Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35780 | |
Entity Registrant Name | BRIGHT HORIZONS FAMILY SOLUTIONS INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0188269 | |
Entity Address, Address Line One | 2 Wells Avenue | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02459 | |
City Area Code | (617) | |
Local Phone Number | 673-8000 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | BFAM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 57,750,017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001437578 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 32,604 | $ 260,980 |
Accounts receivable — net of allowance for credit losses of $3,044 and $3,006 at September 30, 2022 and December 31, 2021, respectively | 194,410 | 210,971 |
Prepaid expenses and other current assets | 75,830 | 68,320 |
Total current assets | 302,844 | 540,271 |
Fixed assets — net | 561,233 | 598,134 |
Goodwill | 1,674,466 | 1,481,725 |
Other intangible assets — net | 254,729 | 251,032 |
Operating lease right-of-use assets | 795,903 | 696,425 |
Other assets | 126,955 | 72,460 |
Total assets | 3,716,130 | 3,640,047 |
Current liabilities: | ||
Current portion of long-term debt | 16,000 | 16,000 |
Borrowings under revolving credit facility | 113,000 | 0 |
Accounts payable and accrued expenses | 232,092 | 197,366 |
Current portion of operating lease liabilities | 90,710 | 87,341 |
Deferred revenue | 193,240 | 258,438 |
Other current liabilities | 44,974 | 63,030 |
Total current liabilities | 690,016 | 622,175 |
Long-term debt — net | 965,284 | 976,396 |
Operating lease liabilities | 804,556 | 703,911 |
Other long-term liabilities | 196,734 | 100,091 |
Deferred revenue | 9,954 | 9,689 |
Deferred income taxes | 55,830 | 48,509 |
Total liabilities | 2,722,374 | 2,460,771 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued or outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value; 475,000,000 shares authorized; 57,501,048 and 59,305,160 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 58 | 59 |
Additional paid-in capital | 590,608 | 745,615 |
Accumulated other comprehensive loss | (130,470) | (37,359) |
Retained earnings | 533,560 | 470,961 |
Total stockholders’ equity | 993,756 | 1,179,276 |
Total liabilities and stockholders’ equity | $ 3,716,130 | $ 3,640,047 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss, current | $ 3,044 | $ 3,006 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 475,000,000 | 475,000,000 |
Common stock, shares issued (in shares) | 57,501,048 | 59,305,160 |
Common stock, shares outstanding (in shares) | 57,501,048 | 59,305,160 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 540,215 | $ 460,333 | $ 1,490,965 | $ 1,292,651 |
Cost of services | 411,406 | 340,068 | 1,123,572 | 985,046 |
Gross profit | 128,809 | 120,265 | 367,393 | 307,605 |
Selling, general and administrative expenses | 80,812 | 67,135 | 226,231 | 191,703 |
Amortization of intangible assets | 8,948 | 7,140 | 23,127 | 22,192 |
Income from operations | 39,049 | 45,990 | 118,035 | 93,710 |
Loss on foreign currency forward contracts | 0 | 0 | (5,917) | 0 |
Interest expense — net | (11,707) | (9,153) | (26,695) | (27,749) |
Income before income tax | 27,342 | 36,837 | 85,423 | 65,961 |
Income tax expense | (9,094) | (10,018) | (22,824) | (13,195) |
Net income | $ 18,248 | $ 26,819 | $ 62,599 | $ 52,766 |
Earnings per common share: | ||||
Common stock — basic (in dollars per share) | $ 0.32 | $ 0.44 | $ 1.06 | $ 0.87 |
Common stock — diluted (in dollars per share) | $ 0.31 | $ 0.44 | $ 1.06 | $ 0.86 |
Weighted average common shares outstanding: | ||||
Common stock — basic (in shares) | 57,664,895 | 60,218,090 | 58,624,221 | 60,454,855 |
Common stock — diluted (in shares) | 57,740,013 | 60,743,765 | 58,802,742 | 61,058,843 |
Cost, Product and Service [Extensible Enumeration] | Service [Member] | Service [Member] | Service [Member] | Service [Member] |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 18,248 | $ 26,819 | $ 62,599 | $ 52,766 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (67,483) | (14,634) | (130,834) | (13,935) |
Unrealized gain on cash flow hedges and investments, net of tax | 14,016 | 924 | 37,723 | 3,640 |
Total other comprehensive loss | (53,467) | (13,710) | (93,111) | (10,295) |
Comprehensive income (loss) | $ (35,219) | $ 13,109 | $ (30,512) | $ 42,471 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock, at Cost | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning balance (in shares) at Dec. 31, 2020 | 60,466,168 | |||||
Beginning balance at Dec. 31, 2020 | $ 1,283,797 | $ 60 | $ 910,304 | $ 0 | $ (27,069) | $ 400,502 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 16,735 | 16,735 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 423,456 | |||||
Issuance of common stock under the Equity Incentive Plan | 27,978 | $ 1 | 27,977 | |||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (46,009) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (7,429) | (7,429) | ||||
Purchase of treasury stock | (104,323) | (104,323) | ||||
Retirement of treasury stock (in shares) | (751,510) | |||||
Retirement of treasury stock | 0 | $ (1) | (104,322) | 104,323 | ||
Other comprehensive income (loss) | (10,295) | (10,295) | ||||
Net income | 52,766 | 52,766 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 60,092,105 | |||||
Ending balance at Sep. 30, 2021 | 1,259,229 | $ 60 | 843,265 | 0 | (37,364) | 453,268 |
Beginning balance (in shares) at Jun. 30, 2021 | 60,278,756 | |||||
Beginning balance at Jun. 30, 2021 | 1,271,144 | $ 60 | 868,289 | 0 | (23,654) | 426,449 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 5,600 | 5,600 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 51,895 | |||||
Issuance of common stock under the Equity Incentive Plan | 3,640 | 3,640 | ||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (2,036) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (287) | (287) | ||||
Purchase of treasury stock | (33,977) | (33,977) | ||||
Retirement of treasury stock (in shares) | (236,510) | |||||
Retirement of treasury stock | 0 | (33,977) | 33,977 | |||
Other comprehensive income (loss) | (13,710) | (13,710) | ||||
Net income | 26,819 | 26,819 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 60,092,105 | |||||
Ending balance at Sep. 30, 2021 | $ 1,259,229 | $ 60 | 843,265 | 0 | (37,364) | 453,268 |
Beginning balance (in shares) at Dec. 31, 2021 | 59,305,160 | 59,305,160 | ||||
Beginning balance at Dec. 31, 2021 | $ 1,179,276 | $ 59 | 745,615 | 0 | (37,359) | 470,961 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 21,282 | 21,282 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 229,354 | |||||
Issuance of common stock under the Equity Incentive Plan | 11,484 | $ 1 | 11,483 | |||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (47,320) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (5,432) | (5,432) | ||||
Purchase of treasury stock | (182,342) | (182,342) | ||||
Retirement of treasury stock (in shares) | (1,986,146) | |||||
Retirement of treasury stock | 0 | $ (2) | (182,340) | 182,342 | ||
Other comprehensive income (loss) | (93,111) | (93,111) | ||||
Net income | $ 62,599 | 62,599 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 57,501,048 | 57,501,048 | ||||
Ending balance at Sep. 30, 2022 | $ 993,756 | $ 58 | 590,608 | 0 | (130,470) | 533,560 |
Beginning balance (in shares) at Jun. 30, 2022 | 58,622,868 | |||||
Beginning balance at Jun. 30, 2022 | 1,118,986 | $ 59 | 680,618 | 0 | (77,003) | 515,312 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense | 7,514 | 7,514 | ||||
Issuance of common stock under the Equity Incentive Plan (in shares) | 13,400 | |||||
Issuance of common stock under the Equity Incentive Plan | 859 | 859 | ||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock (in shares) | (3,008) | |||||
Shares received in net share settlement of stock option exercises and vesting of restricted stock | (278) | (278) | ||||
Purchase of treasury stock | (98,106) | (98,106) | ||||
Retirement of treasury stock (in shares) | (1,132,212) | |||||
Retirement of treasury stock | 0 | $ (1) | (98,105) | 98,106 | ||
Other comprehensive income (loss) | (53,467) | (53,467) | ||||
Net income | $ 18,248 | 18,248 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 57,501,048 | 57,501,048 | ||||
Ending balance at Sep. 30, 2022 | $ 993,756 | $ 58 | $ 590,608 | $ 0 | $ (130,470) | $ 533,560 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | $ 18,248 | $ 26,819 | $ 62,599 | $ 52,766 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 77,958 | 82,858 | |||
Stock-based compensation expense | 21,282 | 16,735 | |||
Loss on foreign currency forward contracts | 0 | 0 | 5,917 | 0 | |
Deferred income taxes | (8,209) | 1,573 | |||
Other non-cash adjustments — net | 1,894 | 3,369 | |||
Changes in assets and liabilities: | |||||
Accounts receivable | 16,369 | 15,836 | |||
Prepaid expenses and other current assets | (7,204) | (4,095) | |||
Accounts payable and accrued expenses | 27,122 | 8,911 | |||
Income taxes | (6,278) | (11,269) | |||
Deferred revenue | (64,235) | 15,360 | |||
Leases | 703 | (3,378) | |||
Other assets | 11,453 | 3,233 | |||
Other current and long-term liabilities | (8,393) | 3,348 | |||
Net cash provided by operating activities | 130,978 | 185,247 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Purchases of fixed assets | (48,228) | (47,350) | |||
Proceeds from the disposal of fixed assets | 10,456 | 5,840 | |||
Purchases of debt securities and other investments | (13,838) | (20,032) | |||
Proceeds from the maturity of debt securities and sale of other investments | 16,009 | 17,730 | |||
Settlement of foreign currency forward contracts | (5,917) | 0 | |||
Payments and settlements for acquisitions — net of cash acquired | (209,421) | (18,914) | |||
Net cash used in investing activities | (250,939) | (62,726) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Borrowings under revolving credit facility | 167,000 | 0 | |||
Payments under revolving credit facility | (54,000) | 0 | |||
Principal payments of long-term debt | (12,000) | (8,063) | |||
Payments of debt issuance costs | 0 | (2,057) | |||
Purchase of treasury stock | (182,570) | (102,184) | |||
Proceeds from issuance of common stock upon exercise of options and restricted stock upon purchase | 11,412 | 31,820 | |||
Taxes paid related to the net share settlement of stock options and restricted stock | (5,432) | (7,429) | |||
Payments of contingent consideration for acquisitions | (13,865) | (196) | |||
Net cash used in financing activities | (89,455) | (88,109) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | (4,018) | (2,120) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | (213,434) | 32,292 | |||
Cash, cash equivalents and restricted cash — beginning of period | 265,281 | 388,465 | $ 388,465 | ||
Cash, cash equivalents and restricted cash — end of period | 51,847 | 420,757 | 51,847 | 420,757 | 265,281 |
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: | |||||
Cash and cash equivalents | 32,604 | 412,402 | 32,604 | 412,402 | 260,980 |
Total cash, cash equivalents and restricted cash — end of period | 51,847 | 420,757 | 51,847 | 420,757 | $ 265,281 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||
Cash payments of interest | 24,973 | 25,193 | |||
Cash payments of income taxes | 38,013 | 23,427 | |||
Cash paid for amounts included in the measurement of lease liabilities | 104,809 | 106,878 | |||
NON-CASH TRANSACTIONS: | |||||
Fixed asset purchases recorded in accounts payable and accrued expenses | 2,121 | 2,402 | |||
Deferred or contingent consideration issued for acquisitions | 97,653 | 7,337 | |||
Operating right-of-use assets obtained in exchange for operating lease liabilities — net | 44,575 | 46,653 | |||
Restricted stock reclassified from other current liabilities to equity upon vesting | 3,160 | 4,178 | |||
Treasury stock purchases in other current liabilities | 0 | 2,139 | |||
Prepaid expenses and other current assets | |||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: | |||||
Restricted cash and cash equivalents | 7,906 | 8,355 | 7,906 | 8,355 | |
Other assets | |||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS: | |||||
Restricted cash and cash equivalents | $ 11,337 | $ 0 | $ 11,337 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION Organization — Bright Horizons Family Solutions Inc. (“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 administration, 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. 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. On July 1, 2022, the Company acquired Only About Children, an operator of approximately 75 child care centers in Australia. Refer to Note 4, Acquisitions, for additional information. Basis of Presentation — The accompanying unaudited condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required in accordance with U.S. GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the Company’s unaudited condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2022 and 2021, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. Stockholders ’ Equity — 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. The share repurchase program has no expiration date and replaced the prior June 2018 authorization. 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. During the nine months ended September 30, 2022, the Company repurchased 2.0 million shares for $182.3 million. At September 30, 2022, $198.3 million remained available under the repurchase program. During the nine months ended September 30, 2021, 0.8 million shares were repurchased for $104.3 million. All repurchased shares have been retired. Government Support — During the nine months ended September 30, 2022 and 2021, the Company participated in government support programs that were enacted in response to the economic impact of the COVID-19 pandemic, including availing itself of certain tax deferrals, tax credits and federal block grant funding in the United States, as well as employee wage support in the United Kingdom. During the nine months ended September 30, 2022 and 2021, $68.6 million and $32.2 million, respectively, was recorded as a reduction to cost of services in relation to these benefits, of which $25.6 million and $9.3 million, respectively, reduced the operating subsidy revenue due from employers for the related child care centers. Additionally during the nine months ended September 30, 2022, amounts received for tuition support of $4.6 million were recorded to revenue. As of September 30, 2022 and December 31, 2021, $2.9 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. As of September 30, 2022 and December 31, 2021, $6.1 million and $3.9 million, respectively, was recorded to other current liabilities related to government support received related to future periods, and as of September 30, 2022 and December 31, 2021, payroll tax deferrals of $7.6 million and $7.0 million, respectively, were recorded in accounts payable and accrued expenses on the consolidated balance sheet. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into segments and geographical regions. Revenue disaggregated by segment and geographical region was as follows: Full service Back-up care Educational Total (In thousands) Three months ended September 30, 2022 North America $ 243,747 $ 119,555 $ 31,053 $ 394,355 International 136,809 9,051 — 145,860 $ 380,556 $ 128,606 $ 31,053 $ 540,215 Three months ended September 30, 2021 North America $ 221,297 $ 91,237 $ 27,253 $ 339,787 International 112,586 7,960 — 120,546 $ 333,883 $ 99,197 $ 27,253 $ 460,333 Full service Back-up care Educational Total (In thousands) Nine months ended September 30, 2022 North America $ 744,806 $ 280,580 $ 83,997 $ 1,109,383 International 360,998 20,584 — 381,582 $ 1,105,804 $ 301,164 $ 83,997 $ 1,490,965 Nine months ended September 30, 2021 North America $ 630,078 $ 239,079 $ 76,986 $ 946,143 International 328,551 17,957 — 346,508 $ 958,629 $ 257,036 $ 76,986 $ 1,292,651 The classification “North America” is comprised of the Company’s United States and Puerto Rico operations and the classification “International” includes the Company’s United Kingdom, Netherlands, Australia and India operations. On July 1, 2022, the Company acquired Only About Children, an operator of approximately 75 child care centers in Australia. Refer to Note 4, Acquisitions, for additional information. 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. During the nine months ended September 30, 2022 and 2021, $224.6 million and $169.2 million was recognized as revenue related to the deferred revenue balance recorded at December 31, 2021 and December 31, 2020, respectively. Remaining Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for contracts with an original contract term of one year or less, or for variable consideration allocated to the unsatisfied performance obligation of a series of services. The transaction price allocated to the remaining performance obligations relates to services that are paid or invoiced in advance. The Company’s remaining performance obligations not subject to the practical expedients were not material. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | LEASESThe Company has operating leases for certain of its full service and back-up early education and child care centers, corporate offices, call centers, and to a lesser extent, various office equipment, in the United States, the United Kingdom, the Netherlands, and Australia. Most of the leases expire within 10 to 15 years and many contain renewal options and/or termination provisions. As of September 30, 2022 and December 31, 2021, there were no material finance leases. Lease Expense The components of lease expense were as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands) Operating lease expense (1) $ 37,992 $ 33,358 $ 102,879 $ 100,635 Variable lease expense (1) 10,264 9,399 29,976 23,076 Total lease expense $ 48,256 $ 42,757 $ 132,855 $ 123,711 (1) Excludes short-term lease expense and sublease income, which were immaterial for the periods presented. Other Information The weighted average remaining lease term and the weighted average discount rate were as follows: September 30, 2022 December 31, 2021 Weighted average remaining lease term (in years) 11 10 Weighted average discount rate 6.7% 5.8% Maturity of Lease Liabilities The following table summarizes the maturity of lease liabilities as of September 30, 2022: Operating Leases (In thousands) Remainder of 2022 $ 23,811 2023 148,016 2024 140,222 2025 129,354 2026 121,992 Thereafter 709,667 Total lease payments 1,273,062 Less imputed interest (377,796) Present value of lease liabilities 895,266 Less current portion of operating lease liabilities (90,710) Long-term operating lease liabilities $ 804,556 As of September 30, 2022, the Company had entered into additional operating leases that have not yet commenced with total fixed payment obligations of $28.3 million. The leases are expected to commence between the fourth quarter of 2022 and the first quarter of 2023 and have initial lease terms of approximately 12 to 15 years. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONSThe Company’s growth strategy includes expansion through strategic and synergistic acquisitions. The goodwill resulting from these acquisitions arises largely from synergies expected from combining the operations of the businesses acquired with the Company’s existing operations, including cost efficiencies and leveraging existing client relationships, as well as from benefits derived from gaining the related assembled workforce. 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. 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. In October 2022, the Company reached an agreement with the sellers on the final net working capital, resulting in a refund of AUD$2.6 million (USD$1.8 million), which is expected to be received in the fourth quarter of 2022. The present value of the deferred consideration of AUD$141.8 million (USD$97.7 million) is included in other long-term liabilities and AUD$2.6 million (USD$1.8 million) receivable from the sellers related to working capital settlements is included in other current assets on the consolidated balance sheet. During the nine months ended September 30, 2022, the Company incurred acquisition-related transaction costs of approximately $9.2 million, which are 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 6, Credit Arrangements and Debt Obligations, for additional information on the foreign currency forward contracts. 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: At acquisition date (In thousands) Cash $ 4,705 Accounts receivable and prepaid expenses 4,295 Fixed assets 21,702 Goodwill 283,466 Intangible assets 30,945 Operating lease right of use assets 156,678 Total assets acquired 501,791 Accounts payable and accrued expenses 17,991 Deferred revenue and parent deposits 6,809 Deferred tax liabilities 3,392 Operating lease liabilities 161,405 Other long-term liabilities 5,458 Total liabilities assumed 195,055 Purchase price $ 306,736 The Company recorded goodwill of $283.5 million related to the full service center-based child care segment, which will not be deductible for tax purposes. Intangible assets consist of customer relationships of $23.0 million that will be amortized over 6 years and trade names of $7.9 million that will be amortized over 11 years. The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of September 30, 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, and the Company’s assessment of tax related items. The operating results for Only About Children are included in the consolidated results of operations from the date of acquisition. Only About Children contributed total revenue of $37.3 million during the three months ended September 30, 2022. Net income for the three months ended September 30, 2022 was not materially impacted by the acquisition of Only About Children. 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) Nine months ended September 30, 2022 Nine months ended September 30, 2021 (In thousands) Revenue $ 1,559,882 $ 1,400,372 Other than the impact of shifting the transaction costs incurred in 2022 to 2021, consolidated pro forma net income did not materially change from the reported results. In assessing the impact to the unaudited pro forma results we considered certain adjustments related to the acquisition, such as increased amortization expense related to the acquired intangible assets, adjusted depreciation associated with the fair value of the acquired fixed assets, shifting of transaction costs, as well as applying U.S. GAAP rent expense in accordance with Accounting Standards Codification 842, Leases. Other 2022 Acquisitions During the nine months ended September 30, 2022, the Company acquired one center in the Netherlands, which was accounted for as a business combination. This business was acquired for aggregate cash consideration of $3.3 million and consideration payable of $0.2 million. The Company recorded goodwill of $3.1 million related to the full service center-based child care segment in relation to this acquisition, which will not be deductible for tax purposes. In addition, the Company recorded intangible assets of $0.5 million that will be amortized over four years. The determination and allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of September 30, 2022, the purchase price allocation for this acquisition remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed. The operating results for the acquired business 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 nine months ended September 30, 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 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. 2021 Acquisitions 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. 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. Additionally, the Company is subject to contingent consideration payments for two of these acquisitions, and recorded a fair value estimate of $7.3 million in relation to these contingent consideration arrangements at acquisition. Contingent consideration of up to $1.2 million was payable within one year from the date of acquisition if certain performance targets were met for one of the acquisitions, of which $0.8 million was paid based on the performance targets met. Contingent consideration is payable in 2026 based on certain financial metrics for the other acquisition. 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. 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. The allocation of purchase price consideration is based on preliminary estimates of fair value; such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). As of September 30, 2022, the purchase price allocation for one of the acquisitions remains open as the Company gathers additional information regarding the assets acquired and the liabilities assumed. 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
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill were as follows: Full service Back-up care Educational Total (In thousands) Balance at January 1, 2022 $ 1,233,096 $ 208,786 $ 39,843 $ 1,481,725 Additions from acquisitions 286,581 — — 286,581 Effect of foreign currency translation (89,264) (4,576) — (93,840) Balance at September 30, 2022 $ 1,430,413 $ 204,210 $ 39,843 $ 1,674,466 The Company also has intangible assets, which consisted of the following at September 30, 2022 and December 31, 2021: September 30, 2022 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 13 years $ 414,770 $ (348,502) $ 66,268 Trade names 6 years 18,257 (9,549) 8,708 433,027 (358,051) 74,976 Indefinite-lived intangible assets: Trade names N/A 179,753 — 179,753 $ 612,780 $ (358,051) $ 254,729 December 31, 2021 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 14 years $ 400,399 $ (332,571) $ 67,828 Trade names 6 years 12,358 (10,150) 2,208 412,757 (342,721) 70,036 Indefinite-lived intangible assets: Trade names N/A 180,996 — 180,996 $ 593,753 $ (342,721) $ 251,032 The Company estimates that it will record amortization expense related to intangible assets existing as of September 30, 2022 as follows over the next five years: Estimated amortization expense (In thousands) Remainder of 2022 $ 8,765 2023 $ 32,762 2024 $ 16,699 2025 $ 5,270 2026 $ 3,718 |
Credit Arrangements and Debt Ob
Credit Arrangements and Debt Obligations | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Credit Arrangements and Debt Obligations | CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS Senior Secured Credit Facilities The Company’s senior secured credit facilities consist of a term loan B facility of $600 million (“term loan B”) and a term loan A facility of $400 million (“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”). Long-term debt obligations were as follows: September 30, 2022 December 31, 2021 (In thousands) Term loan B $ 595,500 $ 600,000 Term loan A 392,500 400,000 Deferred financing costs and original issue discount (6,716) (7,604) Total debt 981,284 992,396 Less current maturities (16,000) (16,000) Long-term debt $ 965,284 $ 976,396 All borrowings under the credit facilities are subject to variable interest. The effective interest rate for the term loans was 5.07% and 2.29% at September 30, 2022 and December 31, 2021, respectively, and the weighted average interest rate was 3.11% and 2.50% for the nine months ended September 30, 2022 and 2021, respectively, prior to the effects of any interest rate hedge arrangements. The effective interest rate for the revolving credit facility was 4.65% at September 30, 2022 and the weighted average interest rate was 4.30% and 4.00% for the nine months ended September 30, 2022 and 2021, respectively. Term Loan B Facility 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. 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 eurocurrency rate. The eurocurrency rate is the one, three or six month LIBOR rate or, with applicable lender approval, the nine or twelve month or less than one month LIBOR rate, subject to an interest rate floor of 0.50%. The base rate is subject to an interest rate floor of 1.50%. Term Loan A Facility The five-year term loan A matures on November 23, 2026 and requires quarterly principal payments equal to 2.5% per annum of the original aggregate principal amount of the term loan A in each of the first three years, 5.0% in the fourth year, and 7.5% in the fifth year. The remaining principal balance is due at maturity. Borrowings under the term loan A facility bear interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, subject to an interest rate floor of 1.00%, or 1.50% to 1.75% over the eurocurrency rate. The eurocurrency rate is the one, three or six month LIBOR rate or, with applicable lender approval, the nine or twelve month or less than one month LIBOR rate. Revolving Credit Facility The $400 million multi-currency revolving credit facility matures on May 26, 2026. Borrowings outstanding on the revolving credit facility were $113.0 million at September 30, 2022. Borrowings under the revolving credit facility bear interest at a rate per annum ranging from 0.50% to 0.75% over the base rate, subject to an interest rate floor of 1.00%, or 1.50% to 1.75% over the eurocurrency rate. Debt Covenants All obligations under the senior secured credit facilities are secured by substantially all the assets of the Company’s material U.S. subsidiaries. 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: incur liens; make investments, loans, advances and acquisitions; incur additional indebtedness or guarantees; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; engage in transactions with affiliates; sell assets, including capital stock of the Company’s subsidiaries; alter the business conducted; enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and consolidate or merge. 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. The term loan A 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. A breach of the applicable covenant is subject to certain equity cure rights. Future principal payments of long-term debt are as follows for the years ending December 31: Long-term debt (In thousands) Remainder of 2022 $ 4,000 2023 16,000 2024 18,500 2025 28,500 2026 351,000 Thereafter 570,000 Total future principal payments $ 988,000 Derivative Financial Instruments The Company is subject to interest rate risk as all borrowings under the senior secured credit facilities are subject to variable interest rates. The Company’s risk management policy permits using derivative instruments to manage interest rate and other risks. 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. 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%. 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. 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. 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%. 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%. During the nine months ended September 30, 2022, the Company entered into foreign currency forward contracts in connection with an acquisition in Australia completed on July 1, 2022. The Company entered into the foreign currency forwards to lock the purchase price in US dollars at closing and mitigate the impact of foreign currency fluctuations between signing of the definitive purchase agreement on May 3, 2022 and closing. The forward contracts had a total notional value of approximately AUD$320 million, which included the expected payments for the purchase price and for letters of credit used to guarantee certain lease arrangements. The cash flows associated with the business combination do not meet the criteria to be designated and accounted for as a cash flow hedge and, as such, foreign currency gains and losses on these forwards are recorded on the consolidated statement of income. During the nine months ended September 30, 2022, the Company recognized realized losses of $5.9 million in relation to these forwards due to fluctuations in the Australian dollar. The fair value of the derivative financial instruments was as follows for the periods presented: Derivative financial instruments Consolidated balance sheet classification September 30, 2022 December 31, 2021 (In thousands) Interest rate caps - asset Other assets $ 59,580 $ 8,809 The effect of the derivative financial instruments on other comprehensive income (loss) was as follows: Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Three months ended September 30, 2022 Cash flow hedges $ 21,550 Interest expense — net $ 2,344 $ 19,206 Income tax effect (5,754) Income tax expense (626) (5,128) Net of income taxes $ 15,796 $ 1,718 $ 14,078 Three months ended September 30, 2021 Cash flow hedges $ (222) Interest expense — net $ (1,493) $ 1,271 Income tax effect 59 Income tax expense 399 (340) Net of income taxes $ (163) $ (1,094) $ 931 Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Nine months ended September 30, 2022 Cash flow hedges $ 53,310 Interest expense — net $ 2,173 $ 51,137 Income tax effect (14,234) Income tax expense (1,057) (13,177) Net of income taxes $ 39,076 $ 1,116 $ 37,960 Nine months ended September 30, 2021 Cash flow hedges $ 618 Interest expense — net $ (4,414) $ 5,032 Income tax effect (165) Income tax expense 1,179 (1,344) Net of income taxes $ 453 $ (3,235) $ 3,688 During the next 12 months, the Company estimates that a net gain of $25.6 million, pre-tax, will be reclassified from accumulated other comprehensive income (loss) and recorded as a reduction to interest expense related to these derivative financial instruments. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following tables set forth the computation of basic and diluted earnings per share using the two-class method: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands, except share data) Basic earnings per share: Net income $ 18,248 $ 26,819 $ 62,599 $ 52,766 Allocation of net income to common stockholders: Common stock $ 18,170 $ 26,700 $ 62,334 $ 52,538 Unvested participating shares 78 119 265 228 Net income $ 18,248 $ 26,819 $ 62,599 $ 52,766 Weighted average common shares outstanding: Common stock 57,664,895 60,218,090 58,624,221 60,454,855 Unvested participating shares 248,969 266,331 249,446 255,157 Earnings per common share: Common stock $ 0.32 $ 0.44 $ 1.06 $ 0.87 Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands, except share data) Diluted earnings per share: Earnings allocated to common stock $ 18,170 $ 26,700 $ 62,334 $ 52,538 Plus: earnings allocated to unvested participating shares 78 119 265 228 Less: adjusted earnings allocated to unvested participating shares (78) (117) (264) (225) Earnings allocated to common stock $ 18,170 $ 26,702 $ 62,335 $ 52,541 Weighted average common shares outstanding: Common stock 57,664,895 60,218,090 58,624,221 60,454,855 Effect of dilutive securities 75,118 525,675 178,521 603,988 Weighted average common shares outstanding — diluted 57,740,013 60,743,765 58,802,742 61,058,843 Earnings per common share: Common stock $ 0.31 $ 0.44 $ 1.06 $ 0.86 Options outstanding to purchase 2.3 million and 1.0 million shares of common stock were excluded from diluted earnings per share for the three months ended September 30, 2022 and 2021, respectively, and 1.8 million and 0.9 million shares of common stock were excluded for the nine months ended September 30, 2022 and 2021, respectively, since their effect was anti-dilutive. These options may become dilutive in the future. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company’s effective income tax rates were 33.3% and 27.2% for the three months ended September 30, 2022 and 2021, respectively, and 26.7% and 20.0% for the nine months ended September 30, 2022 and 2021, respectively. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including changes to income before income tax, jurisdictional mix of income before income tax, valuation allowances, jurisdictional income tax rate changes, as well as discrete items such as non-deductible transaction costs, the settlement of foreign, federal and state tax issues and the effects of excess (shortfall) tax benefit (expense) associated with the exercise or expiration of stock options and vesting of restricted stock, which is included in tax expense. During the three months ended September 30, 2022, the net shortfall tax expense from stock-based compensation expense increased tax expense by $0.1 million. During the nine months ended September 30, 2022, the excess tax benefit decreased tax expense by $2.6 million. During the three and nine months ended September 30, 2021, the excess tax benefit from stock-based compensation expense decreased tax expense by $0.8 million and $5.9 million, respectively. For the three months ended September 30, 2022 and 2021, prior to the inclusion of the excess tax benefit and other discrete items, the effective income tax rate approximated 29%, compared to 28% for the nine months ended September 30, 2022 and 2021. The Company’s unrecognized tax benefits were $3.9 million at both September 30, 2022 and December 31, 2021, inclusive of interest. The Company settled with a government agency and released $0.3 million of unrecognized tax benefits during the quarter ended September 30, 2022. The Company expects the unrecognized tax benefits to change over the next twelve months if certain tax matters settle with the applicable taxing jurisdiction during this time frame, or, if the applicable statute of limitations lapses. The impact of the amount of such changes to previously recorded uncertain tax positions could range from zero to $0.2 million. The Company and its domestic subsidiaries are subject to U.S. federal income tax as well as tax in multiple state jurisdictions. U.S. federal income tax returns are typically subject to examination by the Internal Revenue Service (“IRS”) and the statute of limitations for federal tax returns is three years. The Company’s filings for the tax years 2018 through 2020 are subject to audit based upon the federal statute of limitations. State income tax returns are generally subject to examination for a period of three to four years after filing of the respective return. 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. As of September 30, 2022, there were two income tax audits in process and the tax years from 2017 to 2020 are subject to audit. The Company is also subject to corporate income tax for its subsidiaries located in the United Kingdom, the Netherlands, Australia, India, Ireland, and Puerto Rico. The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to five years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified using a three-level hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Company uses observable inputs where relevant and whenever possible. The three levels of the hierarchy are defined as follows: Level 1 — Fair value is derived using quoted prices from active markets for identical instruments. Level 2 — Fair value is derived using quoted prices for similar instruments from active markets or for identical or similar instruments in markets that are not active; or, fair value is based on model-derived valuations in which all significant inputs and significant value drivers are observable from active markets. Level 3 — Fair value is derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximates their fair value because of their short-term nature. Financial instruments that potentially expose the Company to concentrations of credit risk consisted mainly of cash and accounts receivable. The Company mitigates its exposure by maintaining its cash in financial institutions of high credit standing. The Company’s accounts receivable is derived primarily from the services it provides, and the related credit risk is dispersed across many clients in various industries with no single client accounting for more than 10% of the Company's net revenue or accounts receivable. No significant credit concentration risk existed at September 30, 2022. Long-term Debt — The Company’s long-term debt is recorded at adjusted cost, net of original issue discounts and deferred financing costs. 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. As of September 30, 2022, the carrying value and estimated fair value of long-term debt was $988.0 million and $964.2 million, respectively. As of December 31, 2021, the estimated fair value approximated the carrying value of long-term debt. Derivative Financial Instruments — The Company’s 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. 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. 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. The fair value of the interest rate caps are classified as Level 2. As of September 30, 2022 and December 31, 2021, the fair value of the interest rate cap agreements was $59.6 million and $8.8 million, respectively, which was recorded in other assets on the consolidated balance sheet. The Company’s foreign currency forward contracts are recorded at fair value based on the foreign currency exchange rates in effect at the end of the reporting period. During the nine months ended September 30, 2022, the Company recognized realized losses of $5.9 million in relation to these forwards due to fluctuations in the Australian dollar. Refer to Note 6, Credit Arrangements and Debt Obligations, for additional information on the foreign currency forward contracts. Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, consist of U.S. Treasury and U.S. government agency securities and certificates of deposit. These securities are held in escrow by the Company’s wholly-owned captive insurance company and were purchased with restricted cash. As such, these securities are not available to fund the Company’s operations. These securities are recorded at fair value using quoted prices available in active markets and are classified as Level 1. As of September 30, 2022, the fair value of the available-for-sale debt securities was $26.5 million and was classified based on the instruments’ maturity dates, with $22.5 million included in prepaid expenses and other current assets and $4.0 million in other assets on the consolidated balance sheet. 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. At September 30, 2022 and December 31, 2021, the amortized cost was $26.8 million and $30.0 million, respectively. The debt securities held at September 30, 2022 had remaining maturities ranging from less than one year to approximately 1.5 years. Unrealized gains and losses, net of tax, on available-for-sale debt securities were immaterial for the three and nine months ended September 30, 2022 and 2021. Liabilities for Contingent Consideration — The Company is subject to contingent consideration arrangements in connection with certain business combinations. Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration payable for the related business combination and subsequent changes in fair value recorded to selling, general and administrative expenses on the Company’s consolidated statement of income. The fair value of contingent consideration was generally calculated using customary valuation models based on probability-weighted outcomes of meeting certain future performance targets and forecasted results. The key inputs to the valuations are the projections of future financial results in relation to the businesses and the company-specific discount rates. 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. During the nine months ended September 30, 2022, contingent consideration liabilities of $19.3 million were paid related to acquisitions completed in 2019 and 2021. The contingent consideration liabilities outstanding as of September 30, 2022 related to 2021 acquisitions. See Note 4, Acquisitions, for additional information. The following table provides a roll forward of the recurring Level 3 fair value measurements: Nine months ended September 30, 2022 (In thousands) Balance at January 1, 2022 $ 27,474 Settlement of contingent consideration liabilities (19,250) Changes in fair value 906 Foreign currency translation (532) Balance at September 30, 2022 $ 8,598 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)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. The changes in accumulated other comprehensive income (loss) by component were as follows: Nine months ended September 30, 2022 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2022 $ (38,073) $ 738 $ (24) $ (37,359) Other comprehensive income (loss) before reclassifications — net of tax (130,834) 39,076 (237) (91,995) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 1,116 — 1,116 Net other comprehensive income (loss) (130,834) 37,960 (237) (93,111) Balance at September 30, 2022 $ (168,907) $ 38,698 $ (261) $ (130,470) Nine months ended September 30, 2021 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2021 $ (22,332) $ (4,785) $ 48 $ (27,069) Other comprehensive income (loss) before reclassifications — net of tax (13,548) 453 (48) (13,143) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax 387 (3,235) — (2,848) Net other comprehensive income (loss) (13,935) 3,688 (48) (10,295) Balance at September 30, 2021 $ (36,267) $ (1,097) $ — $ (37,364) (1) Taxes are not provided for the currency translation adjustments related to the undistributed earnings of foreign subsidiaries that are intended to be indefinitely reinvested. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATIONThe 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. The full service center-based child care segment includes the traditional center-based early education and child care, preschool, and elementary education. 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, and self-sourced reimbursed care. The Company’s educational advisory and other services segment consists of tuition assistance and student loan repayment program administration, workforce education, related educational advising, college admissions advisory services, and 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. Intercompany activity is eliminated in the segment results. The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; therefore, no segment asset information is produced or included herein. Revenue and income (loss) from operations by reportable segment were as follows: Full service Back-up care Educational Total (In thousands) Three months ended September 30, 2022 Revenue $ 380,556 $ 128,606 $ 31,053 $ 540,215 Income (loss) from operations (1) (9,834) 40,405 8,478 39,049 Three months ended September 30, 2021 Revenue $ 333,883 $ 99,197 $ 27,253 $ 460,333 Income from operations 10,070 31,823 4,097 45,990 (1) For the three months ended September 30, 2022, income from operations included $6.7 million of transaction costs related to acquisitions which were allocated to the full service center-based child care segment. Full service Back-up care Educational Total (In thousands) Nine months ended September 30, 2022 Revenue $ 1,105,804 $ 301,164 $ 83,997 $ 1,490,965 Income from operations (1) 17,049 85,982 15,004 118,035 Nine months ended September 30, 2021 Revenue $ 958,629 $ 257,036 $ 76,986 $ 1,292,651 Income (loss) from operations (3,835) 83,782 13,763 93,710 (1) For the nine months ended September 30, 2022, income from operations included $9.2 million of transaction costs related to acquisitions which were allocated to the full service center-based child care segment. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying unaudited condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required in accordance with U.S. GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the Company’s unaudited condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of income, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2022 and 2021, reflect all adjustments (consisting only of normal and recurring adjustments) necessary to present fairly the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. |
Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified using a three-level hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Company uses observable inputs where relevant and whenever possible. The three levels of the hierarchy are defined as follows: Level 1 — Fair value is derived using quoted prices from active markets for identical instruments. Level 2 — Fair value is derived using quoted prices for similar instruments from active markets or for identical or similar instruments in markets that are not active; or, fair value is based on model-derived valuations in which all significant inputs and significant value drivers are observable from active markets. Level 3 — Fair value is derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue disaggregated by segment and geographical region was as follows: Full service Back-up care Educational Total (In thousands) Three months ended September 30, 2022 North America $ 243,747 $ 119,555 $ 31,053 $ 394,355 International 136,809 9,051 — 145,860 $ 380,556 $ 128,606 $ 31,053 $ 540,215 Three months ended September 30, 2021 North America $ 221,297 $ 91,237 $ 27,253 $ 339,787 International 112,586 7,960 — 120,546 $ 333,883 $ 99,197 $ 27,253 $ 460,333 Full service Back-up care Educational Total (In thousands) Nine months ended September 30, 2022 North America $ 744,806 $ 280,580 $ 83,997 $ 1,109,383 International 360,998 20,584 — 381,582 $ 1,105,804 $ 301,164 $ 83,997 $ 1,490,965 Nine months ended September 30, 2021 North America $ 630,078 $ 239,079 $ 76,986 $ 946,143 International 328,551 17,957 — 346,508 $ 958,629 $ 257,036 $ 76,986 $ 1,292,651 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands) Operating lease expense (1) $ 37,992 $ 33,358 $ 102,879 $ 100,635 Variable lease expense (1) 10,264 9,399 29,976 23,076 Total lease expense $ 48,256 $ 42,757 $ 132,855 $ 123,711 (1) Excludes short-term lease expense and sublease income, which were immaterial for the periods presented. |
Schedule of Weighted Average Remaining Lease Term and Discount Rate | The weighted average remaining lease term and the weighted average discount rate were as follows: September 30, 2022 December 31, 2021 Weighted average remaining lease term (in years) 11 10 Weighted average discount rate 6.7% 5.8% |
Maturities of Lease Liabilities | The following table summarizes the maturity of lease liabilities as of September 30, 2022: Operating Leases (In thousands) Remainder of 2022 $ 23,811 2023 148,016 2024 140,222 2025 129,354 2026 121,992 Thereafter 709,667 Total lease payments 1,273,062 Less imputed interest (377,796) Present value of lease liabilities 895,266 Less current portion of operating lease liabilities (90,710) Long-term operating lease liabilities $ 804,556 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | 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: At acquisition date (In thousands) Cash $ 4,705 Accounts receivable and prepaid expenses 4,295 Fixed assets 21,702 Goodwill 283,466 Intangible assets 30,945 Operating lease right of use assets 156,678 Total assets acquired 501,791 Accounts payable and accrued expenses 17,991 Deferred revenue and parent deposits 6,809 Deferred tax liabilities 3,392 Operating lease liabilities 161,405 Other long-term liabilities 5,458 Total liabilities assumed 195,055 Purchase price $ 306,736 |
Business Acquisition, Pro Forma Information | 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) Nine months ended September 30, 2022 Nine months ended September 30, 2021 (In thousands) Revenue $ 1,559,882 $ 1,400,372 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill were as follows: Full service Back-up care Educational Total (In thousands) Balance at January 1, 2022 $ 1,233,096 $ 208,786 $ 39,843 $ 1,481,725 Additions from acquisitions 286,581 — — 286,581 Effect of foreign currency translation (89,264) (4,576) — (93,840) Balance at September 30, 2022 $ 1,430,413 $ 204,210 $ 39,843 $ 1,674,466 |
Schedule of Intangible Assets | The Company also has intangible assets, which consisted of the following at September 30, 2022 and December 31, 2021: September 30, 2022 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 13 years $ 414,770 $ (348,502) $ 66,268 Trade names 6 years 18,257 (9,549) 8,708 433,027 (358,051) 74,976 Indefinite-lived intangible assets: Trade names N/A 179,753 — 179,753 $ 612,780 $ (358,051) $ 254,729 December 31, 2021 Weighted average Cost Accumulated Net carrying (In thousands) Definite-lived intangible assets: Customer relationships 14 years $ 400,399 $ (332,571) $ 67,828 Trade names 6 years 12,358 (10,150) 2,208 412,757 (342,721) 70,036 Indefinite-lived intangible assets: Trade names N/A 180,996 — 180,996 $ 593,753 $ (342,721) $ 251,032 |
Estimated Amortization Expense Related to Intangible Assets | The Company estimates that it will record amortization expense related to intangible assets existing as of September 30, 2022 as follows over the next five years: Estimated amortization expense (In thousands) Remainder of 2022 $ 8,765 2023 $ 32,762 2024 $ 16,699 2025 $ 5,270 2026 $ 3,718 |
Credit Arrangements and Debt _2
Credit Arrangements and Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Outstanding Borrowings | Long-term debt obligations were as follows: September 30, 2022 December 31, 2021 (In thousands) Term loan B $ 595,500 $ 600,000 Term loan A 392,500 400,000 Deferred financing costs and original issue discount (6,716) (7,604) Total debt 981,284 992,396 Less current maturities (16,000) (16,000) Long-term debt $ 965,284 $ 976,396 |
Schedule of Maturities of Long-term Debt | Future principal payments of long-term debt are as follows for the years ending December 31: Long-term debt (In thousands) Remainder of 2022 $ 4,000 2023 16,000 2024 18,500 2025 28,500 2026 351,000 Thereafter 570,000 Total future principal payments $ 988,000 |
Schedule of Fair Value of Derivative Financial Instruments | The fair value of the derivative financial instruments was as follows for the periods presented: Derivative financial instruments Consolidated balance sheet classification September 30, 2022 December 31, 2021 (In thousands) Interest rate caps - asset Other assets $ 59,580 $ 8,809 |
Schedule of the Effect of Derivatives Financial Instruments on Other Comprehensive Income (Loss) | The effect of the derivative financial instruments on other comprehensive income (loss) was as follows: Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Three months ended September 30, 2022 Cash flow hedges $ 21,550 Interest expense — net $ 2,344 $ 19,206 Income tax effect (5,754) Income tax expense (626) (5,128) Net of income taxes $ 15,796 $ 1,718 $ 14,078 Three months ended September 30, 2021 Cash flow hedges $ (222) Interest expense — net $ (1,493) $ 1,271 Income tax effect 59 Income tax expense 399 (340) Net of income taxes $ (163) $ (1,094) $ 931 Derivatives designated as cash flow hedging instruments Amount of gain (loss) recognized in other comprehensive income (loss) Consolidated statement of income classification Amount of net gain (loss) reclassified into earnings Total effect on other comprehensive income (loss) (In thousands) (In thousands) Nine months ended September 30, 2022 Cash flow hedges $ 53,310 Interest expense — net $ 2,173 $ 51,137 Income tax effect (14,234) Income tax expense (1,057) (13,177) Net of income taxes $ 39,076 $ 1,116 $ 37,960 Nine months ended September 30, 2021 Cash flow hedges $ 618 Interest expense — net $ (4,414) $ 5,032 Income tax effect (165) Income tax expense 1,179 (1,344) Net of income taxes $ 453 $ (3,235) $ 3,688 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic | The following tables set forth the computation of basic and diluted earnings per share using the two-class method: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands, except share data) Basic earnings per share: Net income $ 18,248 $ 26,819 $ 62,599 $ 52,766 Allocation of net income to common stockholders: Common stock $ 18,170 $ 26,700 $ 62,334 $ 52,538 Unvested participating shares 78 119 265 228 Net income $ 18,248 $ 26,819 $ 62,599 $ 52,766 Weighted average common shares outstanding: Common stock 57,664,895 60,218,090 58,624,221 60,454,855 Unvested participating shares 248,969 266,331 249,446 255,157 Earnings per common share: Common stock $ 0.32 $ 0.44 $ 1.06 $ 0.87 |
Schedule of Earnings (Loss) Per Share, Diluted | Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 (In thousands, except share data) Diluted earnings per share: Earnings allocated to common stock $ 18,170 $ 26,700 $ 62,334 $ 52,538 Plus: earnings allocated to unvested participating shares 78 119 265 228 Less: adjusted earnings allocated to unvested participating shares (78) (117) (264) (225) Earnings allocated to common stock $ 18,170 $ 26,702 $ 62,335 $ 52,541 Weighted average common shares outstanding: Common stock 57,664,895 60,218,090 58,624,221 60,454,855 Effect of dilutive securities 75,118 525,675 178,521 603,988 Weighted average common shares outstanding — diluted 57,740,013 60,743,765 58,802,742 61,058,843 Earnings per common share: Common stock $ 0.31 $ 0.44 $ 1.06 $ 0.86 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Roll Forward of the Fair Value of Recurring Level 3 Fair Value Measurements | The following table provides a roll forward of the recurring Level 3 fair value measurements: Nine months ended September 30, 2022 (In thousands) Balance at January 1, 2022 $ 27,474 Settlement of contingent consideration liabilities (19,250) Changes in fair value 906 Foreign currency translation (532) Balance at September 30, 2022 $ 8,598 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component were as follows: Nine months ended September 30, 2022 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2022 $ (38,073) $ 738 $ (24) $ (37,359) Other comprehensive income (loss) before reclassifications — net of tax (130,834) 39,076 (237) (91,995) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 1,116 — 1,116 Net other comprehensive income (loss) (130,834) 37,960 (237) (93,111) Balance at September 30, 2022 $ (168,907) $ 38,698 $ (261) $ (130,470) Nine months ended September 30, 2021 Foreign currency Unrealized gain (loss) on Unrealized gain (loss) on Total (In thousands) Balance at January 1, 2021 $ (22,332) $ (4,785) $ 48 $ (27,069) Other comprehensive income (loss) before reclassifications — net of tax (13,548) 453 (48) (13,143) Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax 387 (3,235) — (2,848) Net other comprehensive income (loss) (13,935) 3,688 (48) (10,295) Balance at September 30, 2021 $ (36,267) $ (1,097) $ — $ (37,364) (1) Taxes are not provided for the currency translation adjustments related to the undistributed earnings of foreign subsidiaries that are intended to be indefinitely reinvested. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Revenue and Income from Operations by Segment | Revenue and income (loss) from operations by reportable segment were as follows: Full service Back-up care Educational Total (In thousands) Three months ended September 30, 2022 Revenue $ 380,556 $ 128,606 $ 31,053 $ 540,215 Income (loss) from operations (1) (9,834) 40,405 8,478 39,049 Three months ended September 30, 2021 Revenue $ 333,883 $ 99,197 $ 27,253 $ 460,333 Income from operations 10,070 31,823 4,097 45,990 (1) For the three months ended September 30, 2022, income from operations included $6.7 million of transaction costs related to acquisitions which were allocated to the full service center-based child care segment. Full service Back-up care Educational Total (In thousands) Nine months ended September 30, 2022 Revenue $ 1,105,804 $ 301,164 $ 83,997 $ 1,490,965 Income from operations (1) 17,049 85,982 15,004 118,035 Nine months ended September 30, 2021 Revenue $ 958,629 $ 257,036 $ 76,986 $ 1,292,651 Income (loss) from operations (3,835) 83,782 13,763 93,710 (1) For the nine months ended September 30, 2022, income from operations included $9.2 million of transaction costs related to acquisitions which were allocated to the full service center-based child care segment. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Details) shares in Millions | 9 Months Ended | ||||
Jul. 01, 2022 center | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Dec. 31, 2021 USD ($) | Dec. 16, 2021 USD ($) | |
Line of Credit Facility [Line Items] | |||||
Stock repurchase program, authorized amount | $ 400,000,000 | ||||
Stock repurchased (in shares) | shares | 2 | 0.8 | |||
Stock repurchased | $ 182,300,000 | $ 104,300,000 | |||
Stock repurchase program, remaining authorized repurchase amount | 198,300,000 | ||||
Governmental assistance, reduction to cost of services | 68,600,000 | 32,200,000 | |||
Reduction of operating subsidies for the related child care centers | 25,600,000 | 9,300,000 | |||
Revenue recognized | 224,600,000 | $ 169,200,000 | |||
Only About Children | |||||
Line of Credit Facility [Line Items] | |||||
Number of centers acquired | center | 75 | ||||
Tuition Support | |||||
Line of Credit Facility [Line Items] | |||||
Revenue recognized | 4,600,000 | ||||
Prepaid expenses and other current assets | |||||
Line of Credit Facility [Line Items] | |||||
Due from government assistance programs | 2,900,000 | $ 3,300,000 | |||
Other long-term liabilities | |||||
Line of Credit Facility [Line Items] | |||||
Payroll tax deferrals | 6,100,000 | 3,900,000 | |||
Accounts payable and accrued expenses | |||||
Line of Credit Facility [Line Items] | |||||
Payroll tax deferrals | $ 7,600,000 | $ 7,000,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 540,215 | $ 460,333 | $ 1,490,965 | $ 1,292,651 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 394,355 | 339,787 | 1,109,383 | 946,143 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 145,860 | 120,546 | 381,582 | 346,508 |
Full service center-based child care | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 380,556 | 333,883 | 1,105,804 | 958,629 |
Full service center-based child care | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 243,747 | 221,297 | 744,806 | 630,078 |
Full service center-based child care | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 136,809 | 112,586 | 360,998 | 328,551 |
Back-up care | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 128,606 | 99,197 | 301,164 | 257,036 |
Back-up care | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 119,555 | 91,237 | 280,580 | 239,079 |
Back-up care | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,051 | 7,960 | 20,584 | 17,957 |
Educational advisory and other services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 31,053 | 27,253 | 83,997 | 76,986 |
Educational advisory and other services | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 31,053 | 27,253 | 83,997 | 76,986 |
Educational advisory and other services | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 9 Months Ended | ||
Jul. 01, 2022 center | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Business Acquisition [Line Items] | |||
Revenue recognized | $ | $ 224.6 | $ 169.2 | |
Only About Children | |||
Business Acquisition [Line Items] | |||
Number of centers acquired | center | 75 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Lessee, Lease, Description [Line Items] | |
Total fixed payment obligations for operating lease not yet commenced | $ 28.3 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 10 years |
Operating lease not yet commenced term | 12 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease term | 15 years |
Operating lease not yet commenced term | 15 years |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 37,992 | $ 33,358 | $ 102,879 | $ 100,635 |
Variable lease expense | 10,264 | 9,399 | 29,976 | 23,076 |
Total lease expense | $ 48,256 | $ 42,757 | $ 132,855 | $ 123,711 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 11 years | 10 years |
Weighted average discount rate | 6.70% | 5.80% |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Remainder of 2022 | $ 23,811 | |
2023 | 148,016 | |
2024 | 140,222 | |
2025 | 129,354 | |
2026 | 121,992 | |
Thereafter | 709,667 | |
Total lease payments | 1,273,062 | |
Less imputed interest | (377,796) | |
Present value of lease liabilities | 895,266 | |
Less current portion of operating lease liabilities | (90,710) | $ (87,341) |
Long-term operating lease liabilities | $ 804,556 | $ 703,911 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jul. 01, 2022 USD ($) center | Jul. 01, 2022 AUD ($) center | Dec. 31, 2022 USD ($) | Dec. 31, 2022 AUD ($) | Sep. 30, 2022 USD ($) acquisition | Sep. 30, 2022 USD ($) acquisition center | Sep. 30, 2022 AUD ($) center | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) acquisition center business | Sep. 30, 2022 AUD ($) acquisition | |
Business Acquisition [Line Items] | ||||||||||
Payments to acquire business, net of cash acquired | $ 209,421 | $ 18,914 | ||||||||
Present value of the deferred consideration | 97,653 | 7,337 | ||||||||
Goodwill | $ 1,674,466 | 1,674,466 | $ 1,481,725 | |||||||
Contingent consideration paid | 13,865 | $ 196 | ||||||||
Contingent consideration recorded | $ 13,900 | |||||||||
Forward contracts | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Loss on derivative | $ 5,900 | |||||||||
Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets amortization period | 13 years | 13 years | 14 years | |||||||
Trademarks | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets amortization period | 6 years | 6 years | 6 years | |||||||
Only About Children | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of centers acquired | center | 75 | 75 | ||||||||
Business combination, consideration transferred | $ 310,000 | $ 450 | ||||||||
Payments to acquire business, net of cash acquired | 207,000 | $ 300 | ||||||||
Purchase price allocation adjustments | $ 106,500 | |||||||||
Purchase price allocation adjustments term | 18 months | 18 months | ||||||||
Business acquisition, transaction costs | 9,200 | $ 9,200 | ||||||||
Goodwill | $ 283,466 | |||||||||
Revenue of acquiree since acquisition date, actual | 37,300 | |||||||||
Fixed assets | 21,702 | |||||||||
Only About Children | Forecast | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Working capital adjustments | $ 1,800 | $ 2.6 | ||||||||
Only About Children | Forward contracts | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Loss on derivative | 5,900 | |||||||||
Only About Children | Other long-term liabilities | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Present value of the deferred consideration | 97,700 | $ 141.8 | ||||||||
Only About Children | Other current assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Receivable related to working capital from seller | 1,800 | 1,800 | $ 2.6 | |||||||
Only About Children | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired | $ 23,000 | |||||||||
Finite-lived intangible assets amortization period | 6 years | 6 years | ||||||||
Only About Children | Trademarks | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible assets acquired | $ 7,900 | |||||||||
Finite-lived intangible assets amortization period | 11 years | 11 years | ||||||||
Only About Children | Full service center-based child care | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 283,500 | |||||||||
2022 Acquisitions | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire business, net of cash acquired | 3,300 | |||||||||
Finite-lived intangible assets acquired | 500 | $ 500 | ||||||||
Finite-lived intangible assets amortization period | 4 years | 4 years | ||||||||
Consideration payable | $ 200 | |||||||||
2022 Acquisitions | Full service center-based child care | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Amount of goodwill expected to be deductible for tax purposes | $ 3,100 | $ 3,100 | ||||||||
2022 Acquisitions | Netherlands | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of centers acquired | center | 1 | 1 | ||||||||
2019 Acquisitions | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration paid | $ 19,100 | |||||||||
2021 Acquisitions | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire business, net of cash acquired | $ 53,200 | |||||||||
Finite-lived intangible assets acquired | $ 5,700 | |||||||||
Finite-lived intangible assets amortization period | 5 years | |||||||||
Consideration payable | $ 600 | |||||||||
Contingent consideration paid | $ 200 | 600 | ||||||||
Contingent consideration recorded | $ 7,300 | |||||||||
Number of businesses acquired | business | 5 | |||||||||
Cash acquired from acquisition | $ 2,200 | |||||||||
Number of businesses acquired subject to contingent consideration | acquisition | 2 | |||||||||
Acquisition threshold for contingent consideration | acquisition | 1 | |||||||||
Contingent consideration payable | $ 800 | |||||||||
Fixed assets | 10,100 | |||||||||
Purchase price allocations remaining open | acquisition | 1 | 1 | 1 | |||||||
2021 Acquisitions | Full service center-based child care | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill | 39,500 | |||||||||
Amount of goodwill expected to be deductible for tax purposes | 3,400 | |||||||||
2021 Acquisitions | Back-Up Care Services | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill | 14,600 | |||||||||
2021 Acquisitions | Performance targets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration (up to) | $ 1,200 | |||||||||
Contingent consideration term | 1 year | |||||||||
2021 Acquisitions | United States | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of centers acquired | center | 2 | |||||||||
2021 Acquisitions | United Kingdom | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of centers acquired | center | 13 | |||||||||
2021 Acquisitions | Netherlands | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of centers acquired | center | 3 | |||||||||
Acquisitions in 2021 and 2019 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration paid | $ 19,300 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jul. 01, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,674,466 | $ 1,481,725 | |
Only About Children | |||
Business Acquisition [Line Items] | |||
Cash | $ 4,705 | ||
Accounts receivable and prepaid expenses | 4,295 | ||
Fixed assets | 21,702 | ||
Goodwill | 283,466 | ||
Intangible assets | 30,945 | ||
Operating lease right of use assets | 156,678 | ||
Total assets acquired | 501,791 | ||
Accounts payable and accrued expenses | 17,991 | ||
Deferred revenue and parent deposits | 6,809 | ||
Deferred tax liabilities | 3,392 | ||
Operating lease liabilities | 161,405 | ||
Other long-term liabilities | 5,458 | ||
Total liabilities assumed | 195,055 | ||
Purchase price | $ 306,736 |
Acquisitions - Pro Forma (Detai
Acquisitions - Pro Forma (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 1,559,882 | $ 1,400,372 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 1,481,725 |
Additions from acquisitions | 286,581 |
Effect of foreign currency translation | (93,840) |
Ending balance | 1,674,466 |
Full service center-based child care | |
Goodwill [Roll Forward] | |
Beginning balance | 1,233,096 |
Additions from acquisitions | 286,581 |
Effect of foreign currency translation | (89,264) |
Ending balance | 1,430,413 |
Back-up care | |
Goodwill [Roll Forward] | |
Beginning balance | 208,786 |
Additions from acquisitions | 0 |
Effect of foreign currency translation | (4,576) |
Ending balance | 204,210 |
Educational advisory and other services | |
Goodwill [Roll Forward] | |
Beginning balance | 39,843 |
Additions from acquisitions | 0 |
Effect of foreign currency translation | 0 |
Ending balance | $ 39,843 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Definite-lived intangible assets: | ||
Cost | $ 433,027 | $ 412,757 |
Accumulated amortization | (358,051) | (342,721) |
Net carrying amount | 74,976 | 70,036 |
Intangible Assets: | ||
Cost | 612,780 | 593,753 |
Accumulated amortization | (358,051) | (342,721) |
Net carrying amount | 254,729 | 251,032 |
Trade names | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets: | $ 179,753 | $ 180,996 |
Customer relationships | ||
Definite-lived intangible assets: | ||
Weighted average amortization period | 13 years | 14 years |
Cost | $ 414,770 | $ 400,399 |
Accumulated amortization | (348,502) | (332,571) |
Net carrying amount | 66,268 | 67,828 |
Intangible Assets: | ||
Accumulated amortization | $ (348,502) | $ (332,571) |
Trade names | ||
Definite-lived intangible assets: | ||
Weighted average amortization period | 6 years | 6 years |
Cost | $ 18,257 | $ 12,358 |
Accumulated amortization | (9,549) | (10,150) |
Net carrying amount | 8,708 | 2,208 |
Intangible Assets: | ||
Accumulated amortization | $ (9,549) | $ (10,150) |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Amortization Expense Related to Intangible Assets (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2022 | $ 8,765 |
2023 | 32,762 |
2024 | 16,699 |
2025 | 5,270 |
2026 | $ 3,718 |
Credit Arrangements and Debt _3
Credit Arrangements and Debt Obligations - Senior Secured Credit Facilities (Details) | 9 Months Ended | ||
Nov. 23, 2021 | Sep. 30, 2022 USD ($) | Dec. 31, 2021 | |
Line of Credit | |||
Debt Instrument [Line Items] | |||
Effective interest rate for the term loans | 5.07% | 2.29% | |
Weighted average interest rate | 3.11% | 2.50% | |
Line of Credit | Term loan B | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 600,000,000 | ||
Debt instrument, term | 7 years | ||
Percentage of periodic payment | 1% | ||
Basis spread on variable rate | 1.25% | ||
Debt instrument, interest rate, stated percentage | 2.25% | ||
Line of Credit | Term loan B | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate, floor | 0.50% | ||
Line of Credit | Term loan B | Base Rate | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate, floor | 1.50% | ||
Line of Credit | Term loan A | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | 400,000,000 | ||
Debt instrument, term | 5 years | ||
Line of Credit | Term loan A | Quarterly Payment Rate for First Three Years | |||
Debt Instrument [Line Items] | |||
Percentage of periodic payment | 2.50% | ||
Line of Credit | Term loan A | Payment Rate in Year Four | |||
Debt Instrument [Line Items] | |||
Percentage of periodic payment | 5% | ||
Line of Credit | Term loan A | Payment Rate in Year Five | |||
Debt Instrument [Line Items] | |||
Percentage of periodic payment | 7.50% | ||
Line of Credit | Term loan A | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.005% | ||
Line of Credit | Term loan A | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.0075% | ||
Line of Credit | Term loan A | Base Rate, Floor Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1% | ||
Line of Credit | Term loan A | Eurocurrency | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.015% | ||
Line of Credit | Term loan A | Eurocurrency | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.0175% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 400,000,000 | ||
Effective interest rate for the term loans | 4.65% | ||
Weighted average interest rate | 4.30% | 4% | |
Borrowing outstanding under revolving credit facility | $ 113,000,000 | ||
Net leverage ratio | 4.25 |
Credit Arrangements and Debt _4
Credit Arrangements and Debt Obligations - Outstanding Borrowing (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Borrowings [Line Items] | ||
Total debt | $ 988,000 | |
Less current maturities | (16,000) | $ (16,000) |
Long-term debt | 965,284 | 976,396 |
Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Deferred financing costs and original issue discount | (6,716) | (7,604) |
Total debt | 981,284 | 992,396 |
Less current maturities | (16,000) | (16,000) |
Long-term debt | 965,284 | 976,396 |
Term loan B | Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Term loan | 595,500 | 600,000 |
Term loan A | Line of Credit | ||
Schedule Of Borrowings [Line Items] | ||
Term loan | $ 392,500 | $ 400,000 |
Credit Arrangements and Debt _5
Credit Arrangements and Debt Obligations - Future Principal Payments Under New Term Loan (Details) - Secured Debt $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
Remainder of 2022 | $ 4,000 |
2023 | 16,000 |
2024 | 18,500 |
2025 | 28,500 |
2026 | 351,000 |
Thereafter | 570,000 |
Total future principal payments | $ 988,000 |
Credit Arrangements and Debt _6
Credit Arrangements and Debt Obligations - Derivative Financial Instruments (Details) $ in Millions | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 AUD ($) | Dec. 31, 2021 USD ($) | Jun. 30, 2020 USD ($) | |
Derivatives, Fair Value [Line Items] | ||||
Net gain to be reclassified from accumulated other comprehensive loss and recorded to interest expense during the next twelve months | $ 25,600,000 | |||
Interest rate caps | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 900,000,000 | $ 800,000,000 | ||
Interest rate cap agreement, threshold for interest rate protection | 1% | |||
Interest rate caps | October 31, 2023 | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 300,000,000 | |||
Interest rate caps | October 31, 2023 | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 500,000,000 | |||
Interest rate caps | October 31, 2025 | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 600,000,000 | |||
Interest rate cap agreement, threshold for interest rate protection | 2.50% | |||
Interest rate caps | October 31, 2026 | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 300,000,000 | |||
Interest rate cap agreement, threshold for interest rate protection | 3% | |||
Currency swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative, notional amount | $ 320 | |||
Forward contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Loss on derivative | $ 5,900,000 |
Credit Arrangements and Debt _7
Credit Arrangements and Debt Obligations - Schedule of Derivatives by Balance Sheet Location (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Interest rate caps | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate caps - asset | $ 59,580 | $ 8,809 |
Credit Arrangements and Debt _8
Credit Arrangements and Debt Obligations - Effect of Derivatives on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivatives, Fair Value [Line Items] | ||||
Cash flow hedges | $ (11,707) | $ (9,153) | $ (26,695) | $ (27,749) |
Income tax effect | 9,094 | 10,018 | 22,824 | 13,195 |
Net of income taxes | 18,248 | 26,819 | 62,599 | 52,766 |
Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Gain (Loss) Recognized In Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Net of income taxes | 15,796 | (163) | 39,076 | 453 |
Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Net Gain (Loss) Reclassified Into Earnings | ||||
Derivatives, Fair Value [Line Items] | ||||
Net of income taxes | 1,718 | (1,094) | 1,116 | (3,235) |
Other comprehensive income (loss) before reclassifications — net of tax | Total Effect On Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Net of income taxes | 14,078 | 931 | 37,960 | 3,688 |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Gain (Loss) Recognized In Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Cash flow hedges | 21,550 | (222) | 53,310 | 618 |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Net Gain (Loss) Reclassified Into Earnings | ||||
Derivatives, Fair Value [Line Items] | ||||
Cash flow hedges | 2,344 | (1,493) | 2,173 | (4,414) |
Cash flow hedges | Other comprehensive income (loss) before reclassifications — net of tax | Total Effect On Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Cash flow hedges | 19,206 | 1,271 | 51,137 | 5,032 |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Gain (Loss) Recognized In Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Income tax effect | (5,754) | 59 | (14,234) | (165) |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Amount Of Net Gain (Loss) Reclassified Into Earnings | ||||
Derivatives, Fair Value [Line Items] | ||||
Income tax effect | (626) | 399 | (1,057) | 1,179 |
Income tax effect | Other comprehensive income (loss) before reclassifications — net of tax | Total Effect On Other Comprehensive Income (Loss) | ||||
Derivatives, Fair Value [Line Items] | ||||
Income tax effect | $ (5,128) | $ (340) | $ (13,177) | $ (1,344) |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income | $ 18,248 | $ 26,819 | $ 62,599 | $ 52,766 |
Allocation of net income to common stockholders: | ||||
Common stock | 18,170 | 26,700 | 62,334 | 52,538 |
Unvested participating shares | 78 | 119 | 265 | 228 |
Net income | $ 18,248 | $ 26,819 | $ 62,599 | $ 52,766 |
Weighted average common shares outstanding: | ||||
Weighted average number of common shares (in shares) | 57,664,895 | 60,218,090 | 58,624,221 | 60,454,855 |
Earnings per common share: | ||||
Common stock (in dollars per share) | $ 0.32 | $ 0.44 | $ 1.06 | $ 0.87 |
Unvested participating shares | ||||
Weighted average common shares outstanding: | ||||
Weighted average number of common shares (in shares) | 248,969 | 266,331 | 249,446 | 255,157 |
Earnings Per Share - Computat_2
Earnings Per Share - Computation of Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Earnings allocated to common stock | $ 18,170 | $ 26,700 | $ 62,334 | $ 52,538 |
Plus: earnings allocated to unvested participating shares | 78 | 119 | 265 | 228 |
Less: adjusted earnings allocated to unvested participating shares | (78) | (117) | (264) | (225) |
Earnings allocated to common stock | $ 18,170 | $ 26,702 | $ 62,335 | $ 52,541 |
Weighted average common shares outstanding: | ||||
Common stock (in shares) | 57,664,895 | 60,218,090 | 58,624,221 | 60,454,855 |
Effect of dilutive securities (in shares) | 75,118 | 525,675 | 178,521 | 603,988 |
Weighted average common shares outstanding — diluted (in shares) | 57,740,013 | 60,743,765 | 58,802,742 | 61,058,843 |
Earnings per common share: | ||||
Common stock (in dollars per share) | $ 0.31 | $ 0.44 | $ 1.06 | $ 0.86 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Common Stock | Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Options outstanding to purchase shares of common stock excluded from diluted earnings per share (in shares) | 2.3 | 1 | 1.8 | 0.9 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) tax_audit | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Income Tax Disclosure [Line Items] | |||||
Effective income tax rates | (33.30%) | 27.20% | 26.70% | 20% | |
Increase (decrease) tax, share-based compensation expense | $ 100,000 | $ (800,000) | $ (2,600,000) | $ (5,900,000) | |
Effective income tax rate prior to the inclusion of excess tax benefit and other discrete items (percent) | 29% | 28% | 29% | 28% | |
Unrecognized tax benefits, including interest | $ 3,900,000 | $ 3,900,000 | $ 3,900,000 | ||
Unrecognized tax benefits decrease | 300,000 | ||||
Minimum | |||||
Income Tax Disclosure [Line Items] | |||||
Change in uncertain tax positions | 0 | 0 | |||
Maximum | |||||
Income Tax Disclosure [Line Items] | |||||
Change in uncertain tax positions | $ 200,000 | $ 200,000 | |||
State | |||||
Income Tax Disclosure [Line Items] | |||||
Number of income tax audits in process | tax_audit | 2 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurements Disclosure [Line Items] | |||
Long-term debt | $ 988,000 | $ 988,000 | |
Available-for-sale debt securities fair value | 26,500 | 26,500 | $ 29,900 |
Available-for-sale debt securities amortized cost | 26,800 | 26,800 | 30,000 |
Fair Value, Inputs, Level 2 | |||
Fair Value Measurements Disclosure [Line Items] | |||
Long-term debt, fair value | 964,200 | 964,200 | |
Contingent consideration | |||
Fair Value Measurements Disclosure [Line Items] | |||
Settlement of contingent consideration liabilities | $ (19,300) | $ (19,250) | |
Minimum | |||
Fair Value Measurements Disclosure [Line Items] | |||
Debt securities, remaining maturity term | 1 year | 1 year | |
Maximum | |||
Fair Value Measurements Disclosure [Line Items] | |||
Debt securities, remaining maturity term | 1 year 6 months | 1 year 6 months | |
Other assets | |||
Fair Value Measurements Disclosure [Line Items] | |||
Available-for-sale debt securities fair value | $ 4,000 | $ 4,000 | 7,200 |
Prepaid expenses and other current assets | |||
Fair Value Measurements Disclosure [Line Items] | |||
Available-for-sale debt securities fair value | 22,500 | 22,500 | 22,700 |
Interest rate caps | Other assets | |||
Fair Value Measurements Disclosure [Line Items] | |||
Interest rate caps - asset | $ 59,580 | 59,580 | $ 8,809 |
Forward contracts | |||
Fair Value Measurements Disclosure [Line Items] | |||
Loss on derivative | $ 5,900 |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward of Recurring Level 3 Fair Value Measurements (Details) - Contingent consideration - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Combination, Contingent Consideration, Liability [Roll Forward] | ||
Beginning balance | $ 27,474 | |
Settlement of contingent consideration liabilities | $ (19,300) | (19,250) |
Changes in fair value | 906 | |
Foreign currency translation | (532) | |
Ending balance | $ 8,598 | $ 8,598 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,118,986 | $ 1,271,144 | $ 1,179,276 | $ 1,283,797 |
Other comprehensive income (loss) before reclassifications — net of tax | (91,995) | (13,143) | ||
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 1,116 | (2,848) | ||
Total other comprehensive loss | (53,467) | (13,710) | (93,111) | (10,295) |
Ending balance | 993,756 | 1,259,229 | 993,756 | 1,259,229 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (77,003) | (23,654) | (37,359) | (27,069) |
Total other comprehensive loss | (53,467) | (13,710) | (93,111) | (10,295) |
Ending balance | (130,470) | (37,364) | (130,470) | (37,364) |
Foreign currency translation adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (38,073) | (22,332) | ||
Other comprehensive income (loss) before reclassifications — net of tax | (130,834) | (13,548) | ||
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 0 | 387 | ||
Total other comprehensive loss | (130,834) | (13,935) | ||
Ending balance | (168,907) | (36,267) | (168,907) | (36,267) |
Unrealized gain (loss) on cash flow hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 738 | (4,785) | ||
Other comprehensive income (loss) before reclassifications — net of tax | 39,076 | 453 | ||
Less: amounts reclassified from accumulated other comprehensive income (loss) — net of tax | 1,116 | (3,235) | ||
Total other comprehensive loss | 37,960 | 3,688 | ||
Ending balance | 38,698 | (1,097) | 38,698 | (1,097) |
Unrealized gain (loss) on investments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (24) | 48 | ||
Other comprehensive income (loss) before reclassifications — net of tax | (237) | (48) | ||
Total other comprehensive loss | (237) | (48) | ||
Ending balance | $ (261) | $ 0 | $ (261) | $ 0 |
Segment Information - Income fr
Segment Information - Income from Operations by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 540,215 | $ 460,333 | $ 1,490,965 | $ 1,292,651 |
Income (loss) from operations | 39,049 | 45,990 | 118,035 | 93,710 |
Full service center-based child care | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 380,556 | 333,883 | 1,105,804 | 958,629 |
Occupancy costs | 6,700 | 9,200 | ||
Full service center-based child care | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 380,556 | 333,883 | 1,105,804 | 958,629 |
Income (loss) from operations | (9,834) | 10,070 | 17,049 | (3,835) |
Back-up care | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 128,606 | 99,197 | 301,164 | 257,036 |
Back-up care | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 128,606 | 99,197 | 301,164 | 257,036 |
Income (loss) from operations | 40,405 | 31,823 | 85,982 | 83,782 |
Educational advisory and other services | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 31,053 | 27,253 | 83,997 | 76,986 |
Educational advisory and other services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 31,053 | 27,253 | 83,997 | 76,986 |
Income (loss) from operations | $ 8,478 | $ 4,097 | $ 15,004 | $ 13,763 |