32 unchanged sentences
Critical Audit Matter Description
−Removed: 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 provides center-based early education and child care, back-up care, and educational advisory services to customers, which primarily consist of employer sponsors and parents.
The Company generates revenue from services based on the nature of the promise and the consideration specified in contracts with customers.
6 unchanged sentences
Our audit procedures related to revenue included the following, among others:
−Removed: • 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.
+Added: • We tested the effectiveness of controls over the recognition of revenue.
+Added: • With the assistance of our IT specialists, we performed the following:
+Added: ◦ Identified the significant systems used to process revenue transactions and tested the effectiveness of general IT controls over each of these systems, including testing of user access controls, change management controls, and IT operations controls.
+Added: ◦ Tested the effectiveness of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.
• We performed analytical procedures to test the reasonableness of recorded balances.
2 unchanged sentences
◦ Tested the amounts recognized to source documents and tested the mathematical accuracy of the recorded revenue.
−Removed: ◦ Performed procedures to test the transactions were recorded in the appropriate accounting period.
+Added: • We performed procedures to test that transactions were recorded in the appropriate accounting period.
/s/ Deloitte & Touche LLP
20 unchanged sentences
Current portion of long-term debt $ 28,500 $ 18,500
−Removed: Borrowings under revolving credit facility — 84,000
Accounts payable and accrued expenses 304,541 259,077
35 unchanged sentences
Loss on foreign currency forward contracts — — ( 5,917 )
−Removed: Loss on extinguishment of debt — — ( 2,571 )
Interest expense — net ( 48,761 ) ( 51,609 ) ( 39,486 )
43 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
3 unchanged sentences
Shares received in net share settlement of stock option exercises and vesting of restricted stock ( 43,831 ) — ( 5,350 ) ( 5,350 )
−Removed: Other comprehensive income 11,528 11,528
+Added: Purchase of treasury stock ( 85,035 ) ( 85,035 )
+Added: Retirement of treasury stock ( 754,090 ) ( 1 ) ( 85,034 ) 85,035 —
+Added: Other comprehensive loss ( 51,194 ) ( 51,194 )
Net income 140,191 140,191
10 unchanged sentences
Depreciation and amortization 97,918 110,681 106,142
−Removed: Amortization of original issue discount and deferred financing costs, and other non-cash items 9,752 2,114 2,363
−Removed: Impairment losses 35,903 14,061 10,582
−Removed: Loss on extinguishment of debt — — 2,571
+Added: Impairment losses and other non-cash items 41,379 48,399 17,480
Loss on foreign currency forward contracts — — 5,917
1 unchanged sentence
Deferred income taxes ( 9,929 ) ( 11,716 ) ( 9,644 )
−Removed: Changes in fair value of contingent consideration 2,744 1,305 7,338
Changes in assets and liabilities:
11 unchanged sentences
Proceeds from the disposal of fixed assets 2,036 225 10,547
−Removed: Proceeds from the maturity of debt securities and sale of other investments 19,538 23,392 24,080
Purchases of debt securities and other investments ( 52,597 ) ( 16,050 ) ( 25,106 )
+Added: Proceeds from debt securities and other investments 38,375 19,538 23,392
Payments and settlements for acquisitions — net of cash acquired ( 8,267 ) ( 39,629 ) ( 210,409 )
2 unchanged sentences
CASH FLOWS FROM FINANCING ACTIVITIES:
−Removed: Extinguishment of long-term debt — — ( 1,026,625 )
−Removed: Borrowings of long-term debt, net of issuance costs of $ 7.7 million
Borrowings under revolving credit facility 156,500 402,500 295,000
1 unchanged sentence
Principal payments of long-term debt ( 17,000 ) ( 16,000 ) ( 16,000 )
−Removed: Payments for debt issuance costs — — ( 2,057 )
−Removed: Purchase of treasury stock — ( 182,570 ) ( 213,830 )
−Removed: Proceeds from issuance of common stock upon exercise of options and restricted stock upon purchase 11,184 13,235 37,503
+Added: Purchases of treasury stock ( 84,597 ) — ( 182,570 )
+Added: Proceeds from issuance of common stock upon exercise of options 27,005 11,184 13,235
Taxes paid related to the net share settlement of stock options and restricted stock ( 5,350 ) ( 2,592 ) ( 6,138 )
26 unchanged sentences
Restricted stock reclassified from other current liabilities to equity upon vesting $ 6,488 $ 8,451 $ 4,030
−Removed: Treasury stock purchases in other current liabilities $ — $ — $ 228
See accompanying notes to consolidated financial statements.
2 unchanged sentences
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, and India.
−Removed: 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.
+Added: (“Bright Horizons” or the “Company”) provides center-based early education and child care, back-up child and senior care, tuition assistance and student loan repayment program management, and educational advisory services for employers and families in the United States, the United Kingdom, the Netherlands, Australia and India.
+Added: 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 early education and child care, back-up and family 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.
As of December 31, 2024, the Company operated 1,019 early education and child care centers.
−Removed: On July 1, 2022, the Company acquired Only About Children (“Only About Children”), an operator of 75 child care centers in Australia.
−Removed: Refer to Note 5, Acquisitions , for additional information.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1 unchanged sentence
The Company’s significant accounting policies are described below.
+Added: Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.
+Added: Segment information for 2023 and 2022 has been recast to conform to the current year presentation.
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.
21 unchanged sentences
Under this system, outstanding checks may be in excess of the cash balances at certain banks, creating book overdrafts.
−Removed: 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, 2022, there were $ 8.6 million in book overdrafts.
+Added: As of December 31, 2024 and 2023, book overdrafts of $ 6.6 million and $ 9.0 million, respectively, were included in accounts payable and accrued expenses on the consolidated balance sheet.
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.
34 unchanged sentences
In performing the quantitative analysis, the Company compares the fair value of the reporting unit with its carrying amount, including goodwill.
−Removed: Fair value for each reporting unit is determined by estimating the present value of expected future cash flows, which are forecasted for each of the next ten years , applying a long-term growth rate to the final year, discounted using the applicable discount rate.
+Added: Fair value for each reporting unit is determined by estimating the present value of expected future cash flows, which are forecasted for each of the next 10 years, applying a long-term growth rate to the final year, discounted using the applicable discount rate.
If the fair value of the Company’s reporting unit exceeds its carrying amount, the goodwill of the reporting unit is considered not impaired.
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 2023 and 2022 annual impairment reviews as of October 1, 2023 and 2022, respectively.
+Added: The Company performed a quantitative assessment for one reporting unit and a qualitative assessment for the remaining reporting units in the 2024 annual impairment review as of October 1, 2024.
+Added: The Company performed a quantitative assessment for all reporting units in the 2023 annual impairment review as of October 1, 2023.
+Added: The Company recorded impairment charges of $ 4.2 million in the year ended December 31, 2024, which was included in selling, general and administrative expenses.
No goodwill impairment charges were recorded in the years ended December 31, 2023 or 2022.
11 unchanged sentences
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.
−Removed: 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.
+Added: As a result of this process, during the years ended December 31, 2024, 2023, and 2022, the Company reviewed long-lived assets, noting that certain asset groups were not recoverable, and recognized impairment losses of $ 30.9 million, $ 35.9 million, and $ 14.1 million, respectively, on fixed assets, operating lease right-of-use assets and definite-lived intangible assets for asset groups where the carrying amount exceeded the fair value.
+Added: Impairment losses were included in cost of services.
Refer to Note 14, Fair Value Measurements , for additional information.
7 unchanged sentences
(1) a cost-plus model, where the Company is paid a fee by an employer client for managing a child care center on a cost-plus basis, and (2) a profit and loss (“P&L”) model, where the Company assumes the financial risk of operating a child care center and provides care on either an exclusive or priority enrollment basis to the employees of an employer sponsor, as well as to families in the surrounding community.
−Removed: In both the cost-plus and sponsor P&L models, the employer sponsor retains responsibility for the development of a new child care center (which is generally owned or leased by the sponsor), as well as ongoing maintenance and repairs.
+Added: In both the cost-plus model and P&L model sponsored by an employer, the employer sponsor retains responsibility for the development of a new child care center (which is generally owned or leased by the sponsor), as well as ongoing maintenance and repairs.
In addition, employer sponsors typically provide subsidies for the ongoing provision of child care services to their employees.
1 unchanged sentence
Revenue generated from full service center-based child care services is primarily comprised of monthly tuition paid by parents.
−Removed: Tuition is determined based on the age and developmental level of the child, the child’s attendance schedule, and geographic location of the facility.
+Added: Tuition is determined based on the age and developmental level of the child, the child’s attendance schedule, and the geographic location of the facility.
The full service child care offering provided to parents represents a series of distinct services that are substantially the same and have the same pattern of transfer to the customer over time, which transfers daily.
12 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, tutoring, pet care and self-sourced reimbursed care.
−Removed: 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.
+Added: Back-up care services consist of center-based back-up child care, in-home child and senior care, school-age programs (including camps and tutoring), pet care, self-sourced reimbursed care and Sittercity, an online marketplace for families and caregivers.
+Added: The Company provides back-up care services through the Company’s early education and child care centers, school-age programs and in-home care providers, as well as through the back-up care network and through other providers.
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.
5 unchanged sentences
Allocation of the consideration earned as the service is performed is consistent with the overall allocation objective.
−Removed: Revenue for self-sourced reimbursed care and pet care 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, and is recognized in the month the transactions are processed.
−Removed: Educational Advisory and Other Services
−Removed: The Company’s educational advisory services consist of tuition assistance and student loan repayment program management, workforce education, and related educational consulting services (“EdAssist”), and college advisory services (“College Coach”).
+Added: Revenue for self-sourced reimbursed care and certain pet care 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, and is recognized in the month the transactions are processed.
+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 includes the Sittercity operations.
+Added: Revenue is primarily generated from subscriptions, comprised of fixed fees for the subscription period and, to a lesser extent, variable transaction fees collected from users at the point of service.
+Added: 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: Educational Advisory Services
+Added: The Company’s educational advisory services consist of tuition assistance and student loan repayment program management, workforce education, and related educational consulting services (“EdAssist”), and college admissions and college financing advisory services (“College Coach”).
Educational advisory services revenue is primarily comprised of fixed and variable fees paid by employer clients for program management, coaching, and subscription of content, and, to a lesser extent, retail fees collected from users at the point of service.
2 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 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.
−Removed: Revenue for College Coach is recognized over the contract term as college advisory services are provided and customers receive the benefit.
−Removed: Other services consist of the Sittercity business, an online marketplace for families and caregivers.
−Removed: Revenue is primarily generated from subscriptions, comprised of fixed fees for the subscription period and, to a lesser extent, variable transaction fees collected from users at the point of service.
−Removed: 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.
−Removed: 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.
−Removed: As a result, effective January 1, 2024, the back-up care reportable segment will now include the Sittercity operations.
+Added: Additionally, revenue for tuition assistance and student loan repayments is based on a fee earned for transactions 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.
+Added: Revenue for College Coach is recognized over the contract term as college admissions counseling services and other advisory services are provided and customers receive the benefit.
Significant Judgments and Estimates
38 unchanged sentences
The Company accounts for its interests in a provider of full service center-based child care and back-up care services in Germany and a provider of early education and tutoring in the Netherlands using the equity method.
+Added: In April 2024, the Company acquired the remaining shares outstanding of the provider of early education and tutoring in the Netherlands resulting in control and consolidation of the investment previously accounted for under the equity method.
+Added: Refer to Note 5, Acquisitions , for additional information on this acquisition.
The equity method investments are included in other assets on the consolidated balance sheet and, as of December 31, 2024 and 2023, the investment balance was $ 5.5 million and $ 9.4 million, respectively.
The impact on the results of operations was immaterial for the years ended December 31, 2024, 2023 and 2022.
−Removed: Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, consist of U.S.
+Added: Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, primarily consist of U.S.
Treasury and U.S.
−Removed: government agency securities and certificates of deposits.
+Added: government agency securities, corporate bonds and certificates of deposits.
These securities are held in escrow by the Company’s wholly-owned captive insurance company and were purchased with restricted cash.
28 unchanged sentences
Therefore, taxes are not provided for the related currency translation adjustments.
−Removed: Earnings Per Share — Earnings per share is calculated using the two-class method, which requires the allocation of earnings to each class of common stock outstanding and to unvested participating shares.
−Removed: Unvested participating shares are unvested stock-based payment awards of restricted stock that participate equally in dividends with common stock, but do not participate in losses.
−Removed: Net income available to stockholders is allocated on a pro rata basis to each class of common stock outstanding and to unvested participating shares as if all of the earnings for the period had been distributed.
−Removed: Basic earnings per share is calculated by dividing the allocated net income by the weighted-average common shares outstanding.
−Removed: 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.
+Added: Earnings Per Share — Earnings per share is calculated using the treasury method for the year ended December 31, 2024 and the two-class method for the years ended December 31, 2023 and 2022.
+Added: Basic earnings per share is calculated by dividing the net income available to stockholders by the weighted-average common shares outstanding.
+Added: Diluted earnings per share is calculated by dividing the net income available to stockholders by the weighted-average common shares and potentially dilutive securities outstanding during the period.
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.
5 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, 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: During the years ended December 31, 2023 and 2022, funding received from pandemic-related government support programs reduced center cost of services by $ 49.4 million and $ 86.8 million, respectively, of which $ 17.5 million and $ 31.7 million, respectively, reduced the operating subsidies paid by employers for the related child care centers.
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.
−Removed: 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.
−Removed: Amounts outstanding as of December 31, 2023 were not material.
REVENUE RECOGNITION
3 unchanged sentences
child care Back-up care Educational
−Removed: other services Total
+Added: advisory services Total
(In thousands)
17 unchanged sentences
Refer to Note 5, Acquisitions , for additional information.
+Added: Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.
+Added: Segment information for 2023 and 2022 has been recast to conform to the current year presentation.
Deferred Revenue
1 unchanged sentence
The Company recognized $ 268.3 million, $ 220.1 million, and $ 254.2 million as revenue in the years ended December 31, 2024, 2023, and 2022, respectively, which was included in the deferred revenue balance at the beginning of each respective year.
−Removed: 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.
+Added: There were no significant changes in deferred revenue during the years ended December 31, 2024, 2023 and 2022 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 in 2022.
Refer to Note 5, Acquisitions , for additional information.
31 unchanged sentences
Long-term operating lease liabilities $ 743,562
−Removed: As of December 31, 2023, the Company had entered into additional operating leases that have not yet commenced with total fixed payment obligations of $ 18.7 million.
−Removed: The leases are expected to commence in fiscal 2024 and have initial lease terms of approximately 12 to 15 years.
+Added: As of December 31, 2024, the Company did no t have any material operating leases that have not yet commenced.
The Company’s growth strategy includes expansion through strategic and synergistic acquisitions.
1 unchanged sentence
2024 Acquisitions
−Removed: 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.
−Removed: 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.
−Removed: 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 April 2024, the Company acquired the remaining shares outstanding of a provider of early education and tutoring in the Netherlands for cash consideration of $ 1.3 million and contingent consideration of $ 0.7 million payable in 2026 and 2027, resulting in control and consolidation of an investment previously accounted for under the equity method.
+Added: The Company had previously made investments totaling $ 8.4 million in this entity.
+Added: The Company recorded goodwill of $ 10.2 million related to the full service center-based child care segment, which will not be deductible for tax purposes.
+Added: In addition, the Company recorded intangible assets of $ 0.7 million that will be amortized over three to five years .
+Added: Additionally, during the year ended December 31, 2024, the Company acquired two centers in Australia in two separate business acquisitions, which were each accounted for as a business combination.
+Added: The businesses were acquired for aggregate cash consideration of $ 7.2 million.
+Added: The Company recorded goodwill of $ 6.8 million related to the full service center-based child care segment in relation to these acquisitions, which will not be deductible for tax purposes.
In addition, the Company recorded intangible assets of $ 0.9 million that will be amortized over four years .
3 unchanged sentences
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, 2024, the Company paid deferred consideration of $ 106.5 million related to the 2022 acquisition of Only About Children.
+Added: The acquisition date fair value of the deferred consideration of $ 97.7 million is presented as cash used in financing activities in the consolidated statement of cash flows while the accrued interest is presented as cash used in operating activities.
+Added: During the year ended December 31, 2024, the Company paid contingent consideration of $ 14.3 million related to a 2021 acquisition.
+Added: The acquisition date fair value of the contingent consideration of $ 6.2 million is presented as cash used in financing activities in the consolidated statement of cash flows while the change in fair value is presented as cash used in operating activities.
+Added: 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 was 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 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, 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.
1 unchanged sentence
Only About Children
−Removed: 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 paid an additional USD$ 106.5 million 18 months after closing, in January 2024, in accordance with the terms of the purchase agreement.
−Removed: 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: 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 AU$ 450 million (USD$ 310 million), which was accounted for as a business combination.
+Added: The Company paid approximately AU$ 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 AU$ 2.6 million (USD$ 1.8 million).
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.
35 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.
+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.
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.
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.
−Removed: 2021 Acquisitions
−Removed: 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.
−Removed: 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.
−Removed: Additionally, the Company is subject to contingent consideration payments for two of these acquisitions, and recorded a preliminary fair value estimate of $ 7.3 million in relation to these contingent consideration arrangements at acquisition.
−Removed: Contingent consideration of up to $ 1.2 million may be payable within one year from the date of acquisition if certain performance targets are met for one of the acquisitions, and contingent consideration is payable in 2026 based on certain financial metrics for the other acquisition.
−Removed: The Company recorded goodwill of $ 39.5 million related to the full service center-based child care segment, of which $ 3.4 million will be deductible for tax purposes, and $ 14.6 million related to the back-up care segment, all of which will be deductible for tax purposes.
−Removed: In addition, the Company recorded intangible assets of $ 5.7 million that will be amortized over five years , as well as fixed assets of $ 10.1 million in relation to these acquisitions.
−Removed: 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.
GOODWILL AND INTANGIBLE ASSETS
1 unchanged sentence
child care Back-up care Educational
−Removed: other services Total
+Added: advisory services Total
(In thousands)
3 unchanged sentences
Adjustments to prior year acquisitions
+Added: 1,202 — — 1,202
Effect of foreign currency translation
1 unchanged sentence
Balance at December 31, 2023 1,539,264 207,298 39,843 1,786,405
+Added: Change in reportable segments — 2,167 ( 2,167 ) —
Additions from acquisitions 16,983 — — 16,983
Adjustments to prior year acquisitions 110 — — 110
+Added: Impairments ( 4,179 ) — — ( 4,179 )
Effect of foreign currency translation ( 36,259 ) ( 377 ) — ( 36,636 )
Balance at December 31, 2024 $ 1,515,919 $ 209,088 $ 37,676 $ 1,762,683
+Added: Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: Goodwill impairments in the year ended December 31, 2024 related to an immaterial foreign reporting unit specializing in tutoring services.
The Company also has intangible assets, which consisted of the following at December 31, 2024 and 2023:
25 unchanged sentences
(In thousands)
−Removed: 2024 $ 18,020
Thereafter 2,270
2 unchanged sentences
(In thousands)
+Added: Insurance related items $ 25,414 $ 7,649
+Added: Prepaid software and licenses 19,285 12,911
Investments in available-for-sale debt securities 11,699 22,005
Restricted cash 11,244 15,756
−Removed: Prepaid software and licenses 12,911 9,272
−Removed: Prepaid insurance 7,649 7,386
−Removed: Prepaid rent and other occupancy costs 6,846 4,411
Prepaid income taxes 9,004 6,049
Interest rate cap derivatives 8,407 —
+Added: Prepaid rent and other occupancy costs 6,084 6,846
Other prepaid expenses and current assets 11,231 22,405
$ 102,368 $ 93,621
−Removed: A portion of the Company’s interest rate cap derivatives matured in 2023.
+Added: Insurance related items include prepayments and recoveries from third party excess insurance policies.
+Added: Additionally, a portion of the Company’s interest rate cap derivatives matures in 2025 and matured in 2023.
Refer to Note 12, Credit Arrangements and Debt Obligations , for additional information on derivatives.
17 unchanged sentences
(In thousands)
−Removed: Interest rate cap derivatives $ 28,968 $ 28,553
Deferred compensation $ 23,541 $ 18,477
+Added: Investments in available-for-sale debt securities 22,022 1,859
Prepaid workers compensation 21,396 16,598
−Removed: Equity-method investments 9,359 7,165
+Added: Interest rate cap derivatives 6,311 28,968
Investments in equity securities
−Removed: Restricted cash 2,127 12,158
−Removed: Investments in available-for-sale debt securities 1,859 11,858
+Added: Equity-method investments 5,469 9,359
Other assets 10,368 11,539
$ 95,194 $ 92,265
−Removed: Restricted cash relates to letters of credit outstanding used to guarantee certain lease arrangements.
−Removed: 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.
+Added: A portion of the Company’s interest rate cap derivatives matures in 2025.
+Added: Refer to Note 12, Credit Arrangements and Debt Obligations , for additional information on derivatives.
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
2 unchanged sentences
Accrued payroll and employee benefits $ 141,973 $ 125,867
−Removed: Accounts payable 24,803 24,648
Accrued insurance liabilities 46,176 22,381
+Added: Accounts payable 32,840 24,803
Accrued provider fees 17,725 22,295
−Removed: Accrued occupancy costs 11,009 11,732
Other accrued expenses 65,827 63,731
4 unchanged sentences
(In thousands)
−Removed: Deferred consideration payable for acquisitions $ 106,500 $ 100,610
Customer amounts on deposit $ 23,734 $ 29,025
+Added: Facility exit costs 4,650 —
+Added: Income taxes payable 3,120 1,039
Liability for unvested restricted stock 2,838 6,488
+Added: Deferred consideration payable for acquisitions — 106,500
Other current liabilities 4,828 5,526
$ 39,170 $ 148,578
−Removed: 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.
−Removed: 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.
+Added: At December 31, 2023, the Company had deferred consideration payable related to the 2022 acquisition of Only About Children.
+Added: These amounts were paid in 2024 in accordance with the terms of the purchase agreement.
Refer to Note 5, Acquisitions , for additional information.
1 unchanged sentence
Senior Secured Credit Facilities
−Removed: The Company’s senior secured credit facilities consist of a $ 600 million term loan B facility (“term loan B”) and a $ 400 million term loan A facility (“term loan A”), collectively the “term loan facilities” or “term loans,” as well as a $ 400 million multi-currency revolving credit facility (“revolving credit facility”).
+Added: The Company’s senior secured credit facilities consist of a $ 600 million term loan B facility (“term loan B”) and a $ 400 million term loan A facility (“term loan A” and, together with term loan B, the “term loan facilities” or “term loans”), as well as a $ 400 million multi-currency revolving credit facility (“revolving credit facility”).
Long-term debt obligations were as follows:
6 unchanged sentences
Long-term debt $ 918,449 $ 944,264
−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.
−Removed: 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 were not modified in the November 2021 amendment.
−Removed: The repayment of the existing term loan was treated as a debt extinguishment.
−Removed: In conjunction with the issuance of the new term loans, the Company incurred $ 7.7 million in fees that have been recorded as a reduction to long term debt and are amortized over the terms of the related debt instruments.
−Removed: A loss on the extinguishment of the existing term loan of $ 2.6 million was recorded in the year ended December 31, 2021, related to the unamortized original issue cost and deferred financing fees that were written off in connection with the November 2021 debt refinancing.
On December 21, 2022, the Company amended its existing senior secured credit facilities to replace the LIBOR-based benchmark rate with a term SOFR benchmark rate, which did not alter the applicable interest rates held in effect prior to the change.
The amendment was treated as a modification and the related transaction costs were expensed as incurred.
−Removed: All borrowings under the credit agreement are subject to variable interest.
+Added: All borrowings under the credit facilities are subject to variable interest.
The effective interest rate for the term loans was 6.21 % and 7.52 % at December 31, 2024 and 2023, respectively, and the weighted average interest rate was 7.25 %, 7.19 %, and 3.75 % for the years ended December 31, 2024, 2023, and 2022, 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 there were no borrowings outstanding under the revolving credit facility at December 31, 2023.
+Added: There were no borrowings outstanding under the revolving credit facility at December 31, 2024 and December 31, 2023.
The weighted average interest rate for the revolving credit facility was 7.81 %, 7.73 %, and 4.86 % for the years ended December 31, 2024, 2023, and 2022, respectively.
+Added: The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected borrowing cycle as rates can vary between under-30 day and over-30 day borrowings.
Term Loan B Facility
−Removed: The seven-year term loan B matures on November 23, 2028 and requires quarterly principal payments equal to 1 % per annum of the original aggregate principal amount of the term loan B, with the remaining principal balance due at maturity.
−Removed: Borrowings under the term loan B facility bear interest at a rate per annum of 1.25 % over the base rate, or 2.25 % over the adjusted term SOFR rate.
−Removed: The base rate is subject to an interest rate floor of 1.50 % and the adjusted term SOFR rate is subject to an interest rate floor of 0.50 %.
+Added: The seven-year term loan B matures on November 23, 2028 and requires quarterly principal payments equal to 1 % per annum of the aggregate principal amount of the term loan B outstanding as of December 11, 2024, the date the Company amended its senior secured credit facility, with the remaining principal balance due at maturity.
+Added: On February 24, 2025, the Company notified its lenders of its intent to voluntarily prepay approximately $ 45 million of the outstanding principal balance on its Term Loan B at the end of the month.
+Added: On December 11, 2024, the Company amended its existing senior secured credit facilities to, among other changes, reduce the applicable interest rates of the term loan B facility by 25 basis points.
+Added: In connection with the terms of this amendment, the applicable interest rate spread for the term loan B facility was further reduced by 25 basis points in January 2025, when the Company received a credit rating upgrade.
+Added: The Company incurred $ 0.8 million in fees associated with this amendment in the year ended December 31, 2024 which were included in selling, general and administrative expenses.
+Added: Effective as of December 11, 2024, borrowings under the amended term loan B facility bear interest at a rate per annum of 1.00 % over the base rate, or 2.00 % over the selected term SOFR rate.
+Added: The base rate is subject to an interest rate floor of 1.50 % and the selected term SOFR rate is subject to an interest rate floor of 0.50 %.
+Added: Prior to the 2024 amendment, borrowings under the term loan B facility bore interest at a rate per annum of 1.25 % over the base rate, or 2.25 % over the adjusted term SOFR rate.
Term Loan A Facility
5 unchanged sentences
The $ 400 million multi-currency revolving credit facility matures on May 26, 2026.
−Removed: 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.
−Removed: 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.
−Removed: 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: At December 31, 2024 and December 31, 2023, there were no borrowings outstanding under the revolving credit facility.
+Added: At December 31, 2024 and December 31, 2023, letters of credit outstanding were $ 15.2 million and $ 19.3 million, respectively, with $ 384.8 million and $ 380.7 million available for borrowing, respectively.
+Added: In January 2024, the Company utilized the revolving credit facility, combined with available cash on hand, to pay deferred consideration of $ 106.5 million related to the 2022 acquisition of Only About Children.
Refer to Note 5, Acquisitions, for additional information.
−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 under the revolving credit facility.
−Removed: 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.
Borrowings under the revolving credit facility bear interest at a rate per annum ranging from 0.50 % to 0.75 % over the base rate, or 1.50 % to 1.75 % over the adjusted term SOFR rate.
The base rate is subject to an interest rate floor of 1.00 % and the adjusted term SOFR rate is subject to an interest rate floor of 0.00 %.
+Added: During the year ended December 31, 2024, the Company entered into a AU$ 5 million uncommitted working capital credit facility in Australia for short term borrowing purposes.
Debt Covenants
−Removed: All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material U.S.
−Removed: subsidiaries.
−Removed: The senior secured credit facilities contain a number of covenants that, among other things and subject to certain exceptions, may restrict the ability of Bright Horizons Family Solutions LLC, the Company’s wholly-owned subsidiary, and its restricted subsidiaries, to:
+Added: All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material United States subsidiaries.
+Added: The senior secured credit facilities contain a number of covenants that, among other things and subject to certain exceptions, may restrict the ability of Bright Horizons Family Solutions LLC (the Borrower), the Company’s wholly-owned subsidiary, and its restricted subsidiaries, to:
make investments, loans, advances and acquisitions;
6 unchanged sentences
and consolidate or merge.
−Removed: In addition, the credit agreement governing the senior secured credit facilities requires Bright Horizons Capital Corp., the Company's direct subsidiary, to be a passive holding company, subject to certain exceptions.
−Removed: The term loan A facility and the revolving credit facility require Bright Horizons Family Solutions LLC, the borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00.
+Added: In addition, the credit agreement governing the senior secured credit facilities requires Bright Horizons Capital Corp.
+Added: (the Guarantor), the Company's direct subsidiary, to be a passive holding company, subject to certain exceptions.
+Added: The Company is the ultimate parent of the Guarantor and the Borrower and the Company’s material assets are held, and operations are conducted, by the Borrower and its subsidiaries.
+Added: The term loan A facility and the revolving credit facility require Bright Horizons Family Solutions LLC as the Borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00.
A breach of the applicable covenant is subject to certain equity cure rights.
7 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 caps to manage a portion of the risk related to changes in cash flows from interest rate movements.
+Added: The Company uses interest rate cap agreements 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.
44 unchanged sentences
The allocation of income before income taxes may fluctuate year to year due to activity within the Bright Horizons consolidated group.
−Removed: Included in the U.S.
−Removed: and foreign income (loss) before income taxes is intercompany interest.
+Added: Included in the United States and foreign income (loss) before income taxes is intercompany interest.
Income tax expense consisted of the following:
23 unchanged sentences
Permanent differences and other — net 4,114 924 ( 733 )
−Removed: Change in contingent consideration — — 1,212
Stock-based compensation 812 2,297 ( 1,513 )
−Removed: Change in income tax rate — — 817
Change to uncertain tax positions — net ( 4,745 ) 741 ( 61 )
2 unchanged sentences
The effective income tax rate for 2024 was 29.1 %.
−Removed: 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: In 2024, income tax expense was increased by a total of $ 1.0 million, with $ 0.2 million in state income tax, for the net shortfall tax expense associated with the exercise or expiration of stock options and vesting of each type of restricted stock.
The effective income tax rate for 2023 was 38.0 %.
−Removed: 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.
+Added: In 2023, income tax expense was increased by $ 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 each type of restricted stock.
The effective income tax rate for 2022 was 28.1 %.
−Removed: 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.
+Added: 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 of stock options and vesting of each type of restricted stock.
The Organization for Economic Cooperation and Development introduced a framework to implement a global 15% minimum corporate tax (“Pillar Two”).
The European Union issued a directive to its member states to enact the Pillar Two in their local laws effective after December 2023.
−Removed: A number of other countries are expected to also implement similar legislation with effective dates in the future.
−Removed: The Company is continuing to evaluate the future impact of Pillar Two in the jurisdictions in which the Company operates.
+Added: A number of other countries have implemented similar legislation with effective dates in the year ended 2024.
+Added: The Company has evaluated the impact of Pillar Two in the jurisdictions in which the Company operates and has determined no additional top-up tax is required.
Significant components of the Company’s net deferred tax liability were as follows:
20 unchanged sentences
These net operating losses can be carried forward indefinitely.
−Removed: 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.
+Added: During the years ended December 31, 2024 and 2023, the Company recorded a net additional valuation allowance of $ 5.5 million and $ 8.2 million, respectively, on foreign deferred tax assets, resulting in total valuation allowances of $ 23.7 million and $ 18.2 million, respectively.
During the year ended December 31, 2023 the Company released a valuation allowance of $ 0.2 million on a U.S.
deferred tax asset.
−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.
−Removed: A $ 0.2 million valuation allowance remained on U.S.
−Removed: deferred tax assets as of December 31, 2022.
The Company considers the earnings of certain non-U.S.
10 unchanged sentences
Settlements — — ( 344 )
−Removed: Reductions for tax positions of prior years — — ( 55 )
Lapses of statutes of limitations ( 2,150 ) — ( 156 )
1 unchanged sentence
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense, which were immaterial for each of the years ended December 31, 2024, 2023 and 2022.
−Removed: Total interest and penalties accrued as of December 31, 2023 was $ 2.3 million.
+Added: Total interest and penalties accrued as of December 31, 2024 was less than $ 0.1 million.
+Added: In 2024, the Company reduced unrecognized tax benefits by $ 2.2 million for lapse of statute of limitations.
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.
−Removed: 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.
The total amount of unrecognized tax benefits that if recognized would affect the Company’s effective tax rate is $ 0.2 million, inclusive of interest.
4 unchanged sentences
The Company’s filings for the tax years 2021 through 2023 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 3 to 4 years after filing of the respective return and the tax years from 2019 to 2022 are subject to audit.
+Added: State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return and the tax years from 2020 to 2023 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.
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 1 to 6 years.
+Added: The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to six years.
FAIR VALUE MEASUREMENTS
10 unchanged sentences
Long-term Debt — The Company’s long-term debt is recorded at adjusted cost, net of original issue discounts and deferred financing costs.
−Removed: The fair value of the Company’s long-term debt is based on current bid prices or prices for similar instruments from active markets, which approximates carrying value.
+Added: The fair value of the Company’s long-term debt is based on current bid prices or prices for similar instruments from active markets.
As such, the Company’s long-term debt was classified as Level 2.
+Added: As of December 31, 2024 and 2023, the estimated fair value approximated the carrying value of long-term debt.
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.
−Removed: Additionally, the fair value of the derivative financial instruments included consideration of credit risk.
+Added: Additionally, the fair value of the interest rate caps included consideration of credit risk.
The Company used a potential future exposure model to estimate this credit valuation adjustment (“CVA”).
The inputs to the CVA were largely based on observable market data, with the exception of certain assumptions regarding credit worthiness.
−Removed: As the magnitude of the CVA was not a significant component of the fair value of the derivative financial instruments, it was not considered a significant input.
−Removed: The fair value of the derivative financial instruments are classified as Level 2.
−Removed: 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.
+Added: As the magnitude of the CVA was not a significant component of the fair value of the interest rate caps, it was not considered a significant input.
+Added: The fair value of the interest rate caps is classified as Level 2.
As of December 31, 2024, the fair value of the interest rate cap agreements was $ 14.7 million, of which $ 8.4 million was recorded in prepaid expenses and other current assets and $ 6.3 million was recorded in other assets on the consolidated balance sheet.
+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.
In 2022, the Company entered into foreign currency forward contracts in connection with an acquisition in Australia completed on July 1, 2022.
1 unchanged sentence
Refer to Note 12, Credit Arrangements and Debt Obligations , for additional information on the foreign currency forward contracts.
−Removed: Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, consist of U.S.
+Added: Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, primarily consist of U.S.
Treasury and U.S.
−Removed: government agency securities and certificates of deposits.
+Added: government agency securities, corporate bonds and certificates of deposits.
These securities are held in escrow by the Company’s wholly-owned captive insurance company and were purchased with restricted cash.
4 unchanged sentences
At December 31, 2024 and 2023, the amortized cost was $ 33.7 million and $ 24.0 million, respectively.
−Removed: The debt securities held at December 31, 2023 had remaining maturities ranging approximately from less than one year to two years .
+Added: The debt securities held at December 31, 2024 had remaining maturities ranging approximately from less than one year to six years .
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, 2024, 2023 and 2022.
4 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.
−Removed: During the year ended December 31, 2023, contingent consideration liabilities of $ 0.2 million were paid related to an acquisition completed in 2021.
−Removed: 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, 2023 and December 31, 2022 related to acquisitions that occurred in 2021.
−Removed: Refer to Note 5, Acquisitions , for additional information.
The following table provides a roll forward of the recurring Level 3 fair value measurements:
2 unchanged sentences
Beginning balance $ 11,516 $ 8,997
+Added: Contingent consideration issued for acquisitions 696 —
Settlements of contingent consideration liabilities ( 14,300 ) ( 225 )
2 unchanged sentences
Ending balance $ 68 $ 11,516
−Removed: Nonrecurring Fair Value Estimates — During the year ended December 31, 2023, the Company recognized impairment losses of $ 35.9 million , of which $ 14.9 million related to fixed assets and $ 21.0 million related to operating lease right-of-use assets.
−Removed: During the year ended December 31, 2022, the Company recognized impairment losses of $ 14.1 million , of which $ 11.3 million related to fixed assets and $ 2.8 million related to operating lease right-of-use assets.
−Removed: 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.
−Removed: 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.
−Removed: For years ended December 31, 2022 and December 31, 2021, all impairment losses were allocated to the full service center-based child care segment.
−Removed: 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.
+Added: During the year ended December 31, 2024, contingent consideration liabilities of $ 14.3 million were paid related to an acquisition completed in 2021, which were originally due in 2026, but settled early and were paid in April 2024.
+Added: During the year ended December 31, 2023, contingent consideration liabilities of $ 0.2 million were paid related to an acquisition completed in 2021.
+Added: The contingent consideration liabilities outstanding as of December 31, 2024 relate to an acquisition completed in 2024.
+Added: Refer to Note 5, Acquisitions , for additional information.
+Added: Nonrecurring Fair Value Estimates — During the years ended December 31, 2024, 2023, and 2022, the Company recognized impairment losses of $ 33.9 million, $ 35.9 million, and $ 14.1 million, respectively, primarily related to fixed assets and operating lease right-of-use assets.
+Added: The estimated fair value of the applicable long-lived assets was based on the fair value of the asset groups, calculated using a discounted cash flow model, with unobservable inputs.
The fair value of the fixed assets was insignificant given the current and expected cash flows for the related centers and the valuation of the lease right-of-use-assets considered the amount a market participant would pay for use of the asset.
−Removed: 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.
+Added: The Company classified the long-lived assets as a Level 3 fair value measurement due to the lack of observable inputs used in the model.
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION
7 unchanged sentences
The board of directors of the Company authorized a share repurchase program of up to $ 400 million of the Company’s outstanding common stock, effective December 16, 2021.
−Removed: The share repurchase program has no expiration date and replaced the prior June 2018 authorization, of which $ 0.2 million remained available thereunder.
+Added: The share repurchase program has no expiration date.
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.
+Added: During the years ended December 31, 2024 and 2022, the Company repurchased 0.8 million shares for $ 84.6 million (resulting in a $ 0.4 million excise tax liability), and 2.0 million shares for $ 182.3 million, respectively.
The Company did not repurchase shares during the year ended December 31, 2023.
At December 31, 2024, $ 113.7 million remained available under the repurchase program.
−Removed: During the year ended December 31, 2022, the Company repurchased 2.0 million shares for $ 182.3 million.
−Removed: During the year ended December 31, 2021, the Company repurchased 1.6 million shares for $ 214.1 million.
Equity Incentive Plan
8 unchanged sentences
Stock-based compensation expense generated a deferred income tax benefit of $ 6.3 million, $ 5.6 million, and $ 6.5 million in the years ended December 31, 2024, 2023, and 2022, respectively.
−Removed: 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.
−Removed: 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.
+Added: The income tax net shortfall (benefit) realized from the exercise or expiration of stock options and vesting of restricted stock in the years ended December 31, 2024, 2023, and 2022 was $ 1.0 million, $ 2.9 million, and $( 2.0 ) million, respectively.
As of December 31, 2024, there was $ 32.0 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 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 granted under the Plan are subject to a service condition and generally expire in 10 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.
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.
13 unchanged sentences
Treasury zero-coupon bonds with maturities similar to those of the expected term of the awards being valued.
−Removed: 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.
+Added: 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.
The following table summarizes the stock option activity under the Company’s equity plan for the year ended December 31, 2024:
13 unchanged sentences
Restricted Stock, Restricted Stock Units, and Performance Restricted Stock Units
−Removed: Restricted stock awards are granted to certain senior managers at the discretion of the board of directors as allowed under the Plan.
+Added: Restricted stock awards are granted to certain employees at the discretion of the board of directors as allowed under the Plan.
Restricted stock awards generally vest on the earliest of the third anniversary of the grant date, a change in control of the Company, or the termination of employment by reason of death or disability, and are accounted for as non-vested stock.
4 unchanged sentences
All outstanding shares of restricted stock are expected to vest.
−Removed: During the year ended December 31, 2023, there were no cash proceeds from the issuance of restricted stock.
−Removed: 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.
+Added: During the years ended December 31, 2024 and 2023, there were no cash proceeds from the issuance of restricted stock.
+Added: Cash proceeds from the issuance of restricted stock for the year ended December 31, 2022 was $ 3.1 million.
Stock-based compensation expense for restricted stock awards is based on the intrinsic value of the award on the date of grant.
4 unchanged sentences
Vested ( 86,170 ) 82.20
−Removed: Forfeited ( 7,855 ) 80.43
Non-vested restricted stock shares at December 31, 2024 37,284 $ 64.41 $ 1.7
The fair value of restricted shares vested during the years ended December 31, 2024, 2023, and 2022 was $ 7.1 million, $ 7.9 million, and $ 4.0 million, respectively.
−Removed: There were no restricted stock awards granted during the year ended December 31, 2023.
−Removed: 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.
+Added: There were no restricted stock awards granted during the years ended December 31, 2024 or 2023.
+Added: The weighted average grant date fair value of restricted shares granted during the year ended December 31, 2022 was $ 64.41 .
Restricted stock units are awarded to certain employees as allowed under the Plan and vest within three years after the date of the award.
The awards allow for the issuance of a share of the Company’s common stock for each unit upon vesting.
−Removed: Restricted stock units are awarded to members of the board of directors as allowed under the Plan and are vested upon award.
−Removed: 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.
+Added: Restricted stock units are also awarded to members of the board of directors as allowed under the Plan and are vested upon award.
+Added: The awards to members of the board of directors 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.
The fair value of restricted stock unit awards is the closing market price of the Company’s common stock at the date of grant.
10 unchanged sentences
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.
−Removed: 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.
+Added: 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 and assumes that the performance conditions will be achieved.
+Added: If such goals are not met, no compensation cost is recognized and any previously recognized expense is reversed.
The following table summarizes the performance restricted stock unit activity under the Company’s equity plan for the year ended December 31, 2024:
3 unchanged sentences
Granted 24,751 115.65
−Removed: Forfeited ( 10,000 ) 148.70
Performance restricted stock units at December 31, 2024 57,475 $ 94.82 $ 6.4
2 unchanged sentences
EARNINGS PER SHARE
−Removed: The following tables sets forth the computation of basic and diluted earnings per share using the two-class method:
+Added: The following tables sets forth the computation of basic and diluted earnings per share:
Years ended December 31,
26 unchanged sentences
Common stock $ 2.40 $ 1.28 $ 1.37
−Removed: 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.
−Removed: These options may become dilutive in the future.
−Removed: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
−Removed: Accumulated other comprehensive income (loss), which is included as a component of stockholders’ equity, is comprised of foreign currency translation adjustments and unrealized gains (losses) on cash flow hedges and investments, net of tax.
+Added: For the year ended December 31, 2024, basic and diluted earnings per share were calculated using the treasury method and for the years ended December 31, 2023 and 2022, basic and diluted earnings per share were calculated using the two-class method.
+Added: Equity awards outstanding to purchase or receive 1.3 million, 1.8 million, and 2.0 million shares of common stock were excluded from diluted earnings per share for the years ended December 31, 2024, 2023, and 2022, respectively, since their effect was anti-dilutive.
+Added: These equity awards may become dilutive in the future.
+Added: ACCUMULATED OTHER COMPREHENSIVE LOSS
+Added: Accumulated other comprehensive loss, which is included as a component of stockholders’ equity, is comprised of foreign currency translation adjustments and unrealized gains (losses) on cash flow hedges and investments, net of tax.
The changes in accumulated other comprehensive income (loss) by component were as follows:
2 unchanged sentences
Balance at January 1, 2023 $ ( 105,138 ) $ 34,738 $ ( 229 ) $ ( 70,629 )
−Removed: Other comprehensive income (loss) before reclassifications — net of tax ( 67,065 ) 38,989 ( 214 ) ( 28,290 )
+Added: Other comprehensive income before reclassifications — net of tax 29,008 4,633 9 33,650
amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 22,271 ( 149 ) 22,122
2 unchanged sentences
Other comprehensive income (loss) before reclassifications — net of tax ( 42,543 ) 6,726 66 ( 35,751 )
−Removed: amounts reclassified from accumulated other comprehensive income — net of tax — 22,271 ( 149 ) 22,122
+Added: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 15,481 ( 38 ) 15,443
Net other comprehensive income (loss) ( 42,543 ) ( 8,755 ) 104 ( 51,194 )
2 unchanged sentences
SEGMENT AND GEOGRAPHIC INFORMATION
−Removed: The Company’s reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory and other services.
+Added: The Company is primarily organized based on the types of services it offers.
+Added: Its reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory services.
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, 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 Sittercity, an online marketplace for families and caregivers, which have been aggregated.
−Removed: The Company and its chief operating decision maker evaluate performance based on revenue and income from operations.
+Added: The Company’s back-up care segment consists of center-based back-up child care, in-home care for children and seniors, school-age programs (including camps and tutoring), pet care, self-sourced reimbursed care, and Sittercity, an online marketplace for families and caregivers.
+Added: The Company’s educational advisory services segment consists of tuition assistance and student loan repayment program management, workforce education, related educational advising, and college admissions counseling services.
+Added: Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.
+Added: The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.
+Added: Segment information for 2023 and 2022 has been recast to conform to the current year presentation.
+Added: Our CEO, who serves as the Chief Operating Decision Maker (“CODM”), is responsible for allocating resources and evaluating performance.
+Added: The CODM assesses segment performance and allocates resources based on factors such as revenue, cost of services, gross profit, and income from operations.
+Added: Additionally, the CODM utilizes segment gross profit and income from operations in the annual budgeting and forecasting process.
+Added: The accounting policies of the segments are the same as those described in Note 2, Summary of Significant Accounting Policies .
Intercompany activity is eliminated in the segment results.
1 unchanged sentence
therefore, no segment asset information is produced or included herein.
−Removed: 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.
−Removed: As a result, effective January 1, 2024, the back-up care reportable segment will now include the Sittercity operations.
−Removed: Revenue and income (loss) from operations by reportable segment were as follows:
+Added: Revenue, cost of services, other expenses and income from operations by reportable segment were as follows:
child care Back-up care Educational
−Removed: other services Total
+Added: services Total
(In thousands)
1 unchanged sentence
Revenue $ 1,961,785 $ 610,112 $ 114,116 $ 2,686,013
+Added: Cost of services 1,685,730 322,151 58,526 2,066,407
+Added: Other expenses (1)
+Added: 222,356 118,350 32,281 372,987
Income from operations (2)
$ 53,699 $ 169,611 $ 23,309 $ 246,619
+Added: Interest expense — net ( 48,761 )
+Added: Income before income tax $ 197,858
Year ended December 31, 2023
Revenue $ 1,780,615 $ 525,910 $ 111,732 $ 2,418,257
+Added: Cost of services 1,542,484 287,294 56,755 1,886,533
+Added: Other expenses (1)
+Added: 228,735 102,912 28,836 360,483
Income from operations (3)
$ 9,396 $ 135,704 $ 26,141 $ 171,241
+Added: Interest expense — net ( 51,609 )
+Added: Income before income tax $ 119,632
Year ended December 31, 2022
Revenue $ 1,493,758 $ 421,462 $ 105,267 $ 2,020,487
−Removed: Income (loss) from operations (3)
+Added: Cost of services 1,269,549 220,823 51,462 1,541,834
+Added: Other expenses (1)
211,272 85,682 24,114 321,068
−Removed: (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: Income from operations (4)
+Added: $ 12,937 $ 114,957 $ 29,691 $ 157,585
+Added: Loss on foreign currency forward contracts ( 5,917 )
+Added: Interest expense — net ( 39,486 )
+Added: Income before income tax $ 112,182
+Added: (1) Other expenses for each reportable segment includes selling, general and administrative expenses and amortization expense.
+Added: (2) For the year ended December 31, 2024, income from operations for the full-service center-based child care segment included $ 32.8 million of impairment losses and $ 0.8 million of other costs incurred in connection with the December 2024 debt refinancing.
+Added: Income from operations for the back-up care segment included $ 1.1 million of impairment losses.
+Added: Refer to Note 14, Fair Value Measurements , for additional information on impairment losses and Note 12, Credit Arrangements and Debt Obligations , for additional information on the debt refinancing.
+Added: (3) 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 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 and $ 4.0 million of value-added tax expense related to prior periods.
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.
−Removed: (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.
−Removed: Refer to Note 14, Fair Value Measurements , for additional information on impairment losses.
−Removed: (3) For the year ended December 31, 2021, loss from operations for the full service center-based child care segment included $ 10.6 million of impairment losses related to fixed assets and operating lease right-of-use assets, and $ 0.6 million of transaction costs related to acquisitions.
+Added: (4) 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, $ 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.
+Added: Depreciation and amortization expense totaled $ 97.9 million, $ 110.7 million, and $ 106.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, of which approximately 90 % related to the full service center-based child care segment.
Refer to Note 3, Revenue Recognition , for revenue by geographic region.
12 unchanged sentences
The 401(k) Plan is funded by elective employee contributions of up to 75 % of their compensation, subject to certain limitations.
−Removed: Under the 401(k) Plan, the Company matches 25 % of employee contributions for each participant up to 8 % of the employee’s compensation after one year of service.
+Added: Under the 401(k) Plan, the Company matches 25 % of employee contributions for each participant on employee contributions of up to 8 % of the employee’s compensation after one year of service.
Expense under the 401(k) Plan, consisting of Company contributions and plan administrative expenses paid by the Company, totaled approximately $ 6.1 million, $ 5.3 million, and $ 4.5 million for the years ended December 31, 2024, 2023, and 2022, respectively.
7 unchanged sentences
The Company holds investments in company-owned life insurance policies to offset the Company’s liabilities under the NQDC Plan.
−Removed: Total investments included in prepaid expenses and other current assets and in other assets in the consolidated balance sheet were $ 1.6 million and $ 18.5 million, respectively, at December 31, 2023.
+Added: Total investments included in other assets in the consolidated balance sheet were $ 23.5 million at December 31, 2024.
NQDC Plan liabilities, included in other current and long-term liabilities in the consolidated balance sheet, were $ 1.9 million and $ 21.7 million at December 31, 2024, respectively.
4 unchanged sentences
At December 31, 2024 , t he Company had 60 letters of credit outstanding used to guarantee certain rent payments for up to $ 2.1 million.
−Removed: 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.
−Removed: Additionally, letters of credit of $ 19.3 million reduced availability in the revolving credit facility.
+Added: These letters of credit are secured by cash deposits, which are included in other assets in the consolidated balance sheet.
+Added: The Company also had 86 letters of credit outstanding used to guarantee certain rent payments for up to $ 9.5 million.
+Added: Additionally, letters of credit totaling $ 15.2 million reduced availability in the U.S.
+Added: revolving credit facility as collateral for our wholly-owned captive insurance entity.
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.