ACQUISITIONS

12 Months Ended

Dec. 31, 2011

ACQUISITIONS

ACQUISITIONS

3. ACQUISITIONS

        During 2011, 2010 and 2009, the Company purchased nine, sixteen and one ice companies, respectively, in connection with its program of acquiring ice businesses in existing or adjacent geographic markets. 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. The following table summarizes the aggregate purchase prices, aggregate fair values of the assets acquired and the liabilities assumed, direct acquisition costs expensed and gains recognized on bargain purchases:

	Year Ended December 31,
	2011		2010			2009
	(in millions)
Purchase price	$	13.3	$	19.2		$	1.0
Assets acquired:
Cash, accounts receivable and inventory	$	0.9	$	0.8		$	0.1
Property and equipment		3.7		5.0			1.2
Other intangible assets		6.1		9.7			0.4
Total assets acquired		10.7		15.5			1.7
Total liabilities assumed:
Accounts payable and other accrued liabilities		0.5		—			—
Deferred income taxes		0.9		—			—
Total liabilities assumed		1.4		—			—
Gain on bargain purchase		—		(0.2	)		(0.7	)
Excess purchase price allocated to goodwill	$	4.0	$	3.9		$	—
Direct acquisition costs expensed	$	4.6	$	1.2		$	0.1

        The Company recorded approximately $12.2 million of revenue from the acquired businesses during the twelve months ended December 31, 2011. $4.2 million of acquisition costs recognized in 2011 were incurred in connection with the Company's evaluation of a strategic merger opportunity within the packaged ice industry.

        The Company recorded approximately $0.9 million of deferred tax liabilities in connection with the 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 during the six months ended June 30, 2011. The earn-out agreement is recorded at its fair value of $0.1 million at December 31, 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. The change in fair value of the contingent liability is presented as "Gain on contingent acquisition consideration" in the consolidated statements of operations.

        The Company recorded $1.9 million of tax deductible goodwill recognized in connection with the acquisitions completed during the year ended December 31, 2011. 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 credit facility.

        The following unaudited pro forma information presents Reddy Holdings' consolidated results of operations for the twelve months ended December 31, 2011 and 2010 as if the 2011 and 2010 acquisitions had all occurred on January 1, 2010:

	December 31,
	2011			2010
	(in thousands, except per share amounts)
Pro forma revenues	$	329,726		$	337,696
Pro forma net loss	$	(70,079	)	$	(37,716	)
Pro forma basic net loss per share	$	(3.08	)	$	(1.68	)
Pro forma diluted net loss per share	$	(3.08	)	$	(1.68	)

        The following unaudited pro forma information presents Reddy Corp's consolidated results of operations for the twelve months ended December 31, 2011 and 2010 as if the 2011 and 2010 acquisitions had all occurred on January 1, 2010:

	December 31,
	2011			2010
	(in thousands, except per share amounts)
Pro forma revenues	$	329,726		$	337,696
Pro forma net loss	$	(41,639	)	$	(29,728	)