Reddy Ice (Illustrative ONLY) Simplified LBO Model

$ in millions
Uses Sources Credit Statistics
Lev. Mult. Interest
$ Amount Year1 Year2 Year3 Year4
Acq. Price (1) 7.9x $500 Debt 3.0x 9.0% $189 Debt / EBITDA 2.5x 1.9x 1.4x 0.8x
Debt Fees 2.25% 4 Equity 316 EBITDA / Interest 4.2x 5.2x 6.9x 10.3x
% Paydown 14% 29% 46% 66%
Total Uses $504 Total Sources $504
Year 5 IRR Calc Year 5 Assumptions
Entry 12/31/07 ($316) EBITDA $81 Case Trigger 1
Exit 12/31/12 $622 Exit Multiple 8.0x Case: Base Case
IRR 14.5% Net Debt $24
ROIC 2.0x
Historical Financials Projected Financials
Year1 Year2 Year3 Year4 Year5 Year6
12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13
Revenue $160 $165 $168 $175 $180 $185 $191 $196 $202 $208 $215
% growth 3% 2% 4% 3% 3% 3% 3% 3% 3% 3%
Gross Profit $80 $79 $87 $86 $90 $93 $97 $101 $105 $109 $114
% of Revenue 50% 48% 52% 49% 50% 51% 51% 52% 52% 53% 53%
EBITDA $46 $50 $57 $56 $63 $66 $70 $73 $77 $81 $85
% of Revenue 29% 30% 34% 32% 35% 36% 37% 37% 38% 39% 40%
Less:
Interest Expense (16) (13) (11) (7) (4) (1)
Taxes 40% *(EBITDA minus Interest) assumes no D&A for simplification (20) (22) (25) (28) (31) (33)
Increase in NWC (3) (3) (3) (3) (3) (3)
Capex (1) (1) (1) (2) (2) (2) (2) (2) (2) (2) (2)
Free Cash Flow Available for Debt $26 $29 $33 $37 $41 $45
Less: Debt Repayment Opening ($26) ($29) ($33) ($37) ($41) ($24)
Ending Debt Balance Exit Multiple $189 $163 $134 $102 $65 $24 $0

file:///conversion/tmp/scratch/47168907.xls LBO Model 12/08/2021 02:45:32 LBO Model

Active Case 1

12/31/07 12/31/08 12/31/09 12/31/10 12/31/11

Revenue (Active Case) $180 $185 $191 $196 $202
Base Case $180 $185 $191 $196 $202
Downside Case $180 $135 $135 $135 $135

% Gross Profit Margin (Active Case) 50.0% 50.5% 51.0% 51.5% 52.0%
Base Case 50.0% 50.5% 51.0% 51.5% 52.0%
Downside Case 50.0% 50.0% 50.0% 50.0% 50.0%

% EBITDA Margin (Active Case) 35.0% 35.8% 36.5% 37.3% 38.0%

Base Case 35.0% 35.8% 36.5% 37.3% 38.0%
Downside Case 35.0% 35.0% 35.0% 35.0% 35.0%
12/31/12 12/31/13 12/31/14
$208 $215 $221
$208 $215 $221
$135 $135 $135

52.5% 53.0% 53.5%

52.5% 53.0% 53.5%
50.0% 50.0% 50.0%

38.8% 39.5% 40.3%

38.8% 39.5% 40.3%
35.0% 35.0% 35.0%