10 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Stockholders and the Board of Directors
−Removed: Bright Horizons Family Solutions Inc.
−Removed: Newton, Massachusetts
+Added: To the stockholders and the Board of Directors of Bright Horizons Family Solutions Inc.
Opinion on the Financial Statements
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Critical Audit Matter Description
−Removed: The Company provides center-based early education and child care, back-up child and adult/elder care, tuition assistance and student loan repayment program management, educational advisory services, and other support services for employers and families.
−Removed: The Company generates revenue from services based on the consideration specified in contracts with customers, which primarily consist of employer sponsors and parents.
−Removed: The Company recognizes revenue when a performance obligation is satisfied by transferring control of the promised services to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services.
−Removed: A performance obligation is a promise in a contract to transfer a distinct service to the customer.
+Added: The Company provides center-based early education and child care, back-up care, and educational advisory and other services to customers, which primarily consist of employer sponsors and parents.
+Added: The Company generates revenue from services based on the nature of the promise and the consideration specified in contracts with customers.
+Added: At contract inception, the Company assesses the services promised in the contract and identifies each distinct performance obligation.
+Added: The transaction price of a contract is allocated to each distinct performance obligation using the relative stand-alone selling price and recognized as revenue when, or as, control of the service is passed to the customer.
Revenue is primarily recognized over time as control of the service is transferred to the customer.
−Removed: Given the Company’s disparate services require recording a significant volume of transactions in multiple systems, performing audit procedures to test revenue required a high degree of auditor judgment and an increased extent of effort.
+Added: We identified revenue as a critical audit matter because of the number of disparate services offered by the Company and the significant volume of revenue contracts and transactions.
+Added: This requires extensive audit effort due to the volume of contracts and transactions and requires a high degree of auditor judgment when performing audit procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to revenue included the following, among others:
+Added: • We tested the effectiveness of controls over the recognition of revenue.
• We evaluated the Company’s accounting policies for compliance with the applicable revenue recognition accounting guidance.
• We performed analytical procedures to test the reasonableness of recorded balances.
−Removed: • We performed procedures to test the transactions were recorded in the appropriate accounting period.
• We selected a sample of transactions within each significant revenue stream and performed the following:
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◦ Tested the amounts recognized to source documents and tested the mathematical accuracy of the recorded revenue.
+Added: ◦ Performed procedures to test the transactions were recorded in the appropriate accounting period.
/s/ Deloitte & Touche LLP
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Income before income tax 119,632 112,182 90,348
−Removed: Income tax benefit (expense) ( 31,541 ) ( 19,889 ) 11,340
+Added: Income tax expense ( 45,409 ) ( 31,541 ) ( 19,889 )
Net income $ 74,223 $ 80,641 $ 70,459
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Balance at January 1, 2021 60,466,168 $ 60 $ 910,304 $ — $ ( 27,069 ) $ 400,502 $ 1,283,797
−Removed: Issuance of common stock 2,138,580 2 249,788 249,790
Stock-based compensation expense 23,060 23,060
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Retirement of treasury stock ( 1,639,752 ) ( 2 ) ( 214,056 ) 214,058 —
−Removed: Other comprehensive income 23,262 23,262
+Added: Other comprehensive loss ( 10,290 ) ( 10,290 )
Net income 70,459 70,459
11 unchanged sentences
Shares received in net share settlement of stock option exercises and vesting of restricted stock ( 33,462 ) — ( 2,592 ) ( 2,592 )
−Removed: Purchase of treasury stock ( 182,342 ) ( 182,342 )
−Removed: Retirement of treasury stock ( 1,986,146 ) ( 2 ) ( 182,340 ) 182,342 —
−Removed: Other comprehensive loss ( 33,270 ) ( 33,270 )
+Added: Other comprehensive income 11,528 11,528
Net income 74,223 74,223
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Proceeds from the disposal of fixed assets 225 10,547 5,829
−Removed: Purchases of debt securities and other investments ( 25,106 ) ( 29,912 ) ( 25,705 )
Proceeds from the maturity of debt securities and sale of other investments 19,538 23,392 24,080
+Added: Purchases of debt securities and other investments ( 16,050 ) ( 25,106 ) ( 29,912 )
Payments and settlements for acquisitions — net of cash acquired ( 39,629 ) ( 210,409 ) ( 53,895 )
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Borrowings of long-term debt, net of issuance costs of $ 7.7 million
−Removed: Proceeds from stock issuance — net of issuance costs — — 249,790
Borrowings under revolving credit facility 402,500 295,000 —
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Payments of deferred and contingent consideration for acquisitions ( 225 ) ( 13,865 ) ( 594 )
−Removed: Net cash provided by (used in) financing activities ( 121,338 ) ( 230,030 ) 228,996
+Added: Net cash used in financing activities ( 91,633 ) ( 121,338 ) ( 230,030 )
Effect of exchange rates on cash, cash equivalents and restricted cash ( 14 ) ( 2,471 ) ( 3,018 )
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Cash and cash equivalents $ 71,568 $ 36,224 $ 260,980
−Removed: Restricted cash and cash equivalents, included in prepaid expenses and other current assets 3,512 4,301 4,121
−Removed: Restricted cash and cash equivalents, included in other assets 12,158 — —
+Added: Restricted cash, included in prepaid expenses and other current assets 15,756 3,512 4,301
+Added: Restricted cash, included in other assets 2,127 12,158 —
Total cash, cash equivalents and restricted cash — end of year $ 89,451 $ 51,894 $ 265,281
1 unchanged sentence
Cash payments of interest $ 73,996 $ 40,871 $ 32,242
+Added: Cash received from cash flow hedges of interest rate risk $ 31,826 $ 7,320 $ —
Cash payments of income taxes $ 58,736 $ 50,202 $ 31,662
9 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: Organization — Bright Horizons Family Solutions Inc.
−Removed: (“Bright Horizons” or the “Company”) provides center-based early education and child care, back-up child and adult/elder care, tuition assistance and student loan repayment program management, educational advisory services, and other support services for employers and families in the United States, the United Kingdom, the Netherlands, Australia, Puerto Rico, and India.
+Added: Bright Horizons Family Solutions Inc.
+Added: (“Bright Horizons” or the “Company”) provides center-based early education and child care, back-up child and adult/elder care, tuition assistance and student loan repayment program management, educational advisory services, and other support services for employers and families in the United States, the United Kingdom, the Netherlands, Australia, and India.
The Company provides services designed to help families, employers and their employees better integrate work and family life, primarily under multi-year contracts with employers who offer child care, dependent care, and workforce education services, as part of their employee benefits packages in an effort to support employees across life and career stages and improve employee engagement.
−Removed: Since March 2020, the Company’s global operations have been significantly impacted by the COVID-19 pandemic and the measures undertaken in response thereto.
−Removed: During the early stages of the pandemic, most of the Company’s child care centers were temporarily closed.
−Removed: Nearly all centers have subsequently re-opened.
−Removed: As of December 31, 2022, the Company operated 1,078 early education and child care centers, of which 99 % were open.
−Removed: On July 1, 2022, the Company acquired Only About Children (“OAC”), an operator of approximately 75 child care centers in Australia.
+Added: As of December 31, 2023, the Company operated 1,049 early education and child care centers.
+Added: On July 1, 2022, the Company acquired Only About Children (“Only About Children”), an operator of 75 child care centers in Australia.
Refer to Note 5, Acquisitions , for additional information.
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The Company’s significant accounting policies are described below.
−Removed: Reclassification — Certain reclassifications have been made to prior year amounts within the consolidated statements of cash flows and certain footnotes to conform to the current year presentation.
+Added: During the year ended December 31, 2023, the Company recorded expense of $ 5.5 million for an immaterial correction of an error related to value-added tax incurred in prior periods, of which $ 4.0 million is included in cost of services and $ 1.5 million is included in selling, general and administrative expenses.
+Added: Refer to Note 18, Segment and Geographic Information , for additional information.
+Added: Reclassification — Certain reclassifications have been made to prior year amounts within certain footnotes to conform to the current year presentation.
Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its subsidiaries.
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As of December 31, 2023, $ 9.0 million in book overdrafts were included in accounts payable and accrued expenses on the consolidated balance sheet.
−Removed: As of December 31, 2021, there were no book overdrafts.
+Added: As of December 31, 2022, there were $ 8.6 million in book overdrafts.
The Company’s cash and cash equivalents that are restricted in nature as to withdrawal or usage are classified as restricted cash and are included in prepaid expenses and other current assets and in other assets on the consolidated balance sheet.
−Removed: Restricted cash is primarily comprised of cash deposits that guarantee letters of credit, and cash and cash equivalents associated with the Company’s wholly-owned captive insurance company.
+Added: Restricted cash is primarily comprised of cash and cash equivalents associated with the Company’s wholly-owned captive insurance company and cash deposits that guarantee letters of credit.
Accounts Receivable — The Company generates accounts receivable from fees charged to parents and employer sponsors, which are generally billed monthly as services are rendered or in advance, and are classified as short-term.
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If the carrying amount of the Company’s reporting unit exceeds its fair value, the Company would recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, up to the amount of goodwill allocated to that reporting unit.
−Removed: The Company performed a quantitative assessment in the 2022 annual impairment review as of October 1, 2022.
−Removed: The Company performed a qualitative assessment during the annual impairment review as of October 1, 2021, and concluded that it was not more likely than not that the fair value of the Company’s reporting units were less than their carrying amount.
+Added: The Company performed a quantitative assessment in the 2023 and 2022 annual impairment reviews as of October 1, 2023 and 2022, respectively.
No goodwill impairment charges were recorded in the years ended December 31, 2023, 2022, or 2021.
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No impairment losses were recorded in the years ended December 31, 2023, 2022 or 2021 in relation to these intangible assets.
−Removed: Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and are amortized over the estimated period benefited, generally ranging from two to seventeen years .
+Added: Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and are amortized over the estimated period benefited, generally ranging from 2 to 17 years.
Intangible assets related to parent relationships are amortized using an accelerated method over their useful lives.
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The determination of fair value for leased assets includes consideration of market rates and what market participants would pay to use the assets.
−Removed: During the years ended December 31, 2022, 2021 and 2020, the Company recognized impairment losses of $ 14.1 million , $ 10.6 million and $ 26.2 million , respectively, on fixed assets and operating lease right-of-use assets for certain centers where the carrying amount exceeded the fair value.
+Added: In connection with the optimization of our portfolio of centers, the Company continues to monitor and respond to changing conditions and the changing needs of clients and families, including the routine closure of underperforming centers.
+Added: As a result of this process, during the years ended December 31, 2023, 2022 and 2021, the Company reviewed long-lived assets, noting that certain asset groups were not recoverable, and recognized impairment losses of $ 35.9 million, $ 14.1 million and $ 10.6 million, respectively, on fixed assets and operating lease right-of-use assets for locations where the carrying amount exceeded the fair value.
Refer to Note 14, Fair Value Measurements , for additional information.
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In addition, employer sponsors typically provide subsidies for the ongoing provision of child care services to their employees.
−Removed: Under all model types, the Company retains responsibility for all aspects of operating the child care center, including the hiring, training, supervising and compensating employees, contracting with vendors, purchasing supplies, and collecting tuition and related accounts receivable.
+Added: Under all model types, the Company retains responsibility for all aspects of operating the child care center, including the hiring, training, supervising and compensating of employees, contracting with vendors, purchasing supplies, and collecting tuition and related accounts receivable.
Revenue generated from full service center-based child care services is primarily comprised of monthly tuition paid by parents.
3 unchanged sentences
The Company enters into contracts with employer sponsors to manage and operate their early education and child care centers for a management fee, or to provide child care services to their employees on an exclusive or priority basis.
−Removed: These arrangements generally have a contractual term of three to ten years with varying terms and renewal and cancellation options, and may also include operating subsidies paid either in lieu of or to supplement parent tuition.
+Added: These arrangements generally have a contractual term of 3 to 10 years with varying terms and renewal and cancellation options, and may also include operating subsidies paid either in lieu of or to supplement parent tuition.
The management fee included in contracts with employer sponsors is typically a monthly amount, and generally includes an annual escalator that is intended to reflect expected future cost increases.
8 unchanged sentences
Back-Up Care Services
−Removed: Back-up care services consist of center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, virtual tutoring, pet care and self-sourced reimbursed care.
+Added: Back-up care services consist of center-based back-up child care, in-home child and adult/elder dependent care, school-age camps, tutoring, pet care and self-sourced reimbursed care.
The Company provides back-up care services through the Company’s early education and child care centers, school-age camps and in-home care providers, as well as through the back-up care network and through other providers.
−Removed: Bright Horizons back-up care offers access to a contracted network of in-home service agencies and center-based providers in locations where the Company does not otherwise have in-home care providers or centers with available capacity, to a network of tutoring service providers and third-party pet care providers.
+Added: Bright Horizons back-up care offers access to a contracted network of in-home service agencies and center-based providers in locations where the Company does not otherwise have in-home care providers or centers with available capacity, to a network of tutoring service providers and to third-party pet care providers.
Self-sourced reimbursed care is a reimbursement program available to employer sponsors when other care solutions are not available, to provide payments to their employees to assist with the cost of self-sourced dependent care.
1 unchanged sentence
These arrangements generally have contractual terms of three years with varying terms and renewal and cancellation options.
−Removed: Fees for back-up care services are typically determined based on the number of back-up uses purchased, which may be fixed based on a specified number of uses or variable fees paid per use, and are generally billed monthly as services are rendered or in advance.
+Added: Fees for back-up care services are typically determined based on the number of back-up uses purchased, which may be fixed based on a specified number of uses or variable paid per use, and are generally billed monthly as services are rendered or in advance.
Revenue for back-up care services is generally recognized over time as the services are performed and is recognized in the month the back-up services are provided.
7 unchanged sentences
Revenue for EdAssist is recognized on a straight-line basis using the time-elapsed method over the contract term with additional charges recognized in the month the additional services are provided consistent with the overall allocation objective.
−Removed: Additionally, revenue for tuition assistance and student loan repayments is based on a fee earned for each payment processed and is recorded on a net basis as the Company is acting as agent for the processing of the payment from clients to their employees, and is recognized in the month the payments are processed.
+Added: Additionally, revenue for tuition assistance and student loan repayments is based on a fee earned for each transaction processed and is recorded on a net basis as the Company is acting as an agent for the processing of the payment from clients to their employees, and is recognized in the month the payments are processed.
Revenue for College Coach is recognized over the contract term as college advisory services are provided and customers receive the benefit.
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Subscription fees are recognized on a straight-line basis using the time-elapsed method over the contract term, and variable transaction fees earned are allocated to that distinct transaction consistent with the overall allocation objective.
+Added: In fiscal year 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: As a result, effective January 1, 2024, the back-up care reportable segment will now include the Sittercity operations.
Significant Judgments and Estimates
34 unchanged sentences
The Company’s lease agreements do not contain material restrictive covenants.
−Removed: Equity Method Investment — The Company accounts for its investments in entities over which the Company has significant influence, but not control, using the equity method of accounting.
+Added: Equity Method Investments — The Company accounts for its investments in entities over which the Company has significant influence, but not control, using the equity method of accounting.
Under the equity method of accounting, the investment is adjusted to reflect Bright Horizons’ proportionate share of the investees’ net earnings or losses, and is reduced by the amortization of embedded intangible assets.
2 unchanged sentences
The equity method investments are included in other assets on the consolidated balance sheet and, as of December 31, 2023 and 2022, the investment balance was $ 9.4 million and $ 7.2 million, respectively.
−Removed: The impact on the results of operations were immaterial for the years ended December 31, 2022, 2021 and 2020.
−Removed: Debt Securities — The Company’s investment in debt securities, which are classified as available-for-sale, consist of U.S.
+Added: The impact on the results of operations was immaterial for the years ended December 31, 2023, 2022 and 2021.
+Added: Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, consist of U.S.
Treasury and U.S.
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As such, these securities are not available to fund the Company’s operations.
−Removed: These securities are recorded at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss).
−Removed: As of December 31, 2022, the fair value of the available-for-sale debt securities was $ 29.6 million and was classified based on the instruments’ maturity dates, with $ 17.7 million included in prepaid expenses and other current assets and $ 11.9 million in other assets on the consolidated balance sheet.
−Removed: As of December 31, 2021, the fair value of the available-for-sale debt securities was $ 29.9 million, with $ 22.7 million included in prepaid expenses and other current assets and $ 7.2 million in other assets on the consolidated balance sheet.
−Removed: At December 31, 2022 and 2021, the amortized cost was $ 29.8 million and $ 30.0 million, respectively.
−Removed: The debt securities held at December 31, 2022 had remaining maturities ranging from less than one year to approximately two years .
−Removed: Unrealized gains and losses, net of tax, and realized gains and losses, on available-for-sale debt securities were immaterial for the years ended December 31, 2022, 2021 and 2020.
+Added: These securities are recorded at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income or loss.
+Added: Refer to Note 14, Fair Value Measurements , for additional information on the Company’s investments in debt securities.
Other Investments — The Company’s investments in equity securities are primarily in limited partnerships.
2 unchanged sentences
As of December 31, 2023 and 2022, the equity investments were $ 5.5 million and $ 5.1 million, respectively, which were recorded in other assets on the consolidated balance sheet.
−Removed: During the year ended December 31, 2020, the Company recognized a $ 2.1 million impairment loss on an equity investment.
−Removed: The impairment loss was included in cost of services on the consolidated statement of income, which was allocated to the back-up care segment.
−Removed: Refer to Note 14, Fair Value Measurements , for additional information.
−Removed: Discount on Long-Term Debt and Deferred Financing Costs — Original issue discounts on the Company’s debt and deferred financing costs are recorded as a reduction of long-term debt and are amortized over the life of the related debt instrument in accordance with the effective interest method.
+Added: Refer to Note 9, Other Assets , for additional information on the Company’s investments in equity securities.
+Added: Discount on Long-Term Debt and Deferred Financing Costs — Original issue discounts on the Company’s debt and deferred financing costs are recorded as a reduction of long-term debt and are amortized over the life of the related debt instruments in accordance with the effective interest method.
Amortization expense is included in interest expense in the consolidated statement of income.
13 unchanged sentences
The Company calculates the fair value of stock options using the Black-Scholes option-pricing model.
−Removed: The fair value of restricted stock, restricted stock units and performance stock units is based on their intrinsic value on the date of grant.
−Removed: Excess tax benefits (deficiencies) associated with stock-based compensation are recognized as a component of income tax expense (benefit).
+Added: The fair value of restricted stock, restricted stock units and performance restricted stock units is based on their intrinsic value on the date of grant.
+Added: Excess (shortfall) tax benefits (expense) associated with stock-based compensation are recognized as a component of income tax expense.
Comprehensive Income or Loss — Comprehensive income or loss is comprised of net income or loss, foreign currency translation adjustments, and unrealized gains or losses on cash flow hedges and investments, net of tax.
6 unchanged sentences
Diluted earnings per share is calculated by dividing net income by the weighted-average common shares and potentially dilutive securities outstanding during the period using the more dilutive of the treasury stock method or the two-class method.
−Removed: Government Support — The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Consolidated Appropriations Act, 2021 (“CAA”), and the American Rescue Plan Act of 2021 were enacted in the United States on March 27, 2020, January 1, 2021, and March 11, 2021, respectively;
−Removed: all are economic aid packages to help mitigate the impact of the pandemic.
−Removed: Additionally, other foreign governmental legislation that provided relief provisions was enacted in response to the economic impact of COVID-19.
−Removed: The Company has participated in certain government support programs, including availing itself of certain tax deferrals, tax credits and federal block grant funding in the United States, as well as certain tax deferrals, tax credits, and employee wage support in the United Kingdom.
−Removed: On December 27, 2020, the employee retention tax credit, originally enacted under the CARES Act in the United States, was expanded and extended under the CAA to wages paid through the first two quarters of 2021, among other changes.
+Added: Government Support — The Company has participated in certain government support programs that were enacted in response to the economic impact of the COVID-19 pandemic.
+Added: With the expiration of the child care stabilization grants on September 30, 2023, most of the pandemic-related government support programs for which the Company was eligible ended in 2023.
The Company has applied the accounting principles within the International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance , (“IAS 20”) framework to account for government grants received, which are recognized when there is reasonable assurance that the Company will (1) comply with the conditions associated with the grant and (2) receive the grant.
3 unchanged sentences
Amounts received for tuition support are recognized as revenue if such payments are made on behalf of the customers.
−Removed: During the years ended December 31, 2022, 2021, and 2020, $ 86.8 million, $ 50.9 million, and $ 83.5 million, respectively, was recorded as a reduction to cost of services in relation to these benefits, of which $ 31.7 million, $ 16.0 million and $ 14.6 million, respectively, reduced the operating subsidies paid by employers for the related child care centers.
−Removed: Additionally, during the year ended December 31, 2022, amounts received for tuition support of $ 5.5 million were recorded to revenue.
−Removed: As of December 31, 2022 and 2021, $ 1.2 million and $ 3.3 million, respectively, was recorded in prepaid expenses and other current assets on the consolidated balance sheet for amounts due from government support programs, and as of December 31, 2022 and 2021, $ 4.6 million and $ 3.9 million, respectively, was recorded to other current liabilities related to government support received related to future periods.
−Removed: As of December 31, 2021, payroll tax deferrals of $ 7.0 million were recorded in accounts payable and accrued expenses on the consolidated balance sheet and, as of December 31, 2022, the Company did not have any remaining payroll tax deferrals.
+Added: During the years ended December 31, 2023, 2022, and 2021, funding received from pandemic-related government support programs reduced center cost of services by $ 49.4 million, $ 86.8 million, and $ 50.9 million, respectively, of which $ 17.5 million, $ 31.7 million and $ 16.0 million, respectively, reduced the operating subsidies paid by employers for the related child care centers.
+Added: Additionally, during the years ended December 31, 2023 and 2022, amounts received for tuition support of $ 1.7 million and $ 5.5 million, respectively, were recorded to revenue.
+Added: As of December 31, 2022, $ 1.2 million was recorded in prepaid expenses and other current assets for amounts due from government support programs and $ 4.6 million was recorded to other current liabilities related to government support received for future periods.
+Added: Amounts outstanding as of December 31, 2023 were not material.
REVENUE RECOGNITION
17 unchanged sentences
$ 1,297,208 $ 351,103 $ 106,996 $ 1,755,307
−Removed: The classification “North America” is comprised of the Company’s United States, Canada and Puerto Rico operations and the classification “International” includes the Company’s United Kingdom, Netherlands, Australia and India operations.
+Added: The classification “North America” is comprised of the Company’s operations in the United States (including Puerto Rico) and the classification “International” includes the Company’s operations in the United Kingdom, the Netherlands, Australia and India.
Revenue in the United States was substantially all of the revenue in North America.
Revenue in the United Kingdom was $ 368.5 million in 2023, $ 325.8 million in 2022, and $ 334.9 million in 2021.
−Removed: Revenue associated with other countries was approximately less than 10% of total revenue.
−Removed: On July 1, 2022, the Company acquired Only About Children, an operator of approximately 75 child care centers in Australia.
+Added: Revenue associated with each of the other countries in which the Company operates was less than 10% of total revenue.
+Added: On July 1, 2022, the Company acquired Only About Children, an operator of 75 child care centers in Australia.
Refer to Note 5, Acquisitions , for additional information.
−Removed: During the year ended December 31, 2020, the Company divested its child care center business in Canada and ceased to operate its two centers in that geography.
Deferred Revenue
The Company records deferred revenue when payments are received in advance of the Company’s performance under the contract, which is recognized as revenue as the performance obligation is satisfied.
−Removed: In 2022, 2021 and 2020, $ 254.2 million, $ 187.1 million and $ 184.6 million was recognized as revenue related to the deferred revenue balance recorded at December 31, 2021, 2020 and 2019, respectively.
−Removed: There were no significant changes in deferred revenue during the years ended December 31, 2022, 2021 and 2020 related to business combinations, impairments, cumulative catch-up or other adjustments other than related to the opening balance sheet for the OAC acquisition.
+Added: The Company recognized $ 220.1 million, $ 254.2 million and $ 187.1 million as revenue in the years ended December 31, 2023, 2022 and 2021, respectively, which was included in the deferred revenue balance at the beginning of each respective year.
+Added: There were no significant changes in deferred revenue during the years ended December 31, 2023, 2022 and 2021 related to business combinations, impairments, cumulative catch-up or other adjustments other than related to the opening balance sheet for the Only About Children acquisition.
Refer to Note 5, Acquisitions , for additional information.
33 unchanged sentences
The leases are expected to commence in fiscal 2024 and have initial lease terms of approximately 12 to 15 years.
−Removed: Lease Modifications
−Removed: On April 10, 2020, the Financial Accounting Standards Board issued guidance for lease concessions provided to lessees in response to the effects of COVID-19.
−Removed: Such guidance allows lessees to make an election not to evaluate whether a lease concession provided by a lessor should be accounted for as a lease modification, in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee.
−Removed: Such concessions would be recorded as negative lease expense in the period of relief.
−Removed: The Company elected this practical expedient in accounting for lease concessions provided for the Company’s center lease agreements and the impact was immaterial.
−Removed: As of December 31, 2022 and 2021, the Company's deferred lease payments were immaterial.
The Company’s growth strategy includes expansion through strategic and synergistic acquisitions.
1 unchanged sentence
2023 Acquisitions
+Added: During the year ended December 31, 2023, the Company acquired four centers in the United States and six centers in Australia, in five separate business acquisitions, which were each accounted for as a business combination.
+Added: The businesses were acquired for aggregate cash consideration of $ 39.5 million, which is subject to adjustments from the settlement of the final working capital and acquired enrollment.
+Added: The Company recorded goodwill of $ 37.2 million related to the full service center-based child care segment in relation to these acquisitions, of which $ 25.5 million will be deductible for tax purposes.
+Added: In addition, the Company recorded intangible assets of $ 4.0 million that will be amortized over four years .
+Added: The determination and allocation of purchase price consideration is based on preliminary estimates of fair value;
+Added: such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).
+Added: As of December 31, 2023, the purchase price allocations for these acquisitions remain open as the Company gathers additional information regarding the assets acquired and the liabilities assumed.
+Added: The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition, and were not material to the Company’s financial results.
+Added: During the year ended December 31, 2023, the Company paid contingent consideration of $ 0.2 million related to an acquisition completed in 2021, which had been recorded as a liability at the date of acquisition and is presented as cash used in financing activities in the consolidated statement of cash flows.
+Added: 2022 Acquisitions
Only About Children
On July 1, 2022, the Company, through wholly-owned subsidiaries, completed the acquisition of the outstanding shares of Only About Children, a child care operator in Australia with approximately 75 early education and child care centers, for aggregate consideration of AUD$ 450 million (USD$ 310 million), which was accounted for as a business combination.
−Removed: The Company paid approximately AUD$ 300 million (USD$ 207 million), net of cash acquired and subject to customary purchase price adjustments, and will pay an additional USD$ 106.5 million 18 months after closing.
−Removed: In October 2022, the Company reached an agreement with the sellers on the final net working capital acquired, resulting in a refund of AUD$ 2.6 million (USD$ 1.8 million), which was received in the fourth quarter of 2022.
−Removed: The present value of the deferred consideration of USD$ 97.7 million at the acquisition date is included in other current liabilities on the consolidated balance sheet.
−Removed: During the year ended December 31, 2022, the Company incurred acquisition-related transaction costs of approximately $ 9.2 million, which are included in selling, general and administrative expenses.
+Added: The Company paid approximately AUD$ 300 million (USD$ 207 million), net of cash acquired and subject to customary purchase price adjustments, and paid an additional USD$ 106.5 million 18 months after closing, in January 2024, in accordance with the terms of the purchase agreement.
+Added: In the fourth quarter of 2022, the Company reached an agreement with the sellers on the final net working capital acquired, resulting in a refund of AUD$ 2.6 million (USD$ 1.8 million).
+Added: During the year ended December 31, 2022, the Company incurred acquisition-related transaction costs of approximately $ 9.2 million, which were included in selling, general and administrative expenses.
In addition, the Company recognized realized losses of $ 5.9 million in relation to foreign currency forward contracts for the purchase of Australian dollars entered into in connection with the acquisition.
Refer to Note 12, Credit Arrangements and Debt Obligations, for additional information on the foreign currency forward contracts.
−Removed: The purchase price for this acquisition has been allocated based on preliminary estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows:
+Added: The purchase price for this acquisition has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows:
At acquisition date
September 30, 2022 Measurement period adjustments At acquisition date
−Removed: December 31, 2022
+Added: September 30, 2023
(In thousands)
14 unchanged sentences
The Company recorded goodwill of $ 287.9 million related to the full service center-based child care segment, which will not be deductible for tax purposes.
−Removed: Intangible assets consist of customer relationships of $ 19.7 million with a six year life and trade names of $ 7.9 million with an eleven year life.
−Removed: The determination and allocation of purchase price consideration is based on preliminary estimates of fair value;
−Removed: such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).
−Removed: As of December 31, 2022, the purchase price allocation for Only About Children remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed, primarily in relation to the valuation of intangibles, fixed assets, leases, contingencies, and the Company’s assessment of tax related items.
−Removed: The operating results for Only About Children are included in the consolidated results of operations from the date of acquisition.
−Removed: Only About Children contributed total revenue of $ 71.5 million during the year ended December 31, 2022.
−Removed: Net income for the year ended December 31, 2022 was not materially impacted by the acquisition of Only About Children.
+Added: Intangible assets consist of customer relationships of $ 19.7 million with a 6 year life and trade names of $ 7.9 million with an 11 year life.
+Added: The operating results for Only About Children are included in the consolidated results of operations from the date of acquisition, and are reported with the full service center-based child care segment.
The following table presents consolidated pro forma revenue as if the acquisition of Only About Children had occurred on January 1, 2021:
Pro forma (Unaudited)
−Removed: Year ended December 31, 2022 Year ended December 31, 2021
+Added: Year ended December 31, 2022
(In thousands)
7 unchanged sentences
In addition, the Company recorded intangible assets of $ 1.0 million that will be amortized over four years in relation to these acquisitions.
−Removed: The determination and allocation of purchase price consideration is based on preliminary estimates of fair value;
−Removed: such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).
−Removed: As of December 31, 2022, the purchase price allocations for these acquisitions remain open as the Company gathers additional information regarding the assets acquired and the liabilities assumed.
−Removed: The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition, and were not material to the Company’s financial results.
During the year ended December 31, 2022, the Company paid contingent consideration of $ 19.1 million related to an acquisition completed in 2019 and contingent consideration of $ 0.2 million related to an acquisition completed in 2021.
−Removed: Of the total amounts paid of $ 19.3 million, $ 13.9 million had been recorded as a liability at the date of acquisition and is presented as cash used in financing activities in the consolidated statement of cash flows with remaining amounts reflected as cash used in operating activities.
+Added: Of the total amounts paid of $ 19.3 million, $ 13.9 million had been recorded as a liability at the date of acquisition and was presented as cash used in financing activities in the consolidated statement of cash flows with remaining amounts reflected as cash used in operating activities.
2021 Acquisitions
−Removed: During the year ended December 31, 2021, the Company acquired two centers as well as a school-age camp provider in the United States, 13 centers in the United Kingdom, and three centers in the Netherlands, in five separate business acquisitions, which were each accounted for as a business combination.
+Added: During the year ended December 31, 2021, the Company acquired 2 centers as well as a school-age camp provider in the United States, 13 centers in the United Kingdom, and 3 centers in the Netherlands, in 5 separate business acquisitions, which were each accounted for as a business combination.
These businesses were acquired for aggregate cash consideration of $ 53.2 million, net of cash acquired of $ 2.2 million, and consideration payable of $ 0.6 million.
4 unchanged sentences
During the year ended December 31, 2021, the Company paid $ 0.6 million for contingent consideration related to acquisitions completed in 2021, which had been recorded as a liability at the date of acquisition.
−Removed: 2020 Acquisitions
−Removed: During the year ended December 31, 2020, the Company acquired two child care centers and the Sittercity business, an online marketplace for families and caregivers, in the United States, in three separate business acquisitions, which were each accounted for as a business combination.
−Removed: These businesses were acquired for cash consideration of $ 8.1 million, net of cash acquired of $ 1.3 million, and consideration payable of $ 0.1 million, and included fixed assets and technology of $ 4.1 million, as well as a trade name of $ 0.7 million that will be amortized over five years .
−Removed: The Company recorded goodwill of $ 2.0 million related to the educational advisory and other services segment and $ 2.1 million related to the full service center-based child care segment, all of which will be deductible for tax purposes.
−Removed: During the year ended December 31, 2020, the Company paid $ 1.2 million for contingent consideration related to acquisitions completed in 2018 and 2019, which had been recorded as a liability at the date of acquisition.
GOODWILL AND INTANGIBLE ASSETS
7 unchanged sentences
Adjustments to prior year acquisitions
−Removed: 3,902 — 150 4,052
Effect of foreign currency translation
33 unchanged sentences
2024 $ 18,020
−Removed: 2024 $ 16,534
Thereafter 3,205
2 unchanged sentences
(In thousands)
−Removed: Interest rate cap derivatives $ 25,464 $ —
Investments in available-for-sale debt securities $ 22,005 $ 17,701
+Added: Restricted cash 15,756 3,512
Prepaid software and licenses 12,911 9,272
−Removed: Prepaid income taxes 9,035 4,849
Prepaid insurance 7,649 7,386
Prepaid rent and other occupancy costs 6,846 4,411
+Added: Prepaid income taxes 6,049 9,035
+Added: Interest rate cap derivatives — 25,464
Other prepaid expenses and current assets 22,405 17,535
$ 93,621 $ 94,316
+Added: A portion of the Company’s interest rate cap derivatives matured in 2023.
+Added: Refer to Note 12, Credit Arrangements and Debt Obligations, for additional information on derivatives.
Fixed assets consisted of the following:
10 unchanged sentences
Fixed assets — net $ 579,296 $ 571,471
−Removed: Fixed assets include construction in progress of $ 17.1 million and $ 16.3 million at December 31, 2022 and 2021, respectively, which was primarily comprised of leasehold improvements.
+Added: Fixed assets included construction in progress of $ 26.0 million and $ 17.1 million at December 31, 2023 and 2022, respectively, which was primarily comprised of leasehold improvements.
The Company recorded depreciation expense of $ 77.3 million, $ 74.2 million and $ 79.7 million for the years ended December 31, 2023, 2022, and 2021, respectively.
+Added: During the years ended December 31, 2023, 2022 and 2021, the Company recognized impairment losses of $ 14.9 million, $ 11.3 million, and $ 9.3 million, respectively, related to fixed assets.
+Added: Refer to Note 14, Fair Value Measurements , for additional information.
Other assets consisted of the following:
3 unchanged sentences
Prepaid workers compensation 16,598 13,084
+Added: Equity-method investments 9,359 7,165
+Added: Investments in equity securities
Restricted cash 2,127 12,158
Investments in available-for-sale debt securities 1,859 11,858
−Removed: Equity-method investments 7,165 6,058
Other assets 9,412 10,783
1 unchanged sentence
Restricted cash relates to letters of credit outstanding used to guarantee certain lease arrangements.
+Added: During the year ended December 31, 2023, certain cash-backed letters of credit were replaced with letters of credit under our revolving credit facility releasing the cash from restrictions.
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
3 unchanged sentences
Accounts payable 24,803 24,648
−Removed: Accrued provider fees 18,912 10,815
Accrued insurance liabilities 22,381 18,152
+Added: Accrued provider fees 22,295 18,912
Accrued occupancy costs 11,009 11,732
1 unchanged sentence
$ 259,077 $ 230,634
−Removed: Payroll taxes deferred pursuant to the provisions of the CARES Act of $ 7.0 million were recorded in accrued payroll and employee benefits as of December 31, 2021.
−Removed: There were no payroll taxes deferred pursuant to the provisions of the CARES Act as of December 31, 2022.
Accrued insurance primarily consisted of reserves for claims associated with workers’ compensation and general liability.
2 unchanged sentences
(In thousands)
−Removed: Deferred or contingent consideration payable for acquisitions $ 100,610 $ 19,219
+Added: Deferred consideration payable for acquisitions $ 106,500 $ 100,610
Customer amounts on deposit 29,025 23,000
2 unchanged sentences
$ 148,578 $ 138,574
−Removed: As of December 31, 2022, the Company had deferred consideration payable that was primarily related to the acquisition of Only About Children.
−Removed: The acquisition was completed on July 1, 2022 and $ 106.5 million of the consideration is payable 18 months after closing, which had a present value of $ 97.7 million at the acquisition date.
−Removed: As of December 31, 2021, the Company had contingent consideration that was primarily related to an acquisition in the United Kingdom completed in 2019.
+Added: At December 31, 2023 and 2022, the Company had deferred consideration payable related to the acquisition of Only About Children, which was completed on July 1, 2022.
+Added: These amounts were paid in January 2024, 18 months after the closing date of the acquisition in accordance with the terms of the purchase agreement.
Refer to Note 5, Acquisitions , for additional information.
10 unchanged sentences
Long-term debt $ 944,264 $ 961,581
−Removed: On November 23, 2021, the Company amended its existing senior secured credit facilities to refinance the existing secured term loan facility with a new term loan B facility of $ 600 million and a new term loan A facility of $ 400 million, collectively the “term loan facilities” or “term loans.” Proceeds of $ 1 billion from the new term loans, together with cash on hand, were used to repay $ 1.03 billion in outstanding term loans and related fees and expenses.
−Removed: The terms of the existing $ 400 million multi-currency revolving credit facility (“revolving credit facility”) were not modified in the November 2021 amendment.
+Added: On November 23, 2021, the Company amended its existing senior secured credit facilities to refinance the existing secured term loan facility with a new term loan B facility of $ 600 million and a new term loan A facility of $ 400 million.
+Added: Proceeds of $ 1 billion from the new term loans, together with cash on hand, were used to repay $ 1.03 billion in outstanding term loans and related fees and expenses.
+Added: The terms of the existing $ 400 million multi-currency revolving credit facility were not modified in the November 2021 amendment.
The repayment of the existing term loan was treated as a debt extinguishment.
5 unchanged sentences
The effective interest rate for the term loans was 7.52 % and 6.49 % at December 31, 2023 and 2022, respectively, and the weighted average interest rate was 7.19 %, 3.75 %, and 2.51 % for the years ended December 31, 2023, 2022, and 2021, respectively, prior to the effects of any interest rate hedge arrangements.
−Removed: The effective interest rate for the revolving credit facility was 6.51 % at December 31, 2022 and the weighted average interest rate for the revolving credit facility was 4.86 %, 3.75 %, and 4.49 % for the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: The effective interest rate for the revolving credit facility was 6.51 % at December 31, 2022, and there were no borrowings outstanding under the revolving credit facility at December 31, 2023.
+Added: The weighted average interest rate for the revolving credit facility was 7.73 %, 4.86 %, and 3.75 % for the years ended December 31, 2023, 2022, and 2021, respectively.
Term Loan B Facility
9 unchanged sentences
The $ 400 million multi-currency revolving credit facility matures on May 26, 2026.
−Removed: Borrowings outstanding on the revolving credit facility were $ 84.0 million and letters of credit outstanding were $ 5.2 million at December 31, 2022, with $ 310.8 million available for borrowing.
−Removed: There were no borrowings outstanding on the revolving credit facility at December 31, 2021, with the full facility available for borrowing.
−Removed: On May 26, 2021, the Company amended its existing senior secured credit facilities to, among other changes, extend the revolving credit facility maturity date from July 31, 2022 to May 26, 2026, and reduce the interest rates applicable to borrowings outstanding on the revolving credit facility.
+Added: At December 31, 2023, there were no borrowings outstanding under the revolving credit facility and letters of credit outstanding were $ 19.3 million, with $ 380.7 million available for borrowing.
+Added: Borrowings outstanding under the revolving credit facility were $ 84.0 million and letters of credit outstanding were $ 5.2 million at December 31, 2022, with $ 310.8 million available for borrowing.
+Added: In January 2024, the Company utilized the revolving credit facility, combined with available cash on hand, to pay the deferred consideration related to the July 1, 2022 acquisition of Only About Children.
+Added: Refer to Note 5, Acquisitions, for additional information.
+Added: On May 26, 2021, the Company amended its existing senior secured credit facilities to, among other changes, extend the revolving credit facility maturity date from July 31, 2022 to May 26, 2026, and reduce the interest rates applicable to borrowings outstanding under the revolving credit facility.
In conjunction with this credit amendment, the Company incurred $ 2.1 million in fees that have been capitalized in other assets on the consolidated balance sheet and are amortized over the contractual life of the revolving credit facility.
20 unchanged sentences
2024 $ 18,500
−Removed: Thereafter 564,000
Total future principal payments $ 968,000
2 unchanged sentences
The Company's risk management policy permits using derivative instruments to manage interest rate and other risks.
−Removed: The Company uses interest rate swaps and caps to manage a portion of the risk related to changes in cash flows from interest rate movements.
+Added: The Company uses interest rate caps to manage a portion of the risk related to changes in cash flows from interest rate movements.
On December 21, 2022, the Company amended its existing interest rate cap agreements in conjunction with the amendment to its senior secured credit facilities, and replaced the one-month LIBOR rate with the one-month term SOFR rate.
1 unchanged sentence
In June 2020, the Company entered into interest rate cap agreements with a total notional value of $ 800 million, designated and accounted for as cash flow hedges from inception, to provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 1 % (effective December 30, 2022, one-month term SOFR rate increases above 0.9 %).
−Removed: Interest rate cap agreements for $ 300 million notional value have an effective date of June 30, 2020 and expire on October 31, 2023, while interest rate cap agreements for another $ 500 million notional amount have an effective date of October 29, 2021 and expire on October 31, 2023.
+Added: Interest rate cap agreements for $ 300 million notional value had an effective date of June 30, 2020 and expired on October 31, 2023, while interest rate cap agreements for another $ 500 million notional amount had an effective date of October 29, 2021 and expired on October 31, 2023.
In December 2021, the Company entered into additional interest rate cap agreements with a total notional value of $ 900 million designated and accounted for as cash flow hedges from inception.
−Removed: Interest rate cap agreements for $ 600 million, which have a forward starting effective date of October 31, 2023 and expire on October 31, 2025, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 2.5 % (effective December 30, 2022, one-month term SOFR rate increases above 2.4 %).
−Removed: Interest rate cap agreements for $ 300 million, which have a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 3.0 % (effective December 30, 2022, one-month term SOFR rate increases above 2.9 %).
−Removed: In October 2017, the Company entered into variable-to-fixed interest rate swap agreements on $ 500 million notional amount of the outstanding term loan borrowings.
−Removed: These swap agreements, designated and accounted for as cash flow hedges from inception, matured on October 31, 2021.
−Removed: The Company was required to make monthly payments on the notional amount at a fixed average interest rate, plus the applicable rate for eurocurrency loans.
−Removed: Effective as of May 31, 2018, the notional amount was subject to a total interest rate of approximately 3.65 %.
−Removed: In exchange, the Company received interest on the notional amount at a variable rate based on the one-month LIBOR rate, subject to a 0.75 % floor.
−Removed: The interest rate swaps and interest rate caps are recorded on the Company’s consolidated balance sheet at fair value and classified based on the instruments’ maturity dates.
−Removed: The Company records gains and losses resulting from changes in the fair value of the interest rate swaps and interest rate caps to accumulated other comprehensive income or loss, inclusive of the related income tax effects.
+Added: Interest rate cap agreements for $ 600 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2025, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 2.5 % (effective December 30, 2022, one-month term SOFR rate increases above 2.4 %).
+Added: Interest rate cap agreements for $ 300 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 3.0 % (effective December 30, 2022, one-month term SOFR rate increases above 2.9 %).
+Added: The interest rate caps are recorded on the Company’s consolidated balance sheet at fair value and are classified based on the instruments’ maturity dates.
+Added: The Company records gains and losses resulting from changes in the fair value of the interest rate caps to accumulated other comprehensive income or loss, inclusive of the related income tax effects.
These gains and losses are subsequently reclassified into earnings and recognized to interest expense in the Company’s consolidated statement of income in the period that the hedged interest expense on the term loan facilities is recognized.
26 unchanged sentences
Net of income taxes $ 1,909 $ ( 3,614 ) $ 5,523
−Removed: During the next twelve months, the Company estimates that a net gain of $ 27.6 million, pre-tax, will be reclassified from accumulated other comprehensive income and recorded to interest expense related to these derivative financial instruments.
+Added: During the next 12 months, the Company estimates that a net gain of $ 15.9 million, pre-tax, will be reclassified from accumulated other comprehensive income and recorded to interest expense related to these derivative financial instruments.
Income (loss) before income taxes consisted of the following:
8 unchanged sentences
and foreign income (loss) before income taxes is intercompany interest.
−Removed: Income tax expense (benefit) consisted of the following:
+Added: Income tax expense consisted of the following:
Years ended December 31,
1 unchanged sentence
(In thousands)
−Removed: Current income tax expense (benefit):
+Added: Current income tax expense:
Federal $ 39,421 $ 27,627 $ 13,240
7 unchanged sentences
( 11,716 ) ( 9,644 ) ( 4,996 )
−Removed: Income tax expense (benefit) $ 31,541 $ 19,889 $ ( 11,340 )
−Removed: In 2020, the CARES Act provided a technical correction regarding Qualified Improvement Property (“QIP”) and the election to take bonus depreciation on such property.
−Removed: This correction allowed taxpayers to retroactively accelerate depreciation on QIP.
−Removed: The Federal current and deferred benefit for 2020 included the impact of a $ 10 million acceleration of the tax deduction for depreciation related to 2019 additions.
+Added: Income tax expense $ 45,409 $ 31,541 $ 19,889
The following is a reconciliation of the U.S.
4 unchanged sentences
Federal income tax expense computed at statutory rate $ 25,123 $ 23,558 $ 18,973
−Removed: State income tax expense (benefit) — net of federal income tax 8,008 3,140 ( 4,491 )
+Added: State income tax expense — net of federal income tax 10,041 8,008 3,140
Valuation allowance — net 8,235 3,661 ( 1,836 )
4 unchanged sentences
Change in income tax rate — — 817
−Removed: Global Intangible Low-Taxed Income — — ( 1,418 )
Change to uncertain tax positions — net 741 ( 61 ) 438
Foreign rate differential ( 1,203 ) ( 480 ) 545
−Removed: Income tax expense (benefit) $ 31,541 $ 19,889 $ ( 11,340 )
−Removed: On December 22, 2017, the U.S.
−Removed: federal government enacted comprehensive tax legislation with the Tax Cuts and Jobs Act (“Tax Act”) that made changes to the U.S.
−Removed: tax code impacting the year ended December 31, 2017 and future years.
−Removed: The Tax Act introduced the Global Intangible Low-Taxed Income (“GILTI”) regime.
−Removed: The taxes on GILTI are accounted for as period costs when incurred.
−Removed: Updated GILTI regulations were released by the U.S.
−Removed: Treasury in July 2020 allowing retroactive annual elections to exclude GILTI that is subject to an effective foreign income tax rate exceeding ninety percent of the maximum U.S.
−Removed: corporate tax rate.
+Added: Income tax expense $ 45,409 $ 31,541 $ 19,889
The effective income tax rate for 2023 was 38.0 %.
−Removed: Based on the Company’s jurisdictional mix of taxable income, there was no additional federal income tax expense attributable to GILTI for 2022.
+Added: In 2023, income tax expense was increased by a total of $ 2.9 million, with $ 0.6 million in state income tax, for the net shortfall tax expense associated with the exercise or expiration of stock options and vesting of restricted stock.
+Added: The effective income tax rate for 2022 was 28.1 %.
In 2022, income tax expense was reduced by $ 2.0 million, net with a $ 0.5 million tax benefit in state income tax, for the net excess tax benefit associated with the exercise or expiration of stock options and vesting of restricted stock.
The effective income tax rate for 2021 was 22.0 %.
−Removed: Based on the Company's jurisdictional mix of taxable income, there was no additional federal income tax expense attributable to GILTI for 2021.
Income tax expense was reduced by $ 7.8 million in 2021 for the excess tax benefits associated with the exercise of stock options and vesting of restricted stock.
−Removed: The effective income tax rate for 2020 was a benefit of ( 72.5 )%, and includes current tax benefit of $ 3.4 million related to prior years and a $ 1.4 million retroactive reduction of GILTI for taxable years 2018 and 2019 for the high-tax exclusion that was included in the updated GILTI regulations.
−Removed: Based on the Company's jurisdiction mix of taxable income, there was no additional federal income tax expense attributable to GILTI for 2020.
−Removed: Income tax expense was reduced by $ 16.2 million in 2020 for the excess tax benefits associated with the exercise of stock options and vesting of restricted stock.
+Added: The Organization for Economic Cooperation and Development introduced a framework to implement a global 15% minimum corporate tax (“Pillar Two”).
+Added: The European Union issued a directive to its member states to enact the Pillar Two in their local laws effective after December 2023.
+Added: A number of other countries are expected to also implement similar legislation with effective dates in the future.
+Added: The Company is continuing to evaluate the future impact of Pillar Two in the jurisdictions in which the Company operates.
Significant components of the Company’s net deferred tax liability were as follows:
14 unchanged sentences
Intangible assets ( 78,993 ) ( 84,469 )
−Removed: Hedge/swap liability ( 12,653 ) —
+Added: Cash flow hedges ( 6,228 ) ( 12,653 )
Depreciation ( 14,744 ) ( 22,929 )
1 unchanged sentence
Net deferred tax liability $ ( 33,155 ) $ ( 50,739 )
−Removed: At December 31, 2021, the net deferred tax liability of $ 48.4 million includes foreign deferred tax assets of $ 0.1 million, which are included in other assets in the consolidated balance sheet.
−Removed: At December 31, 2022, the Company has foreign net operating loss carryforwards of $ 27.8 million, all of which has a valuation allowance offsetting the related deferred tax asset.
+Added: At December 31, 2023 and 2022, the Company had foreign net operating loss carryforwards of $ 35.6 million and $ 27.8 million, respectively, all of which had a valuation allowance offsetting the related deferred tax asset.
These net operating losses can be carried forward indefinitely.
−Removed: During the year ended December 31, 2022, the Company recorded additional valuation allowance of $ 9.7 million on foreign deferred tax assets, with $ 6.0 million recorded as part of acquisition accounting.
+Added: During the year ended December 31, 2023, the Company recorded a net additional valuation allowance of $ 8.2 million on foreign deferred tax assets, resulting in an $ 18.2 million total valuation allowance.
The Company assesses available positive and negative evidence to estimate if there is sufficient future taxable income (inclusive of reversing temporary differences) to recover the existing deferred tax assets.
Based on the weight of evidence, the Company determined that it was more likely than not that a portion of the deferred tax assets would not be realized.
−Removed: A $ 0.2 million valuation allowance remains on U.S.
−Removed: deferred tax assets as of December 31, 2022.
−Removed: During the year ended December 31, 2021, the Company released a valuation allowance on $ 1.8 million on foreign deferred tax assets.
+Added: During the year ended December 31, 2023, the Company released a valuation allowance of $ 0.2 million on a U.S.
+Added: deferred tax asset.
+Added: During the year ended December 31, 2022, the Company recorded additional valuation allowance of $ 9.7 million on foreign deferred tax assets, with $ 6.0 million recorded as part of acquisition accounting.
A $ 0.2 million valuation allowance remained on U.S.
2 unchanged sentences
subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings.
−Removed: The Company has not recorded a deferred tax liability of approximately $ 1.1 million related to the state taxes and foreign withholding taxes on approximately $ 33.9 million of cumulative undistributed earnings of foreign subsidiaries indefinitely invested outside the United States.
+Added: The Company does not assert permanent reinvestment of earnings through the current year with respect to its Indian subsidiary.
+Added: Where necessary, taxes resulting from foreign distributions of current and accumulated earnings, related to the state taxes and foreign withholding taxes, have been considered in the Company’s provision for income taxes.
Uncertain Tax Positions
8 unchanged sentences
Lapses of statutes of limitations — ( 156 ) ( 270 )
−Removed: Effect of foreign currency adjustments — — ( 60 )
Ending balance $ 2,280 $ 2,084 $ 2,584
1 unchanged sentence
Total interest and penalties accrued as of December 31, 2023 was $ 2.3 million.
+Added: In 2023, the Company increased unrecognized tax benefits by $ 0.2 million for a prior year domestic tax position.
In 2022, the Company reduced unrecognized tax benefits by $ 0.2 million for lapse of statute of limitations, and $ 0.3 million for settlements with certain states.
In 2021, the Company recorded an unrecognized tax benefit of $ 0.3 million and reduced unrecognized tax benefits by $ 0.3 million for lapse of statute of limitations, and $ 0.4 million for settlements with certain states.
−Removed: In 2020, the Company reduced unrecognized tax benefits by $ 0.9 million for lapse of statute of limitations, and recorded an unrecognized tax benefit for prior year tax positions in the U.S.
The total amount of unrecognized tax benefits that if recognized would affect the Company’s effective tax rate is $ 4.6 million, inclusive of interest.
−Removed: The unrecognized tax benefits are not expected to change over the next 12 months.
+Added: The unrecognized tax benefits may change over the next 12 months by $ 4.3 million.
The Company and its domestic subsidiaries are subject to U.S.
2 unchanged sentences
The Company’s filings for the tax years 2020 through 2022 are subject to audit based upon the federal statute of limitations.
−Removed: State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return.
+Added: State income tax returns are generally subject to examination for a period of 3 to 4 years after filing of the respective return and the tax years from 2019 to 2022 are subject to audit.
The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.
−Removed: As of December 31, 2022, there was one income tax audit in process and the tax years from 2018 to 2021 are subject to audit.
The Company is also subject to corporate income tax at its subsidiaries located in the United Kingdom, the Netherlands, Australia, India and Puerto Rico.
−Removed: The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to five years.
+Added: The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from 1 to 6 years.
FAIR VALUE MEASUREMENTS
12 unchanged sentences
As such, the Company’s long-term debt was classified as Level 2.
−Removed: Derivative Financial Instruments — The Company’s derivative financial instruments, comprised of interest rate cap agreements and interest rate swap agreements, are recorded at fair value and estimated using market-standard valuation models.
+Added: Derivative Financial Instruments — The Company’s derivative financial instruments, comprised of interest rate cap agreements, are recorded at fair value and estimated using market-standard valuation models.
Such models project future cash flows and discount the future amounts to a present value using market-based observable inputs.
4 unchanged sentences
The fair value of the derivative financial instruments are classified as Level 2.
−Removed: The Company's interest rate swap agreements matured on October 31, 2021.
+Added: As of December 31, 2023, the fair value of the interest rate cap agreements was $ 29.0 million, which was recorded in other assets on the consolidated balance sheet.
As of December 31, 2022, the fair value of the interest rate cap agreements was $ 54.1 million, of which $ 25.5 million was recorded in prepaid expenses and other current assets and $ 28.6 million was recorded in other assets on the consolidated balance sheet.
−Removed: As of December 31, 2021, the fair value of the interest rate cap agreements was $ 8.8 million and was recorded in other assets on the consolidated balance sheet.
+Added: In 2022, the Company entered into foreign currency forward contracts in connection with an acquisition in Australia completed on July 1, 2022.
During the year ended December 31, 2022, the Company recognized realized losses of $ 5.9 million in relation to these forwards due to fluctuations in the Australian dollar.
8 unchanged sentences
As of December 31, 2022, the fair value of the available-for-sale debt securities was $ 29.6 million, with $ 17.7 million included in prepaid expenses and other current assets and $ 11.9 million in other assets on the consolidated balance sheet.
+Added: At December 31, 2023 and 2022, the amortized cost was $ 24.0 million and $ 29.8 million, respectively.
+Added: The debt securities held at December 31, 2023 had remaining maturities ranging approximately from less than one year to two years .
+Added: Unrealized gains and losses, net of tax, and realized gains and losses, on available-for-sale debt securities were immaterial for the years ended December 31, 2023, 2022 and 2021.
Liabilities for Contingent Consideration — The Company is subject to contingent consideration arrangements in connection with certain business combinations.
3 unchanged sentences
The Company classified the contingent consideration liabilities as a Level 3 fair value measurement due to the lack of observable inputs used in the model.
+Added: During the year ended December 31, 2023, contingent consideration liabilities of $ 0.2 million were paid related to an acquisition completed in 2021.
During the year ended December 31, 2022, contingent consideration liabilities of $ 19.3 million were paid related to acquisitions completed in 2019 and 2021.
−Removed: The contingent consideration liabilities outstanding as of December 31, 2022 related to acquisitions that occurred in 2021.
−Removed: The contingent consideration liabilities outstanding as of December 31, 2021 related to acquisitions that occurred in 2019 and 2021.
+Added: The contingent consideration liabilities outstanding as of December 31, 2023 and December 31, 2022 related to acquisitions that occurred in 2021.
Refer to Note 5, Acquisitions , for additional information.
3 unchanged sentences
Beginning balance $ 8,997 $ 27,474
−Removed: Contingent consideration issued for acquisitions — 7,337
Settlements of contingent consideration liabilities ( 225 ) ( 19,250 )
5 unchanged sentences
During the year ended December 31, 2021, the Company recognized impairment losses of $ 10.6 million , of which $ 9.3 million related to fixed assets and $ 1.3 million related to operating lease right-of-use assets.
−Removed: The impairment losses were included in cost of services on the consolidated statement of income and were allocated to the full service center-based child care segment.
+Added: The impairment losses were included in cost of services on the consolidated statement of income.
+Added: For the year ended December 31, 2023, $ 32.0 million was allocated to the full service center-based child care segment and $ 3.9 million was allocated to the back-up care services segment.
+Added: For years ended December 31, 2022 and December 31, 2021, all impairment losses were allocated to the full service center-based child care segment.
The estimated fair value of the applicable center long-lived assets was based on the fair value of the asset groups, calculated using a discounted cash flow model, with unobservable inputs.
1 unchanged sentence
The Company classified the center long-lived assets as a Level 3 fair value measurement due to the lack of observable inputs used in the model.
−Removed: During the year ended December 31, 2020, the Company recognized a $ 2.1 million impairment loss on an equity investment.
−Removed: The impairment loss was included in cost of services on the consolidated statement of income, which has been allocated to the back-up care segment.
−Removed: The estimated fair value of the equity investment was based on a qualitative assessment that considered the current economic environment, business prospects and transaction information in the entity’s securities, among other factors considered.
−Removed: The Company classified the equity investment as a Level 3 fair value measurement due to the lack of observable inputs.
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
5 unchanged sentences
As of December 31, 2023 and 2022, no shares of preferred stock were outstanding.
−Removed: Issuance of Stock
−Removed: On April 21, 2020, the Company completed the issuance and sale of 2,138,580 shares of common stock, par value $ 0.001 per share, to Durable Capital Master Fund LP at a price of $ 116.90 per share.
−Removed: The Company subsequently filed a registration statement to register the resale of these shares in accordance with the terms of the purchase agreement.
−Removed: The Company received net proceeds from the offering of $ 249.8 million.
Treasury Stock
2 unchanged sentences
The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, under Rule 10b5-1 plans, or by other means in accordance with federal securities laws.
−Removed: During the year ended December 31, 2022, the Company repurchased 2.0 million shares for $ 182.3 million.
+Added: The Company did not repurchase shares during the year ended December 31, 2023.
At December 31, 2023, $ 198.3 million remained available under the repurchase program.
11 unchanged sentences
Stock-based compensation expense generated a deferred income tax benefit of $ 5.6 million, $ 6.5 million, and $ 5.2 million in the years ended December 31, 2023, 2022 and 2021, respectively.
−Removed: The net income tax benefits realized from the exercise or expiration of stock options and vesting of restricted stock in the years ended December 31, 2022, 2021, and 2020 were $ 2.7 million, $ 11.8 million, and $ 20.1 million, respectively, inclusive of net excess tax benefits realized of $ 2.0 million, $ 7.8 million, and $ 16.2 million in the years ended December 31, 2022, 2021, and 2020, respectively.
+Added: For the year ended December 31, 2023, the net income tax shortfall realized from the exercise or expiration of stock options and vesting of restricted stock was $ 2.9 million.
+Added: The income tax benefits realized from the exercise or expiration of stock options and vesting of restricted stock in the years ended December 31, 2022 and 2021 were $ 2.7 million, and $ 11.8 million, respectively, inclusive of net excess tax benefits realized of $ 2.0 million, and $ 7.8 million in the years ended December 31, 2022 and 2021, respectively.
As of December 31, 2023, there was $ 37.2 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested share-based compensation arrangements granted under the Plan.
3 unchanged sentences
Stock Options
−Removed: Stock options granted under the Plan are subject to a service condition and expire in seven years from date of grant or upon termination of the holder’s employment with the Company, unless such termination was due to death, disability or retirement, or unless otherwise determined by the administrator of the Plan.
−Removed: Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant, generally have a requisite service period of five years , and are subject to graded vesting throughout the service term.
+Added: Stock options granted under the Plan are subject to a service condition and generally expire in ten years from date of grant or upon termination of the holder’s employment with the Company, unless such termination was due to death, disability or retirement, or unless otherwise determined by the administrator of the Plan.
+Added: Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant, generally have a requisite service period of three or five years , and are subject to graded vesting throughout the service term.
Stock-based compensation expense for stock options is based on the fair value of the award on the date of grant.
13 unchanged sentences
For grants issued during the years ended December 31, 2023, 2022 and 2021, the expected life of the options was based on historical exercise behavior for similar awards, giving consideration to the contractual terms, vesting schedules, and expectations of future employee behavior.
−Removed: For grants issued during the year ended December 31, 2020, the expected life of the options was calculated using the simplified method.
−Removed: We utilized the simplified method because the Company did not have sufficient historical exercise data over the life of awards to provide a reasonable basis upon which to estimate expected term.
The following table summarizes the stock option activity under the Company’s equity plan for the year ended December 31, 2023:
20 unchanged sentences
All outstanding shares of restricted stock are expected to vest.
−Removed: Cash proceeds from the issuance of restricted stock for the year ended December 31, 2022 were $ 3.1 million, and for each of the years ended December 31, 2021 and 2020 were $ 7.4 million.
+Added: During the year ended December 31, 2023, there were no cash proceeds from the issuance of restricted stock.
+Added: Cash proceeds from the issuance of restricted stock for the years ended December 31, 2022 and 2021 were $ 3.1 million and $ 7.4 million, respectively.
Stock-based compensation expense for restricted stock awards is based on the intrinsic value of the award on the date of grant.
3 unchanged sentences
Non-vested restricted stock shares at January 1, 2023 237,369 $ 79.85
−Removed: Granted 47,984 64.41
Vested ( 106,060 ) 74.37
+Added: Forfeited ( 7,855 ) 80.43
Non-vested restricted stock shares at December 31, 2023 123,454 $ 76.83 $ 2.7
The fair value of restricted shares vested during the years ended December 31, 2023, 2022, and 2021 was $ 7.9 million, $ 4.0 million, and $ 5.2 million, respectively.
+Added: There were no restricted stock awards granted during the year ended December 31, 2023.
The weighted average grant date fair value of restricted shares granted during the years ended December 31, 2022 and 2021 was $ 64.41 and $ 81.80 , respectively.
1 unchanged sentence
The awards allow for the issuance of a share of the Company’s common stock for each unit upon vesting.
−Removed: Restricted stock units awarded to members of the board of directors as allowed under the Plan and are vested upon award.
+Added: Restricted stock units are awarded to members of the board of directors as allowed under the Plan and are vested upon award.
The awards allow for the issuance of a share of the Company’s common stock for each unit upon the earliest of termination of service as a member of the board of directors or five years after the date of the award.
10 unchanged sentences
Performance restricted stock units are awarded to certain employees as allowed under the Plan and vest upon certain performance conditions being met.
−Removed: The awards allow for the issuance of a share of the Company’s common stock for each unit upon the achievement of stated performance goals, which are generally within five years from the date of the award.
+Added: The awards allow for the issuance of a share of the Company’s common stock for each unit upon the achievement of stated performance goals, which are generally three years from the date of the award.
The fair value of performance restricted stock unit awards is the closing market price of the Company’s common stock at the date of grant.
3 unchanged sentences
Performance restricted stock units at January 1, 2023 10,000 $ 148.70
+Added: Granted 32,724 79.07
Forfeited ( 10,000 ) 148.70
Performance restricted stock units at December 31, 2023 32,724 $ 79.07 $ 3.1
−Removed: There were no performance restricted stock units granted during the year ended December 31, 2022.
The weighted average grant date fair value of performance restricted stock units granted during the years ended December 31, 2023 and 2021 was $ 79.07 and $ 142.35 , respectively.
−Removed: As of December 31, 2022, the performance restricted stock units were not deemed probable of vesting.
+Added: There were no performance restricted stock units granted during the year ended December 31, 2022.
EARNINGS PER SHARE
28 unchanged sentences
Common stock $ 1.28 $ 1.37 $ 1.15
−Removed: Options outstanding to purchase 2.0 million shares of common stock were excluded from diluted earnings per share for the year ended December 31, 2022, and 0.9 million shares of common stock were excluded from diluted earnings per share for both the years ended December 31, 2021 and 2020, since their effect was anti-dilutive.
+Added: Options outstanding to purchase 1.8 million, 2.0 million and 0.9 million shares of common stock were excluded from diluted earnings per share for the years ended December 31, 2023, 2022 and 2021, respectively, since their effect was anti-dilutive.
These options may become dilutive in the future.
17 unchanged sentences
The full service center-based child care segment includes the traditional center-based early education and child care, preschool, and elementary education.
−Removed: The Company’s back-up care segment consists of center-based back-up child care, in-home care for children and adult/elder dependents, school-age camps, virtual tutoring, pet care and self-sourced reimbursed care.
−Removed: The Company’s educational advisory and other services segment consists of tuition assistance and student loan repayment program management, workforce education, related educational advising, college advisory services, and an online marketplace for families and caregivers, which have been aggregated.
+Added: The Company’s back-up care segment consists of center-based back-up child care, in-home care for children and adult/elder dependents, school-age camps, tutoring, pet care and self-sourced reimbursed care.
+Added: The Company’s educational advisory and other services segment consists of tuition assistance and student loan repayment program management, workforce education, related educational advising, college advisory services, and Sittercity, an online marketplace for families and caregivers, which have been aggregated.
The Company and its chief operating decision maker evaluate performance based on revenue and income from operations.
2 unchanged sentences
therefore, no segment asset information is produced or included herein.
+Added: In fiscal year 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: As a result, effective January 1, 2024, the back-up care reportable segment will now include the Sittercity operations.
Revenue and income (loss) from operations by reportable segment were as follows:
8 unchanged sentences
Revenue $ 1,493,758 $ 409,554 $ 117,175 $ 2,020,487
−Removed: Income (loss) from operations (2)
+Added: Income from operations (2)
12,937 118,788 25,860 157,585
3 unchanged sentences
( 8,431 ) 115,173 22,276 129,018
−Removed: (1) For the year ended December 31, 2022, income from operations for the full service center-based child care segment included $ 14.1 million of impairment losses related to fixed assets and operating lease right-of-use assets, $ 9.2 million of transaction costs related to acquisitions, and $ 1.9 million of costs incurred in relation to a cyber incident.
+Added: (1) For the year ended December 31, 2023, income from operations for the full-service center-based child care segment included $ 32.0 million of impairment losses for fixed assets and operating lease right-of-use assets and $ 1.5 million of value-added tax expense related to prior periods, and income from operations for the back-up care segment included $ 3.9 million of impairment losses for fixed assets and operating lease right-of-use assets and $ 4.0 million of value-added tax expense related to prior periods.
+Added: Refer to Note 14, Fair Value Measurements , for additional information on impairment losses and Note 2, Summary of Significant Accounting Policies , for additional information on the value-added tax expense related to prior periods.
+Added: (2) For the year ended December 31, 2022, income from operations for the full service center-based child care segment included $ 14.1 million of impairment losses related to fixed assets and operating lease right-of-use assets, $ 9.2 million of transaction costs related to acquisitions, and $ 1.9 million of costs incurred in relation to a cybersecurity incident.
Refer to Note 14, Fair Value Measurements , for additional information on impairment losses.
1 unchanged sentence
Refer to Note 14, Fair Value Measurements , for additional information on impairment losses.
−Removed: (3) For the year ended December 31, 2020, loss from operations for the full service center-based child care segment included $ 26.2 million of impairment losses related to fixed assets and operating lease right-of-use assets, and income from operations for the back-up care segment included $ 2.1 million of impairment losses related to an equity investment.
−Removed: Additionally, loss from operations in the full service center-based child care segment included $ 6.6 million in costs primarily associated with the closure of centers, including related severance and facilities costs.
−Removed: Refer to Note 14, Fair Value Measurements , for additional information on impairment losses.
Refer to Note 3, Revenue Recognition , for revenue by geographic region.
5 unchanged sentences
Total fixed assets $ 579,296 $ 571,471 $ 598,134
−Removed: The classification “North America” is comprised of the Company’s United States, Canada and Puerto Rico operations and the classification “International” includes the Company’s United Kingdom, Netherlands, Australia and India operations.
−Removed: On July 1, 2022, the Company acquired Only About Children, an operator of approximately 75 child care centers in Australia.
−Removed: Refer to Note 5, Acquisitions , for additional information.
−Removed: During the year ended December 31, 2020, the Company divested its child care center business and ceased to operate its two centers in Canada.
−Removed: Fixed assets in the United States were substantially all of the fixed assets in North America, and fixed assets in the United Kingdom were $ 186.5 million, $ 213.5 million, and $ 225.0 million at December 31, 2022, 2021, and 2020, respectively.
−Removed: Fixed assets associated with other countries were less than 10% of total fixed assets.
+Added: The classification “North America” is comprised of the Company’s operations in the United States (including Puerto Rico) and the classification “International” includes the Company’s operations in the United Kingdom, the Netherlands, Australia and India.
+Added: All of the fixed assets in North America were located in the United States, and fixed assets located in the United Kingdom were $ 201.9 million, $ 186.5 million, and $ 213.5 million at December 31, 2023, 2022, and 2021, respectively.
+Added: Fixed assets associated with each of the other countries in which the Company operates were less than 10% of total fixed assets.
EMPLOYEE BENEFIT PLANS
14 unchanged sentences
NQDC Plan liabilities, included in other current and long-term liabilities in the consolidated balance sheet, were $ 1.5 million and $ 17.4 million at December 31, 2023, respectively.
−Removed: At December 31, 2021, total investments included in prepaid expenses and other current assets and in other assets in the consolidated balance sheet were $ 1.0 million, and $ 16.1 million.
−Removed: respectively.
+Added: At December 31, 2022, total investments included in prepaid expenses and other current assets and in other assets in the consolidated balance sheet were $ 0.7 million, and $ 16.0 million, respectively.
NQDC Plan liabilities, included in other current and long-term liabilities in the consolidated balance sheet, were $ 0.7 million and $ 16.1 million at December 31, 2022, respectively.
1 unchanged sentence
Letters of Credit
−Removed: The Company has 142 letters of credit outstanding used to guarantee certain rent payments for up to $ 12.3 million.
−Removed: These letters of credit are secured by cash deposits included in other assets in the consolidated balance sheet.
−Removed: Additionally, letters of credit of $ 5.2 million reduce availability in the revolving credit facility.
+Added: At December 31, 2023, t he Company had 56 letters of credit outstanding used to guarantee certain rent payments for up to $ 2.4 million.
+Added: These letters of credit are secured by cash deposits, of which $ 2.1 million is included in other assets and $ 0.3 million is included in prepaid expenses and other current assets in the consolidated balance sheet.
+Added: Additionally, letters of credit of $ 19.3 million reduced availability in the revolving credit facility.
No amounts have been drawn against these letters of credit.
11 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.