, holders of the existing common stock of Reddy Holdings would initially hold approximately 2.0% of the equity of reorganized Reddy Holdings (inclusive of the New Preferred Stock on an as converted basis). In the event that we consummate the Arctic acquisition, holders of the existing common stock of Reddy Holdings who elected to receive shares of common stock of reorganized Reddy Holdings will be entitled to an additional distribution of shares of common stock of reorganized Reddy Holdings such that the aggregate value of the common stock of reorganized Reddy Holdings received by such holders is approximately equivalent to the aggregate cash distributions they would have been entitled to receive if they had elected to receive the cash distributions. Such payments and the issuance of shares of reorganized Reddy Holdings to the existing holders of common stock will be made from the distributions made under the Plan to the holders of the Second Lien Notes.

Class A Common Stock. Under the Plan, Centerbridge will receive one share of class A common stock of the reorganized Reddy Holdings. The holder of the share of the class A common stock will be entitled to vote with all voting securities of reorganized Reddy Holdings on all matters submitted to the holders of voting securities for vote. The share of class A common stock of reorganized Reddy Holdings will be entitled to 10,000,000 votes. Class A common stock of reorganized Reddy Holdings will not be entitled to the payment of any dividends or distributions and is redeemable by Reddy Holdings for $0.01 upon (x) the liquidation, dissolution or winding up of the affairs of Reddy Holdings or (y) the consummation or termination of the Arctic Acquisition.

Preferred Stock. Holders of Second Lien Notes who participate in the rights offering and Centerbridge, in connection with the Investment Agreement, the equity financing of the Arctic acquisition (if applicable) and the conversion of a portion of its First Lien Notes (if applicable), will receive new preferred stock of reorganized Reddy Holdings. The preferred stock will be perpetual, participating, cumulative preferred stock, with a 7.0% cumulative coupon payable in cash or in-kind at our option. The preferred stock will mandatorily convert into common stock upon the earlier of (x) our achievement of a total net debt to EBITDA ratio of less than 3.0:1.0 for a period of four consecutive quarters or (y) completion of a qualifying initial public offering of reorganized Reddy Holdings' common stock. The preferred stock may be optionally converted by the holder at any time. Holders of preferred stock will vote with the common stock on an as converted basis.

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Investment Agreement. In order to fund costs associated with the Restructuring and further reduce our level of indebtedness upon emergence, as well as to help enable us to acquire Arctic in the event we are the successful bidder, we have entered into an investment agreement with Centerbridge (the "Investment Agreement"). The Investment Agreement includes commitments of Centerbridge to (w) backstop the rights offering, (x) directly purchase New Preferred Stock in an amount not less than $7.5 million, (y) provide equity capital for the acquisition of Arctic and (z) in the event of the failure to acquire Arctic, exchange First Lien Notes for New Preferred Stock of Reddy Holdings, in each case subject to certain terms and conditions.

Rights Offering. In order to fund costs associated with the Restructuring and further reduce our level of indebtedness upon emergence, we will undertake and consummate a $17.5 million rights offering for preferred stock of Reddy Holdings in connection with our emergence from protection under the Bankruptcy Code. The rights offering will be open to existing holders of our Second Lien Notes on a ratable basis.

Credit Facility. On March 27, 2012, we entered into an amendment of our then-existing credit facility with Macquarie Bank Limited, the sole lender under that credit facility. The amendment (i) eliminated the minimum liquidity contained in the existing credit facility through July 15, 2013 and (ii) permitted us to obtain additional liquidity through (x) an additional $10 million term loan from Macquarie Bank Limited, secured by certain unencumbered real estate assets, and (y) the factoring of accounts receivable. We did not utilize the additional liquidity mechanisms described above. In connection with obtaining the amendment to that credit facility and Macquarie Bank Limited's commitment for the additional term loan, we paid a non-refundable fee of $2.0 million to Macquarie Bank Limited in March of 2012.

On March 30, 2012, we obtained a waiver from Macquarie Bank Limited of any default or event of default that may have occurred as a result of our failure to deliver our 2011 financial statements by March 30, 2012, or that might occur as a result of our delivery of our 2011 financial statements containing an impermissible qualification as defined in our existing credit facility relative to substantial doubt about our ability to continue as a going concern. The waiver extended the time period during which we were permitted to deliver our 2011 financial statements to Macquarie Bank Limited to April 16, 2012. The waiver terminated (i) on April 16, 2012 if we had not delivered our 2011 financial statements by that date, (ii) upon the occurrence of an event of default not specifically waived and (iii) in all other circumstances on March 30, 2013.

On April 13, 2012, we obtained interim Bankruptcy Court approval to enter into a new debtor-in-possession revolving credit facility with Macquarie Bank Limited, as the sole lender and administrative agent (the "DIP Credit Facility").

On April 16, 2012, Reddy Corp entered into the DIP Credit Facility. The DIP Credit Facility consists of a revolving credit facility in an amount not to exceed $70 million, a portion of the proceeds of which were used to repay Reddy Corp's amended and restated credit agreement, dated as of October 22, 2010, by and among Reddy Corp and Macquarie Bank Limited, as the sole lender and administrative agent (the "Pre-Petition Credit Facility"), upon entry of the interim order approving the DIP Credit Facility. Reddy Corp received the final order approving the DIP Credit Facility from the bankruptcy court on May 4, 2012. The DIP Credit Facility will provide additional liquidity during the restructuring process and will, subject to the satisfaction of certain conditions, some of which are not in the Reddy Corp's control, be converted into a senior secured first lien revolving credit facility on substantially the same terms as the Pre-Petition Credit Facility upon Reddy Corp's emergence from bankruptcy.

Borrowings under the DIP Credit Facility bear interest at a rate equal to LIBOR plus an applicable margin of 7.0% per annum, or, at Reddy Corp's option, the Alternative Base Rate plus an applicable margin of 6.0% per annum. LIBOR and the Base Rate are subject to floors of 1.5% and

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2.5%, respectively. The DIP Credit Facility will not provide for the issuance of letters of credit. The DIP Credit Facility will mature on July 16, 2012, with a three month extension at the Company's option, subject to limited conditions to extension, including the payment of an extension fee equal to 1.25% of the full amount of the DIP Credit Facility.

The obligations under the DIP Credit Facility are fully and unconditionally guaranteed by Reddy Holdings and will also be guaranteed by any future domestic subsidiaries of Reddy Corp. The DIP Credit Facility is collateralized by first priority priming liens on substantially all of the Reddy Corp's assets and is entitled to superpriority administrative claim status.

Liquidity Outlook. Due to the seasonal nature of our business, we record the majority of our revenues and profits during the months of May through September. The majority of the cash generated from those operations is received between July and November. We fully utilized the excess cash generated from our 2011 selling season during the winter of 2011 and spring of 2012 to fund our operations, debt service, and capital expenditures.

In March 2010, we refinanced substantially all of our outstanding debt. The March 2010 refinancing provided us with additional cash proceeds of $43.5 million, net of transaction costs, which allowed for additional acquisitions and capital expenditures. In August 2010, we increased the size of our revolving credit facility from $35 million to $50 million. In October 2010, we amended and restated our revolving credit facility to, among other changes, modify financial covenants and extend the maturity date from January 31, 2014 to October 22, 2014. The annual cash interest associated with our current debt is approximately $55 million, although we are only paying cash interest on the DIP Credit Agreement and the First Lien Notes during the Bankruptcy Cases.

Our capital expenditures are used to maintain and expand our traditional ice and ISB operations. In the normal course of our business, we dispose of obsolete, worn-out and unneeded assets and have historically applied those funds against capital expenditures. Our net capital expenditures in 2011 were $12.9 million. This represents our capital expenditures for the maintenance of our traditional packaged ice and ISB operations net of proceeds from dispositions and net reimbursements of the cost of equipment purchased and placed under operating leases, and additional expenditures for key projects related to acquisitions and opportunities with attractive return on investment. We currently expect our net capital expenditures in 2012 to approximate $10 million. Planned expenditures provide for minimum capital expenditures to maintain our traditional packaged ice and ISB operations, net of

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proceeds from dispositions. We also anticipate an additional $1 to $2 million expenditure to purchase leased assets for which the agreements will expire in 2012.

In March of 2012, Reddy Corp issued an Intercompany Promissory Note to Reddy Holdings for the principal amount of approximately $8.6 million. The note matures on September 1, 2012 and bears an interest rate of 12.5% per annum. As of March 31, 2012, the principal outstanding under the Intercompany Promissory Note was $8.4 million. As of March 31, 2012, we had no cash on hand at Reddy Holdings, approximately $5.4 million of unrestricted cash and $10.9 million of restricted cash at Reddy Corp. We had no additional borrowing capacity under our revolving credit facility as of March 31, 2012. Our cash flows from operations and liquidity decline to their lowest point during the March to May period due to seasonally lower sales in January and February and interest payments on our outstanding notes in March and May. We incur a portion of our annual capital expenditures and need to finance seasonal increases in accounts receivable and inventories as temperatures and sales volumes begin to increase in April and May.

Pursuant to the ongoing Chapter 11 proceedings, the Company did not make the interest payments on the Discount Notes or on the Second Lien Notes due on May 1, 2012.

As discussed above, we have embarked on restructuring transactions which will substantially modify our existing debt obligations. Our liquidity and cash needs in 2012 will depend substantially on our ability to consummate the contemplated restructuring transactions. There can be no assurances that the restructuring transactions will be consummated on the terms discussed above or at all. We are incurring significant costs pursuant to the ongoing reorganization and bankruptcy and our pursuit to acquire Arctic Glacier.

Expenses in connection with the antitrust investigations and related civil litigation may require the use of cash on hand at Reddy Holdings or Reddy Corp. or borrowings under our revolving credit facility. We have received reimbursements of $12.2 million to date from our insurance carriers as reimbursements of certain legal expenses. The settlements related to these reimbursements were final and we do not expect to receive any further reimbursements related the antitrust investigations and related civil litigation.

As of May 10, 2012, we had $51.5 million outstanding under our DIP facility with remaining borrowing capacity of $18.5 million, no cash on hand at Reddy Holdings, and approximately $2.0 million of unrestricted cash and $11.1 million of restricted cash at Reddy Corp.

Recently Adopted Accounting Pronouncements

In ~~September~~June of 2011, the FASB issued ASU 2011-0805, ~~Intangibles—Goodwill~~Comprehensive ~~and Other~~Income. ASU 2011-0805 ~~modifies~~requires ~~the~~that ~~goodwill~~all ~~impairment~~non-owner ~~test~~changes byin ~~allowing~~stockholders' ~~for~~equity anbe ~~assessment~~presented ofeither ~~qualitative~~in ~~factors~~a tosingle ~~determine~~continuous ~~whether~~statement ~~the existence~~ of ~~events~~comprehensive income or ~~circumstances~~ ~~leads~~in totwo aseparate ~~determination~~but consecutive ~~that~~statements. itIn isthe ~~more~~two-statement ~~likely~~approach, ~~than~~the ~~not~~first ~~that~~statement ~~the~~should ~~fair~~present ~~value~~total ofnet aincome ~~reporting~~and ~~unit~~its iscomponents ~~less~~followed ~~than~~by ~~its~~a ~~carrying~~second ~~amount.~~statement ~~If,~~that ~~based~~should onpresent ~~this~~total ~~assessment~~other comprehensive income, the ~~entity~~components ~~determines~~of ~~it is not~~other ~~more~~comprehensive ~~likely~~income, ~~than~~and ~~not that~~ the ~~fair~~total ~~value~~ of acomprehensive ~~reporting~~income. ~~unit~~ASU 2011-05 is ~~less~~effective ~~than~~for ~~its~~fiscal ~~carrying amount~~years, ~~the~~and ~~entity~~interim ~~may~~periods ~~bypass~~within ~~performing~~those years, ~~the~~beginning ~~two-step~~after ~~goodwill~~December 15, ~~impairment test~~2011. ~~However,~~In ifDecember of 2011, the ~~entity~~ ~~concludes~~FASB ~~otherwise~~issued ASU 2011-12, itComprehensive isIncome, ~~required~~deferring the effective date for amendments to ~~perform~~the ~~Step~~presentation 1of reclassifications of ~~the~~items ~~two-step~~out ~~goodwill~~of ~~impairment~~accumulated ~~test.~~other ~~ASU~~comprehensive income in ASU 2011-0805. ~~will~~All beother ~~effective~~requirements ~~for~~in ~~fiscal~~ASU 2011-05 ~~years~~are ~~beginning~~not ~~after December 15,~~affected by ASU 2011-12. The ~~adoption~~Company ofadopted ASU 2011-0805 isas ~~not~~of ~~expected~~January 1, to2012 ~~have~~and aupdated ~~material~~the ~~effect~~consolidated onfinancial statements according to the ~~Company's~~requirements ~~consolidated~~established ~~financial~~by ~~statements~~ASU 2011-05.

In ~~June~~September of 2011, the FASB ~~issue~~issued ASU 2011-0508, ~~Comprehensive~~Intangibles—Goodwill ~~Income~~and Other. ASU 2011-~~05 requires that all~~08 ~~non-owner~~modifies ~~changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In~~ the ~~two-statement~~ ~~approach,~~goodwill ~~the~~impairment ~~first~~test ~~statement should present total net income and its components followed~~ by aallowing ~~second~~for ~~statement~~an ~~that~~assessment ~~should~~of ~~present~~qualitative ~~total~~factors ~~other~~to ~~comprehensive~~determine ~~income,~~whether the ~~components~~ ofexistence ~~other comprehensive income, and the total~~ of ~~comprehensive~~events ~~income.~~or ~~ASU~~circumstances ~~2011-05~~leads ~~will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of ASU 2011-05 is not expected~~ to ~~have~~ a ~~material~~determination ~~effect~~that onit ~~the~~is ~~Company's~~more ~~consolidated financial statements.~~

In December 2010, the FASB issued ASU 2010-28, Intangibles—Goodwill and Other. ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts and offers guidance on when to perform Step 2 of the testing. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists based upon factors such as unanticipated competition, the loss of key personnel and adverse regulatory changes. ASU 2010-28 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-28 did not have a material effect on the Company's consolidated financial statements. 57

In December 2010, the FASB issued ASU 2010-29, which updates the guidance in ASC 805, Business Combinations, to clarify that pro forma disclosures should be presented as if a business combination occurred at the beginning of the prior annual period for purposes of preparing both the current reporting period and the prior reporting period pro forma financial information. These disclosures should be accompanied by a narrative description about the nature and amount of material, nonrecurring pro forma adjustments. ASU 2010-29 is effective for business combinations consummated

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inlikely ~~periods~~than ~~beginning~~not ~~after~~that ~~December 15~~the fair value of a reporting unit is less than its carrying amount. If, ~~2010~~based on this assessment, ~~and~~the entity determines it is ~~required~~not tomore belikely ~~applied~~than ~~prospectively~~not asthat the fair value of a reporting unit is less than its carrying amount, the ~~date~~entity ofmay ~~adoption.~~bypass ~~The~~performing ~~Company~~the ~~has~~two-step ~~reflected~~goodwill impairment test. However, if the ~~adoption~~entity concludes otherwise, it is required to perform Step 1 of the two-step goodwill impairment test. ASU ~~2010~~2011-2908 inwill ~~the~~be effective for fiscal years beginning after December 15, 2011. The adoption of ASU ~~disclosures~~2011-08 ~~accompanying~~did not have a material effect on the Company's consolidated financial statements.

New Accounting Pronouncements

None.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

General Economic Trends and Seasonality

Our results of operations are generally affected by the economic trends in our market area. We believe end users of our products use packaged ice in many applications, including recreational activities, the construction industry, agriculture and special events. Weakness in the national economy combined with other factors including inflation, interest rate fluctuations, increases in fuel and other energy costs, labor and healthcare costs and the availability of financing, may negatively impact consumer confidence and the business prospects of our commercial customers. If consumer activities associated with the use of our products decline or the business activities of our commercial customers decrease, our revenues and sales volumes may decline.

Our results to date have not been significantly impacted by inflation, other than costs directly related to energy prices, such as fuel, plastic bags and electricity. If we experience high inflation in these costs in the future, or inflationary pressures have significant effects on other cost categories, we may not be able to pass on all of these higher costs to our customers in the short term. We do believe that we will be able to pass on higher costs to our customers over longer periods of time; however there can be no assurance that we will be successful in such efforts.

The ice business is highly seasonal, with the bulk of demand coming in the warmer spring and summer months. Accordingly, we experience seasonal fluctuations in our net sales and profitability. We make a disproportionate amount of our sales in the second and third calendar quarters. We also typically earn any net income in these same periods, whereas we typically experience net losses in the first and fourth calendar quarters. We believe that approximately two-thirds of our revenues will occur during the second and third calendar quarters when the weather conditions are generally warmer and demand is greater, while approximately one-third of our revenues will occur during the first and fourth calendar quarters when the weather is generally cooler. This belief is consistent with historical trends. As a result of seasonal revenue declines and the lack of proportional corresponding expense decreases, we will most likely experience lower profit margins and losses during the first and fourth calendar quarters. In addition, because our operating results depend significantly on sales during our peak season, our quarterly results of operations may fluctuate significantly as a result of adverse weather during this peak selling period if the weather is unusually cool or rainy on a more national or regional basis.

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Item 3. Quantitative and Qualitative Disclosures About Market Risks

Market risk generally represents the risk that losses may occur in the value of financial instruments as a result of movements in interest rates, foreign currency exchange rates and commodity prices. Our main market risk categories are fuel prices and interest rate risk.

We are exposed to market risk due to fluctuations in the prices of fuel. From time to time we enter into hedging contracts to stabilize prices expected to be paid for diesel fuel used in our operations. These contracts are for quantities equal to or less than quantities expected to be consumed in our operations. As of ~~September~~March 3031, ~~2011~~2012, we had ~~two~~one diesel fuel ~~contracts~~contract ~~that~~maturing at ~~mature~~various indates through December ~~2011~~2012 ~~and~~with ~~2012~~a ~~which~~fair ~~are~~value ~~recorded~~as inan ~~Cost~~asset of ~~Goods~~$0.1 million. ~~Sold~~Net ~~and~~of ~~Other~~effect ~~Assets~~of atthis ~~their~~contract, ~~fair~~a ~~value~~10% change in fuel prices would impact our results of operations by $1.8 million on an annual basis, absent any other contravening actions.

51 Our results of operations can be affected by changes in interest rates due to variable rates of interest on our revolving credit facilities. As of March 31, 2012, $50.0 million was outstanding under our revolving credit facility. A 1% increase in interest rates would have an impact of $0.5 million our results of operations.

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approximately $0.2 million. The impact of a 10% change in fuel prices not covered under these contracts would result in a $1.0 million change in our results of operations on an annual basis, absent any other contravening actions.

Our results of operations can be affected by changes in interest rates due to variable rates of interest on our revolving credit facilities. As of September 30, 2011, $14.5 million was outstanding under our revolving credit facility. A 1% increase in interest rates would have an insignificant impact on our results of operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures. We conducted an evaluation of the effectiveness of our "disclosure controls and procedures" ("Disclosure Controls"), as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of ~~September~~March 3031, ~~2011~~2012, the end of the period covered by this Quarterly Report on Form 10-Q ("Quarterly Report"). The Disclosure Controls evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, and as a result of the material weakness in internal control over financial reporting disclosed by the Company in its ~~2010~~2011 annual report on Form 10-K ("Annual Report"), and as described below, our CEO and CFO have concluded that our Disclosure Controls were not effective at a reasonable assurance level as of ~~September~~ March 3031, ~~2011~~2012.

~~At December 31~~Management, ~~2010, management,~~ including our CEO and our CFO, assessed the effectiveness of our internal control over financial reporting ~~using~~as of December 31, 2011. In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal Control—Integrated Framework. A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Based on this assessment using the COSO criteria, management concluded that, as of December 31, 2011, our internal control over financial reporting was not effective because of the material weakness identified and previously disclosed in our 2010 Annual Report which was not remediated as of December 31, 2011. The material weakness relates to our accounting for ice merchandiser equipment and other equipment and machinery. Specifically, we did not maintain effective controls, including monitoring with respect to the accuracy, valuation, completeness, and existence of ice merchandiser equipment and other equipment and machinery.

ANotwithstanding the existence of the material weakness isdescribed ~~a deficiency~~above, orwe ~~combination~~performed ofadditional ~~deficiencies,~~analyses inand ~~internal~~other ~~control~~procedures ~~over~~to ensure that the condensed consolidated financial statements ~~reporting~~in ~~such~~this ~~that~~Form 10-Q ~~there~~were isprepared ain ~~reasonable~~accordance ~~possibility~~with ~~that~~generally aaccepted ~~material~~accounting ~~misstatement~~principles ("GAAP"). These additional procedures included, among other things, extensive reconciliation of ~~the~~our ~~Company's~~fixed ~~annual~~asset orrecords ~~interim~~and ~~financial~~our ~~statements~~general ~~will~~ledger, ~~not~~conversion beof ~~prevented~~our orfixed ~~detected~~asset onrecords to a ~~timely~~new ~~basis.~~fixed asset system,

Based on this assessment, management identified a material weakness related to our accounting for ice merchandiser equipment, as identified and disclosed in our 2010 Annual Report. Specifically, we did not maintain effective controls, including monitoring with respect to the accuracy, valuation, completeness, and existence of ice merchandiser equipment. 59

Notwithstanding the existence of the material weakness described above, we performed additional analyses and other procedures to ensure that the condensed consolidated financial statements in this Form 10-Q were prepared in accordance with generally accepted accounting principles ("GAAP"). These additional procedures included, among other things, expansion of our physical inventory procedures and dedication of significant internal resources to review our ice merchandiser and other plant and equipment balances at a detailed level.

As a result of the additional analyses and other procedures performed as described above, the Company identified additional errors in its accounting for equipment and machinery balances. We have determined that these errors are an additional effect of the material weakness identified at December 31, 2010. Specifically, we did not maintain effective controls, including monitoring with respect to the accuracy, valuation, completeness, and existence of ice merchandiser equipment and other equipment and machinery.

Although we have made substantial progress in our remediation efforts, we have not yet remediated the material weakness described above and cannot conclude when we will have remediated

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~~this~~processing ~~material~~of ~~weakness.~~all ~~Until~~2012 ~~remediated~~first quarter activity within both the new and old fixed asset systems, ~~this~~which ~~deficiency~~we ~~could~~have ~~result~~maintained in aparallel ~~material~~to ~~misstatement~~ensure of the ~~related~~new ~~accounts~~system produces accurate and ~~disclosures~~reliable ~~contained~~results, inand operational implementation and training related to the ~~consolidated~~procedures ~~financial~~designed ~~statements~~to ~~that~~accompany ~~would~~the implementation of the new system. We have also continued focused detailed reviews and roll forward ~~not~~procedures befor ~~prevented~~our orice ~~detected~~merchandiser onand aother ~~timely~~plant ~~basis~~and equipment balances.

~~Plan~~Although we ~~for~~have ~~Remediation~~made ofsubstantial ~~Material~~progress ~~Weakness. We~~in ~~have~~our ~~made~~remediation efforts, the systems and ~~will~~procedures ~~continue~~implemented toare ~~make~~new ~~improvements~~and towe ~~our~~are ~~internal~~continuing ~~control~~to ~~over financial~~evaluate ~~reporting,~~their ~~and~~implementation. At ~~management~~March 31, ~~with~~2012 ~~oversight~~we ~~from~~have ~~our~~not ~~Audit~~yet ~~Committee,~~remediated ~~has~~the ~~identified~~material ~~and~~weakness ~~intends~~described toabove. ~~execute~~We ~~the~~expect ~~following~~to ~~actions~~complete ~~that~~our weremediation ~~believe~~of ~~will~~this ~~remediate the~~ material weakness ~~described~~during ~~above~~2012. ~~Specifically~~Until remediated, this deficiency ~~with~~could ~~regard~~result toin ~~the~~a ~~accounting~~material ~~for~~misstatement ~~ice~~of ~~merchandiser~~the ~~and~~related ~~plant~~accounts and ~~equipment~~disclosures ~~assets,~~contained ~~management~~in ~~intends~~the ~~to:~~consolidated financial statements that would not be prevented or detected on a timely basis.

~~Subsequent to~~ Plan ~~filing~~for ~~its~~Remediation ~~2010 Annual Report on March 31, 2011, the Company has initiated a redesign~~ of ~~its~~Material ~~fixed asset processes and procedures as well as the implementation of a new fixed asset system~~Weakness. We ~~The~~have ~~Company has~~ made ~~significant progress in its remediation efforts during the second~~ and ~~third~~will ~~quarters.~~continue ~~Key~~to ~~milestones~~make ~~achieved~~improvements ~~in the second quarter included the selection of a new fixed asset system, the re-design of certain policies and procedures~~ to ~~ensure~~our ~~adequate~~ internal ~~controls~~control over financial ~~fixed assets are maintained~~reporting, and ~~the design and test of the 2011~~ ~~fixed~~management, ~~asset~~with ~~inventory~~oversight ~~and~~from ~~tagging~~our ~~procedures.~~Audit ~~During the third quarter the Company initiated the physical implementation of the selected fixed asset system~~Committee, ~~the~~has ~~training~~identified ~~of employees on new~~ and ~~revised~~ ~~policies~~is ~~and~~executing ~~procedures,~~ the ~~tagging~~ offollowing ~~the~~actions ~~Company's~~that ~~fixed~~we ~~assets~~believe ~~with~~will ~~tags~~remediate ~~readable via a handheld barcode scanner, and execution of~~ the ~~2011~~material ~~physical~~weakness ~~fixed~~described ~~asset inventory~~above. ~~The newly re-designed procedures will be~~Specifically, ~~adopted~~management inestablished ~~conjunction~~a plan with ~~the~~regard ~~final~~to ~~implementation of~~ the ~~selected~~accounting ~~fixed~~for ~~asset~~ice ~~system~~merchandiser and ~~execution~~plant ~~of the Company's tagging~~ and ~~physical~~equipment ~~inventory~~assets, ~~activities~~intended ~~will continue until fully complete. The Company anticipates completing these remediation activities in 2011.~~ to:

•: Establish increased operational ownership and accountability for our ice merchandiser, plant, and equipment assets;
•: Upgrade the fixed asset system and related procedures to provide a more accurate and automated means of managing our fixed assets, including our ice merchandiser, plant, and equipment assets, with specific focus on processes and controls governing the tracking and timely disposition and inventory of fixed assets; and
•: Redesign and enhance inventory control procedures over our fixed assets including increased education, training, support and oversight of our employees tasked with the completion of inventory procedures.

Subsequent to filing our 2010 Annual Report on March 31, 2011, we initiated a redesign of our fixed asset processes and procedures as well as the implementation of a new fixed asset system. We have made significant progress in our remediation efforts. Key milestones achieved in 2011 include the selection of a new fixed asset system, the re-design of certain policies and procedures to ensure adequate internal controls over fixed assets are maintained and the performance of redesigned 2011 fixed asset inventory and tagging procedures. We completed the tagging of our fixed assets with tags readable via a handheld barcode scanner, in connection with the 2011 physical fixed asset inventory. We further initiated the physical implementation of the selected fixed asset system, and the training of our employees on the new and revised policies and procedures. During the first quarter 2012 we converted our existing fixed asset records to the new fixed asset system and processed all our first quarter 2012 activity within both the new and old fixed asset systems, which we have maintained in parallel to ensure the new system produces accurate and reliable results. In addition we have initiated operational implementation and training related to the procedures designed to accompany the implementation of the new system. The systems and procedures implemented are new and we are continuing to evaluate their implementation. At March 31, 2012 we have not fully completed our remediation plans and thus concluded that the material weakness was not remediated as of that date. We anticipate completing our remediation of this material weakness during 2012.

The foregoing notwithstanding, we continue to evaluate the appropriate remediation measures required in order to address the above-described material weakness and further progress relative to our remediation measures will be disclosed in our subsequent Exchange Act reports.

Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial ~~reporting~~ reporting during the quarter ended ~~September~~March 3031, ~~2011~~2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The following is a discussion of the Company's significant legal matters. The Company is involved in various claims, suits, investigations, and legal proceedings. The Company accrues a liability when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. At September 30, 2011 and December 31, 2010, no accruals had been made in connection with the matters discussed below.

Antitrust Matters

In March 2008, the Company and certain of its employees, including members of its management, received subpoenas issued by a federal grand jury sitting in the Eastern District of Michigan seeking documents and information in connection with an investigation by the Antitrust Division of the United States Department of Justice ("DOJ") into possible antitrust violations in the packaged ice industry. In addition, on March 5, 2008, federal officials executed a search warrant at the Company's corporate office in Dallas, Texas. Current and former employees were also subpoenaed to testify and testified before a federal grand jury in the Eastern District of Michigan and before a federal grand jury in the Southern District of Ohio. On October 29, 2010, the Company was informed that the Antitrust Division of the DOJ would take no action against the Company or any of its employees in connection with its investigation of the packaged ice industry. In January 2011, counsel for the Company confirmed that the Antitrust Division of the DOJ ~~has~~had formally closed its investigation of the packaged ice industry.

In March 2008, June 2008, and June 2009, the Company was served with antitrust civil investigative demands ("CIDs") by the Offices of the Attorneys General of the States of Florida, Arizona and Michigan, respectively, requesting the production of documents and information relating to an investigation of agreements in restraint of trade and/or price fixing with respect to the market for packaged ice. The Company ~~has~~was ~~been~~ advised that ~~these~~those CIDs ~~are~~were related to a multi-state antitrust investigation of the packaged ice industry. The Company ishas ~~cooperating~~cooperated with the ~~investigation~~ investigation and has complied with all requests for documents and information regarding these matters. The Company may in the future receive additional civil investigative demands or similar information requests from states participating in the multi-state investigation or conducting their own investigations. However, it has been several months since the Company had any communication with the representatives of the states regarding this investigation.

At this time, the Company is unable to predict the outcome of that investigation, the possible loss or possible range of loss, if any, associated with the resolution of that investigation or any potential effect the investigation may have on the Company, its employees or operations.

Beginning in 2008 a number of lawsuits, including putative class action lawsuits, were filed against the Company, Reddy Ice Corporation, Home City Ice Company, Arctic Glacier Income Fund, Arctic Glacier, Inc. and Arctic Glacier International, Inc., in various federal and state courts in multiple jurisdictions alleging violations of federal and state antitrust laws and related claims and seeking damages and injunctive relief. One of the state court cases filed against the Company was dismissed. Pursuant to an Order from the Judicial Panel on Multidistrict Litigation, the other civil actions have been transferred and consolidated for pretrial proceedings in the United States District Court for the Eastern District of Michigan. (the "District Court"). Home City entered into a settlement agreement with the direct purchaser plaintiffs that was approved by the Court on February 22, 2011. On March 30, 2011, Arctic Glacier announced that it had entered into a proposed settlement agreement with the direct purchaser plaintiffs. ~~Preliminary~~That ~~approval~~settlement ofwas ~~that~~approved ~~settlement~~by ~~was~~the ~~granted~~Court on ~~July~~December 2013, 2011,. ~~and~~These putative class actions in the District Court are currently stayed as to the Company as a ~~final~~result ~~fairness~~of ~~hearing~~the ~~was~~filing ~~held~~of ~~on October 28,~~the ~~2011~~Bankruptcy Cases. The ~~Court~~Company has ~~taken~~reached ~~the~~a ~~motion~~settlement ~~for~~agreement ~~final~~in ~~approval~~principal ~~under~~with ~~advisement.~~the direct ~~Discovery~~purchaser isplaintiffs ~~ongoing~~in ~~regarding~~ the ~~claims~~Bankruptcy ~~asserted~~Cases. onThat ~~behalf~~settlement ofprovides ~~direct~~for ~~purchasers~~a ~~against~~payment ~~the~~of ~~Company~~$0.75 ~~On March 11,~~million ~~2011,~~upon consummation of the ~~Court~~settlement ~~entered~~and an ~~Order~~additional ~~granting~~$0.25 million inif ~~part~~the ~~and~~sale ~~denying~~with Arctic Glacier closes, all in ~~part~~return ~~motions~~for torelease ~~dismiss~~of the ~~indirect~~Company ~~purchaser~~and ~~claims.~~dismissal Onof ~~May 25,~~all ~~2011,~~claims against the ~~indirect~~Company ~~purchaser~~with ~~plaintiffs~~prejudice. ~~filed a~~The ~~Consolidated~~agreement ~~Class~~is ~~Action~~subject ~~Complaint~~to ~~asserting~~the ~~violations~~execution of ~~the~~final ~~antitrust~~settlement ~~laws~~documents and ofBankruptcy ~~various~~Court ~~states~~approval.

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~~and~~ On May 25, 2011, the indirect purchaser plaintiffs filed a Consolidated Class Action Complaint asserting violations of the antitrust laws of various states and related claims. The Company and the other defendants filed motions to dismiss the Consolidated Class Action Complaint. Those motions were heard on October 28, 2011, and ~~were~~the ~~taken~~Court ~~under~~granted in part and denied in part ~~advisement~~the bymotions to dismiss on December 12, 2011. The Company filed an answer to the remaining claims on December 27, 2011. Home City entered into a proposed settlement agreement with the indirect purchaser plaintiffs on or about March 7, 2012. That settlement is subject to court approval. The Company has also entered into a proposed settlement agreement with the indirect purchaser plaintiffs in the Bankruptcy Cases. That settlement provides for a payment of $0.7 million in return for release of the Company and dismissal of all claims against the Company with prejudice. The agreement further provides for release of claims asserted in a putative class action filed against certain current and former officers and directors of the Company and for dismissal of that case with prejudice. The agreement is subject to the execution of final settlement documents and Bankruptcy Court approval. This case is stayed as to the Company as a result of the filing of the Bankruptcy Cases. The Bankruptcy Court granted preliminary approval of the settlement agreement on May 11, 2012.

On March 1, 2010, a putative class action Statement of Claim was filed against the Company in the Ontario Superior Court of Justice in Canada alleging violations of Part VI of the Competition Act and seeking general damages, punitive and exemplary damages, pre-judgment and post-judgment interest, and costs. On March 8, 2010, a putative class action Statement of Claim was filed against the Company in the Court of Queen's Bench of Alberta, Judicial District of Calgary, in Canada, alleging violations of Part VI of the Competition Act and seeking general damages, special and pecuniary damages, punitive and exemplary damages, interest and costs.

AnPrior to the filing of the Company's Bankruptcy Cases, an agreement ~~has~~had been reached to resolve the class actions filed in Canada against Reddy Ice and Arctic Glacier, Inc. The agreement provides that Arctic Glacier will pay CDN $2.0 million,~~000,000,~~ all claims asserted against Reddy Ice and Arctic Glacier in both Ontario and Alberta will be dismissed, and Reddy Ice and Arctic Glacier will be granted full and final releases with regard to those claims. Reddy Ice is not making any payment in connection with this settlement. The agreement is subject to the execution of final settlement documents and court approval. The Company is unable to predict what, if any, effect the filing of bankruptcy by Arctic Glacier may have on this settlement. The Company believes those class actions are stayed as to the Company as a result of the filing of the Bankruptcy Cases.

One direct action lawsuit was filed against us in the United States District Court for the Eastern District of Michigan asserting claims based on alleged violations of federal and state antitrust laws, RICO and tortious interference and seeking damages, civil penalties and injunctive relief. The defendants filed motions to dismiss that case. On May 29, 2009, the Court dismissed all claims against us in that lawsuit. On June 29, 2009, the plaintiff filed a motion for reconsideration, and on July 17, 2009 the Court reversed, in part, its May 29, 2009 order, reinstating only the RICO claim against us. The dismissal of the remaining claims was not affected. On August 10, 2009, the Company filed an answer to the reinstated claim. That ~~Discovery~~case is ~~ongoing~~stayed inas ~~that~~to ~~matter~~the Company as a result of the filing of the Bankruptcy Cases.

On April 20, 2011, an Order was entered unsealing a Qui Tam complaint filed on June 25, 2008, by Martin McNulty, on behalf of the United States, against Reddy Ice Holdings, Inc., Reddy Ice Corporation, Arctic Glacier Income Fund, Arctic Glacier, Inc., Arctic Glacier International, Inc., and Home City Ice Company, Inc. The complaint ~~alleges~~alleged violations of the federal False Claims Act by presentation of false claims, making or using a false record or statement, and conspiracy to defraud, and ~~seeks~~sought damages, civil penalties, ~~attorney~~ attorney fees and costs. The Government ~~has~~ elected not to intervene in that case and the Company and the other defendants ~~have~~ filed motions to dismiss that complaint. Those motions ~~are~~were ~~set~~granted, ~~for~~the complaint ~~hearing~~was dismissed, and a final judgment was entered in favor of the defendants on ~~November~~ December 167, 2011.

The Company intends to vigorously defend the pending lawsuits. At this time, the Company is unable to predict the outcome of these lawsuits, the possible loss or possible range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations. 62

Stockholder Litigation

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~~Two~~The ~~stockholder~~Company ~~derivative~~intends ~~actions~~to ~~have~~vigorously ~~been~~defend ~~filed~~all onpending ~~the~~lawsuits ~~Company's~~and ~~behalf~~related inclaims ~~state district court~~ in ~~Dallas~~the ~~County,~~Bankruptcy ~~Texas~~Cases, ~~naming~~except as ~~defendants,~~otherwise ~~among~~settled ~~others,~~or ~~certain~~resolved ~~current~~as ~~and~~described ~~former officers~~above. ~~and~~At ~~members~~this oftime, the Company's ~~Board~~is ofunable ~~Directors.~~to ~~Those~~predict ~~cases have been consolidated in~~ the ~~68th Judicial~~outcome ~~District Court~~ of ~~Dallas County, Texas. On August 1, 2011,~~ the ~~Court granted~~above innon-settled ~~part~~lawsuits ~~and denied~~ in ~~part~~light ~~Special~~of ~~Exceptions filed by~~ the ~~defendants~~Bankruptcy Cases. The Company ~~filed~~has aaccrued ~~petition with the Court of Appeals seeking a writ of mandamus relating to the denial of certain Special Exceptions~~$1. ~~On September~~5 1,million ~~2011, a Third Amended Consolidated Shareholder Derivative Petition was filed~~ in ~~that~~its ~~matter.~~financial ~~That~~statements ~~Third Amended Petition asserts claims for breach of~~in ~~fiduciary~~respect ~~duty, unjust enrichment, abuse~~ of ~~control, and gross mismanagement and seeks damages, equitable relief, attorney fees, expenses and costs. On October 10, 2011,~~ the ~~petition~~amounts ~~for a writ~~ of ~~mandamus was conditionally granted by~~ the ~~Court~~potential ~~of Appeals~~settlements ~~and~~described ~~the~~above ~~trial~~as ~~court was ordered to grant the Special Exception relating to demand futility. The plaintiffs filed a Motion for Rehearing, which was denied on November 7, 2011. The trial~~ of ~~that case is currently set for~~ March 2031, 2012.

~~The Company~~ ~~intends~~Stockholder to vigorously defend the pending lawsuits. At this time, the Company is unable to predict the outcome of these lawsuits, the possible loss or possible range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations. Litigation

Beginning on August 8, 2008, putative class action complaints were filed in the United States District Court for the Eastern District of Michigan asserting claims under the federal securities laws against the Company and certain of its current or former senior officers. On July 17, 2009, the Court consolidated the actions and appointed a lead plaintiff and interim lead plaintiff's counsel. The lead plaintiff filed a consolidated amended complaint on November 2, 2009. That complaint purports to assert claims on behalf of an alleged class of purchasers of the Company's common stock and alleges that the defendants misrepresented and failed to disclose the existence of, and the Company's alleged participation in, an alleged antitrust conspiracy in the packaged ice industry. On April 4, 2012, a tentative settlement agreement was reached with the Plaintiffs pursuant to which the Company will pay $1.0 million in exchange for full and final releases of all claims asserted against the Company and the individual defendants. That agreement is subject to the execution of final settlement documents and Bankruptcy Court approval. On April 18, 2012, an order was entered by the United States District Court for the Eastern District of Michigan transferring the stockholder litigation to the United States District Court for the Northern District of Texas. The United States District Court for the Northern District of Texas subsequently referenced the case to the Bankruptcy Court.

Other Matters

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and OTCQB beginning Thursday, December 29, 2011. Trading of the Company's common stock on the NYSE and the Company's trading symbol "FRZ" was discontinued as of the close of the market on December 28, 2011. Effective Thursday, December 29, 2011, the Company's stock was quoted on the OTCBB and OTCQB under the symbol "RDDY". As a result of the Company's bankruptcy filing, on April 12, 2012 the Company's symbol was changed to "RDDYQ".

Item 1A. Risk Factors

There have been no material changes to the factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2010, except as listed below~~2011.

Our common stock could be delisted from the New York Stock Exchange.

The continued listing standards of the New York Stock Exchange ("NYSE") require the Company to maintain, among other things, a market capitalization or stockholders equity above a specified threshold. As a result of the decline in the Company's stock price and the reduction in its stockholders' equity resulting from our decline in earnings, the Company was notified by the NYSE in September that it is not in compliance with the NYSE continued listing standards. On November 7th, 2011, the Company filed a plan with the NYSE to achieve compliance with the continued listing standards within 18 months. If the plan is accepted by the NYSE, the NYSE will monitor the Company's performance under the plan on a quarterly basis. To the extent (i) the NYSE does not accept the Company's plan, (ii) the Company cannot meet the applicable standards within the 18 month period if its plan is accepted, or (iii) the NYSE determines the Company is not satisfying its obligations under the plan to achieve compliance, the Company's stock could be delisted from NYSE. A delisting of the Company's common stock could materially and adversely affect, among other things, the liquidity and market price of the Company's common stock; the number of investors willing to hold or acquire the Company's common stock; and the Company's access to capital markets to raise capital in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

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Item 3. Defaults Upon Senior Securities

The Bankruptcy filing constituted an event of default under the terms of the Pre-Petition Credit Facility and under the indentures governing the First Lien Notes, the Second Lien Notes and the Discount Notes.

Item 4. Mine Safety Disclosures

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.

Item 6. Exhibits

See Index to Exhibits on page 5952.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	REDDY ICE HOLDINGS, INC.
Date: November 10, 2011	By:	/s/ GILBERT M. CASSAGNE Gilbert M. Cassagne Chief Executive Officer
Date: May 14, 2012	By:	/s/ GILBERT M. CASSAGNE Gilbert M. Cassagne Chief Executive Officer
Date: November 10, 2011	By:	/s/ STEVEN J. JANUSEK Steven J. Janusek Chief Financial and Accounting Officer
Date: May 14, 2012	By:	/s/ STEVEN J. JANUSEK Steven J. Janusek Chief Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	REDDY ICE CORPORATION
Date: November 10, 2011	By:	/s/ GILBERT M. CASSAGNE Gilbert M. Cassagne Chief Executive Officer
Date: May 14, 2012	By:	/s/ GILBERT M. CASSAGNE Gilbert M. Cassagne Chief Executive Officer
Date: November 10, 2011	By:	/s/ STEVEN J. JANUSEK Steven J. Janusek Chief Financial and Accounting Officer
Date: May 14, 2012	By:	/s/ STEVEN J. JANUSEK Steven J. Janusek Chief Financial and Accounting Officer

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INDEX TO EXHIBITS

		Description
31.1†		Rules 13a-14(a) and 15d-14(a) Certification of Chief Executive Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1	†	Rules 13a-14(a) and 15d-14(a) Certification of Chief Executive Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2†		Rules 13a-14(a) and 15d-14(a) Certification of Chief Financial Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	†	Rules 13a-14(a) and 15d-14(a) Certification of Chief Financial Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†		Section 1350 Certification of Chief Executive Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1	†	Section 1350 Certification of Chief Executive Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Section 1350 Certification of Chief Financial Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	†	Section 1350 Certification of Chief Financial Officer of Reddy Ice Holdings, Inc. and Reddy Ice Corporation, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101†		The following financial information from the Company's Quarterly Report on Form 10-Q, for the period ended September 30, 2011, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Stockholder's Deficit, (iv) Condensed Consolidated Statements of Cash Flow, (v) Reddy Ice Corporation Condensed Balance Sheet, (vi) Reddy Ice Corporation Statements of Operations, (vii) Reddy Ice Corporation Statement of Stockholder's Equity, (viii) Reddy Ice Corporation Statements of Cash Flows, (ix) Notes to condensed consolidated and Reddy Ice Corporation condensed financial statements.
101	†	The following financial information from the Company's Quarterly Report on Form 10-Q, for the period ended March 31, 2012, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Stockholder's Deficit, (iv) Condensed Consolidated Statements of Cash Flow, (v) Reddy Ice Corporation Condensed Balance Sheet, (vi) Reddy Ice Corporation Statements of Operations, (vii) Reddy Ice Corporation Statement of Stockholder's Equity, (viii) Reddy Ice Corporation Statements of Cash Flows, (ix) Notes to condensed consolidated and Reddy Ice Corporation condensed financial statements.

†: Filed herewith.

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Filing Compare · REDDY ICE CORP