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Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 27, 2013

 

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   001-35780   80-0188269

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification Number)

 

200 Talcott Avenue South

Watertown, MA

   02472

(Address of principal

executive offices)

   (Zip code)

Registrant’s telephone number, including area code: (617) 673-8000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01 Regulation FD Disclosure

Beginning on February 27, 2013, Bright Horizons Family Solutions Inc. intends to use the presentation furnished herewith, or portions thereof, in one or more meetings or presentations with investors and analysts. The presentation will also be available online at http://investors.brighthorizons.com as of February 27, 2013. A copy of the presentation is furnished as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this report, including the exhibits attached hereto, are being furnished and shall not be deemed “filed” for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

  99.1   Slide presentation.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

BRIGHT HORIZONS FAMILY SOLUTIONS INC.
By:  

/s/ Elizabeth Boland

  Name:  Elizabeth Boland
  Title:    Chief Financial Officer

Date: February 27, 2013

EXHIBIT INDEX

Exhibits.

 

  99.1   Slide presentation.
EX-99.1
Investor Presentation
February 2013
Exhibit 99.1

2
Forward Looking Statements | Disclaimer
Bright Horizons Presentation
Certain information contained in this presentation constitutes forward-looking statements
within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. Information regarding future economic performance, financial condition,
prospects, growth, strategies, and expectations and objectives of management are all likely to
include forward-looking statements.  Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts and generally contain words such
as
"believes,"
"expects,"
"may,"
"will,"
"should,"
"seeks,"
“projects,”
"approximately,"
"intends,"
"plans," "estimates" or "anticipates" or similar expressions. Our forward-looking statements
are subject to risks and uncertainties, which may cause actual results to differ materially from
those projected or implied by the forward-looking statement.
Forward-looking statements are based on current expectations and assumptions and
currently available data and are neither predictions nor guarantees of future events or
performance. You should not place undue reliance on forward-looking statements, which
speak
only
as
of
the
date
hereof.
We
do
not
undertake
to
update
or
revise
any
forward-
looking statements after they are made, whether as a result of new information, future events,
or otherwise, except as required by applicable law.

3
Bright Horizons at a Glance
Educational
Advisory Services
(2% of Sales)
Back-Up Care
(12% of Sales)
Full-Service Centers
(86% of Sales)
Bright Horizons Presentation
$1,046m in sales
$171m in Adjusted EBITDA
16% Adjusted EBITDA Margin
776 centers with capacity for 87,700 children
10+ years of sales growth and margin expansion
Long-term contracts with blue chip corporate
clients who co-fund capital investment
97% employer-sponsored center client retention
5x more employer-sponsored centers in the U.S.
than next competitor
Growing international presence
Key Figures (Q3 2012 LTM)
Highlights
Note:  See appendix for reconciliation of Adjusted EBITDA

4
Diversified Portfolio of Opportunity
Bright Horizons Presentation
International Expansion
(LTM 9/30/12 Revenue)
Fast Growing New Services
(LTM 9/30/12 Revenue)
Diversified End Market
(Q3 2012 U.S. Centers)
Europe
15%
North America
85%
Back-Up Care,
College Coach, EdAssist
14%
Center
Based Full-
Service Child
Care 86%
Financial
Services
15%
Technology
5%
Professional
Services and Other
7.5%
Consumer
7.5%
Industrial /
Manufacturing
2.5%
Healthcare
and
Pharmaceuticals
17.5%
Lease / Consortium
30%
Gov’t and
Education
15%
The Company’s largest client
contributes <3% of total revenues,
and the top 10 clients represent
<13% of total revenues
Bright Horizons is well diversified
across a broad array of client
industries
Launched network based back-up
care (BUCA) in 2007
Acquired College Coach in 2006
and launched EdAssist in 2010
776 child care centers
Expanded to UK and Ireland in
2000
Expanded to Netherlands and
India in 2011
Total: $1,046m
Total: $1,046m
Total: 776 Centers
4

5
Employer-Sponsored Childcare and Services is a Large
Market Supported by Secular Growth Trends
Bright Horizons Presentation
Increasing Workforce Participation by
Women and Two Working Parent Families
Greater Demand for High-Quality Center-
Based Care and Early Education
Recognized Return on Investment to
Employer Sponsors
Growing Global Demand for Child Care and
Early Education Services
Families
in
the
United
States
spent
~$43
billion
on
licensed
group
child
care
in
2007
Center-based
market
is
highly
fragmented
–
top 10 providers comprise <10% of the
market
Strong
secular
trends
driving
increasing
prevalence of center-based providers
Bright
Horizons
is
a
pioneer
in
employer
sponsored
child
care
-
one
of
the
first
to
market a shared economic model
Key Driver
s
Our Market
Drives
And
Resulting in
—
64% of mothers with children under 6
participate in workforce
—
90% of center-based providers operate <10
centers

6
Bright Horizons Has Delivered 10+ Years of Uninterrupted
Sales Growth and Margin Expansion
Bright Horizons Presentation
Revenue Growth
Adjusted EBITDA Growth
Note:  See appendix for reconciliation of Adjusted EBITDA
1
y/y% growth rates for the LTM period calculated as year-over-year growth from LTM-9/30/2011 to LTM-9/30/2012; LTM-9/30/2011 Sales and Adjusted EBITDA of $947.6m and $144.6m, respectively.
y/y %
25%
20%
28%
28%
27%
25%
15%
6%
11%
4%
13%
18%¹
y/y%
19%
18%
16%
17%
13%
12%
11%
5%
5%
3%
11%
10%¹

7
Note:  See appendix for reconciliation of Adjusted EBITDA
Significant Growth and Investment in Recent Years
Bright Horizons  Presentation
Sustained growth through challenging economic
conditions
Expanded international footprint: a market leader
in the UK with established presence in
Netherlands and India
Rapidly grew back-up dependent care and
launched new educational advisory services in
the U.S.
Expanded salesforce with specific focus on
cross-selling opportunities to employer clients
Invested in new technologies to better support
service offerings
Expanded marketing efforts with focus on
maximizing occupancy
Select Investment Initiatives
Revenue ($ in millions)
Adjusted EBITDA ($ in millions)

8
Key Performance Drivers
Bright Horizons Presentation
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Stable and Growing Core Business With High Degree of Visibility on Near Term
Growth
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth and Financial Performance
Pricing Power and Operating Leverage Drive Margin Growth
2
3
4
5
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
1

9
Bright Horizons Has Significant Scale and Capabilities
Leading Position With Consistent Quality Built Over 25 Years
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
Partner of
Choice
Provider of
Choice
Employer
of Choice
More than 850 client relationships
Includes more than 130 Fortune 500 companies
776 centers with capacity for 87,700 children
Multi-year contracts with employer-sponsors
Steady, long-term client relationships with 97% client retention
rate for employer-sponsored centers
#1 provider of for-profit employer-sponsored child care in North America
Meet or exceed applicable accreditation standards in all
key markets
70% of eligible centers NAEYC accredited
95+%
parent
and
employer
satisfaction
rating
1
Named one of Fortune Magazine’s “100 Best
Places to Work in America”
Bright Horizons University provides nationally
recognized credentials
Low attrition rate
1
1
2
3
1
Satisfaction
rating
represents
respondents
to
our
employer
and
parent
satisfaction
survey
over
each
of
the
past
5
years.

10
>850 client relationships, 97% client retention rate for
employer-sponsored centers
Partner of Choice for Many Blue Chip Clients
#1 Provider of For-Profit Employer Sponsored Child Care in North America
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
1

11
Key Performance Drivers
Bright Horizons Presentation
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Stable and Growing Core Business With High Degree of Visibility on Near Term
Growth
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth and Financial Performance
Pricing Power and Operating Leverage Drive Margin Growth
1
2
3
4
5

12
Characteristics of the Employer Sponsorship Model
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Work-site locations / built-in enrollment
partner
Industry leading teacher compensation and
benefits
More intensive ratios
Higher quality facilities
NAEYC accreditation
Parent and family partnership
High Quality
Strong, Stable Model
Employer / Developer Sponsorship and
Capital Investment
Sponsor ROI driven through retention,
recruitment, productivity, and employee
engagement levels
Long-term contracts
Stable and recurring revenue stream
Predictable earnings model
Limited capital investment (employer
funding)
Strong and predictable cash generation
2

Client Funding Drives High Return on Investment
Operating Models Offer Attractive Returns on Investment
2
Employer Client Co-funds Capital Expenditures for New Centers and
Sponsors
Employees’
Use
of
Bright
Horizons’
Services
($ in ‘000s)
Cost Plus
Single Sponsor
Consortium Lease
% of Total Centers
30%
30%
40%
Revenue / Center
(U.S.)
$1,600
$1,300
$1,400
Revenue / Center
(Europe)
$750
$650
$1,000
Gross Margin
15-20%
17-25%
20-25%
Average
ROI to Company
100%+
75%+
25%+
Contract
Term
3-5y
3-10y
10-15y
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons

14
Key Performance Drivers
Bright Horizons Presentation
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Stable and Growing Core Business With High Degree of Visibility on Near Term
Growth
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth and Financial Performance
Pricing Power and Operating Leverage Drive Consistent Margin Growth
1
2
3
4
5

15
“Sticky”
Relationships Create Stable Base Business
Growing Established Base of Core Centers
Stable and Growing Core Business With High Degree of Visibility on Near Term Growth
Visibility in
Full-Service
Business
Employer
Sponsorship
Established
Competitive
Advantages
Cost-Plus contracts with defined management fee income not directly driven
by enrollment
Long-Term contracts for P+L centers
Annual price increases typically specified in contracts
Predictable tenure of children in centers as they “age up”
Development
Pipeline
of
12
–
36
months
Employer funding or co-funding center development costs and maintenance
Employer agrees to market service to employees and subsidizes their use
Childcare is a “sticky”
benefit that is difficult to take away even in a downturn
Strong cash flow generation
Long-term established track-record of quality care makes BH the natural
choice
97% client retention rate for employer-sponsored centers
Difficult for smaller scale competitors to replicate consistent service quality
No other competitor with matching suite of services
3

16
Virtuous Circle Sustains Market Leading Position
Building and Maintaining Strong Client Relationships with Employers
Stable and Growing Core Business With High Degree of Visibility on Near Term Growth
3
Reinforce #1
leadership
position
6
Reinvestment
in new center
growth
5
Ability to drive
pricing and
unit
economics
4
Sticky
benefit
with high
switching
costs
3
Clients
co-fund capex
and enter
long-term
contracts
2
Provider of
choice to
diverse
corporate
client base
1
Very
few direct
alternatives
7
Bright
Horizons
1
–
585
Knowledge
Learning
–
107
(CCLC)
Children’s Choice
–
47
Hildebrandt
Learning
Centers
–
41
EduKids
–
12
Top 5 U.S. Employer-Sponsor
Providers
(By Total # of Centers)
Bright Horizons has 5x more employer-sponsored centers in the U.S. than next competitor
Source:  Child Care Exchange, 2012 For Profit Child Care Status Report
1
585 Bright
Horizons
centers
represents
total
employer-sponsored
centers
for
comparability,
Bright
Horizons’
currently
operates
776
total
centers.

Key Performance Drivers
Bright Horizons  Presentation
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Stable and Growing Core Business With High Degree of Visibility on Near Term
Growth
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth and Financial Performance
Pricing Power and Operating Leverage Drive Margin Growth

18
Business Model Operating Leverage Has Delivered
Consistent Adjusted EBITDA and Margin Growth
Pricing Power and Operating Leverage Drive Margin Growth
4
Adjusted EBITDA
CAGR: 17%
766 bps Adjusted
EBITDA Margin
Expansion
Total Net Sales
CAGR: 11%
Increase in Bright Horizons Revenue, Adjusted EBITDA and Annual Adjusted EBITDA Margin
Note:  See appendix for reconciliation of Adjusted EBITDA
Various Drivers of Operating Leverage
Tuition rate increases
Efficient labor and other cost management
Enrollment growth in ramping and mature P+L centers
Contributions from higher margin services
Acquisitions / transitions / mix of new centers
Scale and expand European operations
Overhead Leverage
8.7 %
8.8 %
9.7 %
10.7 %
12.0 %
13.5 %
13.9 %
14.0 %
14.9 %
15.1 %
15.3 %
16.4 %
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
LTM -
9/30

19
Sources of Operating Leverage
Drivers of Margin Expansion
Pricing Power and Operating Leverage Drive Margin Growth
4
Gross Margin Profile
Full-Service Center-Based Care
15 -
25%
Back-Up Dependent Care
30 -
40%
Educational Advisory Services
35 -
45%
Illustrative Tuition by Age Group
Ability to Increase Price in Excess of Wage Inflation
To the individual parent, the cost per child
declines each year as their child gets older
Price increases are consistently applied for
each age bracket
Typically, core center tuition increases
average approximately 3-4% annually
Growth in Higher Margin Services
2009 –
LTM 9/30/2012 Sales CAGR
100%
85%
75%
65%
Infants
Toddler / Twos
Pre School
Kindergarten
6.8%
13.0%
32.9%
Full-Service Center-
Based Care
Back-Up
Dependent Care
Educational
Advisory Services

20
Key Performance Drivers
Bright Horizons  Presentation
Market Leading Provider with Significant Scale in Employer-Sponsored Child Care
Client Funding for New Centers Drives Attractive ROI Model for Bright Horizons
Stable and Growing Core Business With High Degree of Visibility on Near Term
Growth
Pricing Power and Operating Leverage Drive Margin Growth
1
2
3
4
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth and Financial Performance

21
Multiple Drivers of Organic Growth
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth
and
Financial
Performance
New Client Relationships
Cross-Selling /
Existing Clients
Select New Consortium /
Lease Locations
Opportunity exists within
every industry sector
Target Group:
Addressable market of
~15,000 employers with
>1,000 employees in the
U.S. and U.K.
Dedicated sales force
supported by Horizons
Workforce Consulting
Selling both direct and
through channel partners
850 existing clients; 130
Fortune 500 / Leading
Hospitals / Universities
Today, only 15% of existing
clients buy >1 service
We operate >200 centers
for 50 multi-site center
clients with additional
capacity
Track record of 6-12 new
locations per year
Focus on urban or
surrounding markets
Identified 100+ suitable
locations across U.S.,
U.K. and the Netherlands
5
Significant opportunity to
add additional centers with
these existing clients
Note:  As of 9/30/2012
Higher demand and
more supportive
income demographics

22
Significant Whitespace for International Expansion
5
Significant International Opportunity for Bright Horizons
Note: As of 30-September-2012
Europe / India
Centers:  177
Capacity:  12,200
Entered market in:
2011
2000
2000
2011
1986
2001
North America
Centers:  599
Capacity:  75,500
Multiple
and
Diversified
Drivers
Expected
to
Continue
to
Deliver
Strong
Revenue
Growth
and
Financial
Performance

23
Center Growth from New Developments and M&A
5
Since 2001, 55% of Annual New Center Openings Have Been Organic
Track
Record
of
Executing
and
Integrating
Acquisitions
–
Average
of
24
Centers
Acquired
Annually
Since
2001
2001
1 single-site and 1
multi-site
2002
2 multi-sites and 2
single-sites
2003
3 single-sites and 2
multi-sites
2004
2 multi-sites, 2 U.S.
single-sites
2005
1 multi-site
1 single-site Children
First, Inc.
2006
College Coach
7 U.S., 1 UK single-site
and 2 multi-sites
2007
1 U.S. single site
and 3 UK single sites
2008
Work Options Group
3 U.S. single sites
2009
Teddies (UK 32 sites)
2 U.S. single sites
2010
2 U.S. single sites,
1 UK single site
2011
1 multi; 2 single sites
Stake in Kindergarden
NL (20 sites)
2012
27 Casterbridge
Nurseries (UK)
56
87
60
60
72
49
39
38
57
31
64
48
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
9/30/2012
Multiple and Diversified Drivers Expected to Continue to Deliver
Strong Revenue Growth and Financial Performance

24
Strong Financial Performance through 9/30/12
Bright Horizons Presentation
Q1 –
Q3 2011
Q1 –
Q3 2012
% Change
Full-Service Center-Based Care
$ 630.6
$ 689.7
9.4%
Back-Up Dependent Care Services
83.7
94.8
13.2%
Other Educational Advisory Service
10.5
13.1
24.6%
Total Revenue
$ 724.8
$ 797.5
+10.0%
Gross Profit
$ 153.8
$ 182.7
+18.8%
% Margin
21.2%
22.9%
-
Adj. EBITDA
$ 109.7
$ 132.4
+20.7%
% Margin
15.1%
16.6%
-
Note:  See appendix for reconciliation of Adjusted EBITDA

25
Rapid Deleveraging Since Buyout in 2008
Bright Horizons Presentation
Significant
Reduction
in
Total
Debt
/
Adj.
EBITDA
Driven
by
Adj.
EBITDA
Growth
$127
$132
$149
$171
$833
$828
$825
$790
Adj. EBITDA
Total Debt
$69
$102
$154
$147
Unlevered Free Cash Flow
Completed refinancing Jan 2013:
New $790mm Term Loan B
Interest Rate: L + 300bps with 1% floor
6.6 x
6.3 x
5.6 x
4.6 x
2008
2009
2010
2011
LTM 9/30
Note:  Unlevered Free Cash Flow is defined as Adjusted EBITDA - Cash Taxes - Purchases of Fixed Assets +/- change in Net Working Capital.  See appendix for reconciliation of Adjusted EBITDA

26
LTM -
9/2012
Actual
From
Refinancing
LTM
-
9/2012
Pro
Forma
Income from operations
$ 90.3
Net interest expense and other
(80.7)
45.3
(35.4)
(Loss) income before income taxes
$ 9.6
$ 45.3
$ 54.9
Income tax expense
(1.4)
(18.1)
(19.5)
Effective Tax Rate
15%
36%
Net income
$ 8.2
$ 27.2
$ 35.4
Adjustments
27.9
27.9
Adjusted Net Income
$ 36.1
$ 27.2
$ 63.3
Illustrative Effects of Refinancing on LTM Net Income
Bright Horizons Presentation
Note: Reflects $100mm undrawn revolver; $790mm New Term Loan B at L+300, 1% floor, issued at 99 OID.
1
Adjustments
to
Net
Income
net
of
40%
illustrative
tax
rate.
See
Appendix
for
detail.
$ 90.3
1

27
Appendix A: 
Supplemental Materials
Bright Horizons  Presentation

28
Full-Service Center-Based Care
Supplemental Materials
Cost Plus (30% centers)
Employer-funded capex
No margin risk for Bright Horizons
Enrollment not a direct revenue driver
Profit and Loss (70% centers)
Client-funded start-up for single sponsors 
(30% centers)
Higher margins reflecting enrollment risk
Quick ramp from development to maturity
Revenue
Operating Models
$ 755
$ 769
$ 845
$ 904
2009
2010
2011
-
LTM
9/30

Back-Up Dependent Care
Supplemental Materials
Revenue
Center-Based Back-Up Care
Bright Horizons is the leading provider of
dedicated back-up care centers and pioneered
the industry
Increases workforce productivity
Enhances employee retention rates
Reduces absenteeism
99% satisfaction rate by users
Employer purchases uses for its employees
24/7 contact center / web service allowing
employees to reserve in advance or at the last
minute
Access to a contracted network of in-home care
agencies and ~2,500 center-based providers in
locations where we do not otherwise have
centers with available capacity
Back-Up Care Advantage
$ 90
$ 99
$ 115
$ 126
2009
2010
2011
LTM -
9/30
29

30
Educational Advisory Services
Supplemental Materials
Revenue
EdAssist
Employers spend $17 billion annually on tuition
assistance
Largely an unmanaged spend
Educational Advising eliminates wasteful tuition
spending
Also expedites degree completion, saving time and
money
Managed School Network offers higher value and
lower costs
Robust data analytics, consulting, and support
College Coach
$ 8
$ 10
$ 15
$ 17
2009
2010
2011
LTM -
9/30
Adding breadth and depth to work / life services
Saving for College (newborns –
8
th
graders)
Paying for College:  Financial Aid (9
th
–12
graders)
Paying for College:  Scholarships & Loans (9
th
–12
graders)
Homework & Study Skills (2
nd
–
6
th
graders)
Middle School Matters (5
th
–
8
graders)
The High School Plan (9
th
–
10
th
graders)`
Selecting the Right College (11
th
graders)
Preparing College Applications (12
th
graders)
th
th
th

31
Consolidated Historical Financial Performance
Supplemental Materials
Fiscal Year Ended December 31,
2009
2010
2011
LTM –
9/2012
($m)
Revenue:
Full-Service Center-Based Care
$ 754.8
$ 769.2
$ 844.6
$ 903.6
Back-up Dependent Care
89.7
99.1
114.5
125.6
Other Educational Advisory
7.9
9.8
14.6
17.2
Total Revenue
$ 852.3
$ 878.2
$ 973.7
$ 1,046.4
y/y% Growth
-
3.0%
10.9%
10.4%
Gross Profit
$ 179.5
$ 179.9
$ 207.2
$ 236.1
Margin
21.1%
20.5%
21.3%
22.6%
Selling, Gen. and Admin. Expenses
$ 82.8
$ 83.6
$ 92.9
$ 118.7
% of Revenue
9.7%
9.5%
9.5%
11.3%
Amortization
$ 30.0
$ 27.6
$ 27.4
$ 27.0
Income from Operations
$ 66.8
$ 68.7
$ 86.8
$ 90.3
% of Revenue
7.8%
7.8%
8.9%
8.6%
Adjusted EBITDA
$ 127.0
$ 132.2
$ 148.5
$ 171.2
Margin
14.9%
15.1%
15.3%
16.4%
1
y/y% growth rates for the LTM period calculated as year-over-year growth from LTM-9/30/2011 to LTM-9/30/2012; LTM-9/30/2011 Sales and Adjusted EBITDA of $947.6m and $144.6m, respectively.

32
Summary of Adjustments to EBITDA and Net Income
Supplemental Materials
Note:  Adjustments to Net Income net of 40% illustrative tax rate
Fiscal Year Ended December 31,
2009
2010
2011
LTM –
9/2012
Adjustments to EBITDA ($m)
EBITDA
$ 120.1
$ 122.0
$ 143.1
$ 150.0
Straight Line Rent Expense
2.0
5.4
1.7
1.7
Stock Compensation Expense
2.3
2.4
1.2
17.0
Sponsor Management Fee
2.5
2.5
2.5
2.5
Total Adjustments
$ 6.8
$ 10.3
$ 5.4
$ 21.2
Adjusted EBITDA
$ 127.0
$ 132.2
$ 148.5
$ 171.2
Adjustments to Net Income ($m)
Net Income
$(9.5)
$(10.0)
$ 4.8
$ 8.2
Stock Compensation Expense
2.3
2.4
1.2
17.0
Sponsor Management Fee
2.5
2.5
2.5
2.5
Amortization
30.0
27.6
27.4
27.0
Tax Effect
(13.9)
(13.0)
(12.4)
(18.6)
Adjusted Net Income
$ 11.3
$ 9.5
$ 23.4
$ 36.1

33
Estimated Pro Forma Capitalization of Bright Horizons
Supplemental Materials
As of September 30, 2012
Current
Pro Forma
Maturity
Call Date
Call Price
Cash & Equivalents
$ 45
$ 65
-
-
-
Tranche B Term Loans
346
-
May-2015
-
-
Series C New Term Loans
85
-
May-2017
-
101.00
Senior Subordinated Notes
300
-
May-2018
May-2013
105.75
Senior Notes
192
-
Nov-2018
May-2012
106.50
New Term Loan B
-
$ 790
Jan-2020
-
-
Total Senior Debt (net of OID)
$ 914
$782
-
-
-
Net Debt
868
717
-
-
-
Adjusted EBITDA
$ 171
$ 171
-
-
-
Net Debt / Adj. EBITDA
5.1 x
4.2 x
Note:  Capitalization adjusted for (1) receipt of $233mm IPO proceeds, net of total fees and expenses of $22mm (2) application of net proceeds to retire $192mm Senior Notes plus accrued and unpaid interest
through the redemption date, and to pay the $7.5mm sponsor termination fee and (3) $790mm New Term Loan B, net of total fees of $20mm, used to retire extant Tranche B Term Loans, Series C New Term
Loans, and Senior Subordinated Notes; for illustrative purposes, pro forma capitalization assumes 9/30 balance sheet.
Note:  Adj. EBITDA calculated as earnings before interest, taxes, depreciation, amortization, straight line rent expense, stock compensation expense, and sponsor management fee.

34
Bright Horizons Presentation
A Family of Solutions at Work