10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 __________________________________________________

FORM 10-Q

 __________________________________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2014.

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to

Commission file number: 001-35780

__________________________________________________

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

(Exact name of Registrant as specified in its charter)

__________________________________________________

Delaware	80-0188269
(State or other jurisdiction of incorporation)	(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

__________________________________________________

Indicate by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller Reporting Company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in rule 12b-2 of the Exchange Act)    YES  ¨    NO  x

As of July 28, 2014, the Company had 66,020,905 shares of common stock, $0.001 par value, outstanding.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

FORM 10-Q

June 30, 2014

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30

2

PART I. FINANCIAL INFORMATION

t

Item 1. Condensed Consolidated Financial Statements

t

BRIGHT HORIZONS FAMILY SOLUTIONS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
	June 30, 2014			December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	112,283		$	29,585
Accounts receivable—net	58,084			78,691
Prepaid expenses and other current assets	41,286			44,021
Current deferred income taxes	13,028			12,873
Total current assets	224,681			165,170
Fixed assets—net	400,724			390,894
Goodwill	1,104,406			1,096,283
Other intangibles—net	421,877			435,060
Deferred income taxes	239			236
Other assets	14,555			15,027
Total assets	$	2,166,482		$	2,102,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	7,900		$	7,900
Accounts payable and accrued expenses	112,415			107,626
Deferred revenue	113,504			119,260
Other current liabilities	16,236			20,302
Total current liabilities	250,055			255,088
Long-term debt	753,879			756,323
Deferred rent and related obligations	40,278			37,467
Other long-term liabilities	22,351			19,006
Deferred revenue	8,196			5,761
Deferred income taxes	139,995			139,888
Total liabilities	1,214,754			1,213,533
Stockholders’ equity:
Preferred stock, $0.001 par value; 25,000,000 shares authorized and no shares issued or outstanding at June 30, 2014 and December 31, 2013	—			—
Common stock, $0.001 par value; 475,000,000 shares authorized; 65,994,227 and 65,302,814 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	66			65
Additional paid-in capital	1,288,012			1,270,198
Accumulated other comprehensive income	8,430			1,416
Accumulated deficit	(344,780		)	(382,542		)
Total stockholders’ equity	951,728			889,137
Total liabilities and stockholders’ equity	$	2,166,482		$	2,102,670

See notes to condensed consolidated financial statements.

3

BRIGHT HORIZONS FAMILY SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data) (Unaudited)
	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Revenue	$	348,100		$	310,813		$	680,255		$	590,936
Cost of services	264,986			235,388			519,992			449,721
Gross profit	83,114			75,425			160,263			141,215
Selling, general and administrative expenses	33,204			32,426			68,608			76,031
Amortization of intangible assets	7,375			7,602			15,109			14,350
Income from operations	42,535			35,397			76,546			50,834
Loss on extinguishment of debt	—			—			—			(63,682		)
Interest income	11			39			26			60
Interest expense	(8,625		)	(8,963		)	(17,367		)	(22,252		)
Income (loss) before income taxes	33,921			26,473			59,205			(35,040		)
Income tax (expense) benefit	(12,207		)	(1,966		)	(21,443		)	8,766
Net income (loss)	21,714			24,507			37,762			(26,274		)
Net loss attributable to non-controlling interest	—			(72		)	—			(110		)
Net income (loss) attributable to Bright Horizons Family Solutions Inc.	$	21,714		$	24,579		$	37,762		$	(26,164	)
Earnings (loss) per common share:
Common stock—basic	$	0.33		$	0.38		$	0.57		$	(0.43	)
Common stock—diluted	$	0.32		$	0.37		$	0.56		$	(0.43	)
Weighted average number of common shares outstanding:
Common stock—basic	65,772,698			64,732,730			65,590,275			60,265,132
Common stock—diluted	67,456,880			66,635,484			67,333,130			60,265,132

See notes to condensed consolidated financial statements.

4

BRIGHT HORIZONS FAMILY SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) (Unaudited)
	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Net income (loss)	$	21,714	$	24,507	$	37,762	$	(26,274	)
Other comprehensive income (loss):
Foreign currency translation adjustments	5,489		104		7,014		(11,964		)
Total other comprehensive income (loss)	5,489		104		7,014		(11,964		)
Comprehensive income (loss)	27,203		24,611		44,776		(38,238		)
Less: Comprehensive income (loss) attributable to non-controlling interest	—		51		—		(232		)
Comprehensive income (loss) attributable to Bright Horizons Family Solutions Inc.	$	27,203	$	24,560	$	44,776	$	(38,006	)

See notes to condensed consolidated financial statements.

5

BRIGHT HORIZONS FAMILY SOLUTIONS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Six months ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	37,762		$	(26,274	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	38,950			34,601
Amortization of original issue discount and deferred financing costs	1,506			1,255
Loss on extinguishment of debt	—			63,682
Interest paid in kind	—			2,143
(Gain) loss on foreign currency transactions	(24		)	39
Non-cash revenue and other	(159		)	(159		)
Loss on disposal of fixed assets	365			633
Stock-based compensation	4,423			8,305
Deferred rent	1,315			1,363
Deferred income taxes	(159		)	431
Changes in assets and liabilities:
Accounts receivable	20,715			7,691
Prepaid expenses and other current assets	3,041			(18,256		)
Accounts payable and accrued expenses	4,170			5,213
Deferred revenue	(3,657		)	6,884
Accrued rent and related obligations	1,191			6,035
Other assets	551			(1,296		)
Other current and long-term liabilities	(5,621		)	6,136
Net cash provided by operating activities	104,369			98,426
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets, net	(30,701		)	(39,662		)
Payments for acquisitions - net of cash acquired	(6,522		)	(64,213		)
Settlement of purchase price for prior year acquisitions	1,030			—
Net cash used in investing activities	(36,193		)	(103,875		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt, net of issuance costs of $20.6 million	—			769,360
Extinguishment of long-term debt	—			(972,468		)
Proceeds from initial public offering, net of issuance costs of $20.6 million	—			234,944
Principal payments of long-term debt	(3,950		)	(3,950		)
Purchase of treasury stock	(3,079		)	—
Proceeds from issuance of common stock upon exercise of options	11,027			4,668
Proceeds from issuance of restricted stock	4,709			—
Tax benefit from stock-based compensation	5,444			2,791
Net cash provided by financing activities	14,151			35,345
Effect of exchange rates on cash and cash equivalents	371			(1,006		)
Net increase in cash and cash equivalents	82,698			28,890
Cash and cash equivalents—beginning of period	29,585			34,109
Cash and cash equivalents—end of period	$	112,283		$	62,999
NON-CASH TRANSACTIONS:
Fixed asset purchases recorded in accounts payable and accrued expenses	$	2,000		$	—
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments of interest	$	16,439		$	18,268
Cash payments of taxes	$	20,932		$	6,404

See notes to condensed consolidated financial statements.

6

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization—Bright Horizons Family Solutions Inc. (“Bright Horizons” or the “Company”) provides workplace services for employers and families throughout the United States and the United Kingdom, and also in Puerto Rico, Canada, Ireland, the Netherlands, and India. Workplace services include center-based child care, education and enrichment programs, elementary school education, back-up dependent care (for children and elders), before and after school care, college preparation and admissions counseling, tuition reimbursement program management, and other family support services.

The Company provides its center-based child care services under two general business models: a profit and loss ("P&L) model, where the Company assumes the financial risk of operating a child care center; and a cost-plus model, where the Company is paid a fee by an employer client for managing a child care center on a cost-plus basis. The P&L model is further classified into two subcategories: (i) a sponsor model, where Bright Horizons provides child care and early educational services on either an exclusive or priority enrollment basis for employees of a specific employer sponsor; and (ii) a lease/consortium model, where the Company provides child care and early education services to the employees of multiple employers located within a specific real estate development (for example, an office building or office park), as well as to families in the surrounding community. In both our cost-plus and sponsor P&L models, the development of a new child care center, as well as ongoing maintenance and repair, is typically funded by an employer sponsor with whom the Company enters into a multi-year contractual relationship. In addition, employer sponsors typically provide subsidies for the ongoing provision of child care services for their employees. Under each model type, the Company retains responsibility for all aspects of operating the child care and early education center, including the hiring and paying of employees, contracting with vendors, purchasing supplies, and collecting tuition and related accounts receivable.

The Company also provides back-up dependent care services through our own centers and through our Back-Up Care Advantage ("BUCA") program, which offers access to a contracted network of in-home care agencies and center-based providers in locations where we do not otherwise have centers with available capacity.

Basis of Presentation—Bright Horizons is majority-owned by investment funds affiliated with Bain Capital Partners, LLC as a result of a transaction in 2008 (the "Merger"), pursuant to which a wholly owned merger subsidiary was merged with and into Bright Horizons Family Solutions, Inc. (the "Predecessor"). As part of the transaction, a new basis of accounting was established and the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values.

The accompanying unaudited condensed consolidated balance sheet as of June 30, 2014 and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the interim periods ended June 30, 2014 and 2013 have been prepared by the Company, in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required for complete financial statements by generally accepted accounting principles 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, 2013.

In the opinion of the Company’s management, the Company’s unaudited consolidated balance sheet as of June 30, 2014 and the results of its consolidated operations and consolidated cash flows for the interim periods ended June 30, 2014 and 2013, 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.

Reclassifications—The Company has revised the presentation of certain captions for prior periods within the condensed consolidated statements of cash flows to conform to the current period presentation. The Company has separately classified the amortization of original issue discount and deferred financing costs which were previously combined with depreciation and amortization expense. The revision had no impact to net cash provided (used by) operating, investing, or financing activities.

Public Offering—On January 30, 2013, the Company completed an initial public offering (“the Offering”) and, after the exercise of the overallotment option on February 21, 2013, issued a total of 11.6 million shares of common stock in exchange for $233.3 million, net of offering costs including $1.6 million expensed in 2012. The Company used the proceeds of the Offering, as well as certain amounts from the 2013 refinancing discussed below, to repay the principal and accumulated interest under its senior notes outstanding on January 30, 2013.

On January 11, 2013, the Company converted each share of its Class L common stock into 35.1955 shares of Class A common stock, and, immediately following the conversion of its Class L common stock, reclassified the Class A common

7

stock into common stock, for which 475 million shares were authorized. The Company also authorized 25 million shares of undesignated preferred stock for issuance.

On June 19, 2013 and March 25, 2014, certain of the Company’s shareholders completed the sale of 9.8 million and 7.9 million shares, respectively, of the Company’s stock in secondary offerings (“the Secondaries”). The Company did not receive proceeds from the sale of shares in the Secondaries. The Company incurred $0.6 million during the year ended December 31, 2013 in relation to the 2013 secondary offering, as well as $0.6 million during the six months ended June 30, 2014 in relation to the 2014 secondary offering, which are included in selling, general and administrative expenses.

New Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration included in the transaction price and allocating the transaction price to each separate performance obligation. The guidance is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. Early adoption is not permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

2. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended June 30, 2014 are as follows (in thousands):

	Full service center-based care			Back-up dependent care		Other educational advisory services			Total
Beginning balance at December 31, 2013	$	912,134		$	160,145	$	24,004		$	1,096,283
Additions from acquisitions	5,378			—		—			5,378
Adjustments to prior year acquisitions	(315		)	—		(173		)	(488		)
Effect of foreign currency translation	2,748			485		—			3,233
Balance at June 30, 2014	$	919,945		$	160,630	$	23,831		$	1,104,406

The Company also has intangible assets, which consist of the following at June 30, 2014 and December 31, 2013 (in thousands):

	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
June 30, 2014
Definite-lived intangibles:
Customer relationships	14.5 years	$	402,117	$	(168,750	)	$	233,367
Trade names	8.1 years	6,292		(2,032		)	4,260
Non-compete agreements	5 years	56		(42		)	14
		408,465		(170,824		)	237,641
Indefinite-lived intangibles:
Trade names	N/A	184,236		—			184,236
		$	592,701	$	(170,824	)	$	421,877

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	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
December 31, 2013
Definite-lived intangibles:
Customer relationships	14.5 years	$	400,481	$	(153,939	)	$	246,542
Trade names	8.1 years	6,072		(1,542		)	4,530
Non-compete agreements	5 years	54		(39		)	15
		406,607		(155,520		)	251,087
Indefinite-lived intangibles:
Trade names	N/A	183,973		—			183,973
		$	590,580	$	(155,520	)	$	435,060

The Company estimates that it will record amortization expense related to intangible assets existing as of June 30, 2014 as follows over the next five years (in thousands):

	Estimated amortization expense
Remainder of 2014	$	14,103
2015	$	26,733
2016	$	25,465
2017	$	24,640
2018	$	23,676

3. ACQUISITIONS

As part of the Company’s growth strategy to expand through strategic and synergistic acquisitions, the Company has made the following acquisitions in the six months ended June 30, 2014 and year ended December 31, 2013. The goodwill resulting from these acquisitions arises largely from synergies expected from combining the operations of the businesses acquired with our existing operations, as well as from benefits derived from the assembled workforce acquired.

2014 Acquisitions

During the six months ended June 30, 2014, the Company acquired three centers in the United States for cash consideration of $6.5 million. The Company recorded goodwill of $5.4 million related to the full service center-based care segment, which will be deductible for tax purposes. Intangible assets of $1.2 million, consisting primarily of customer relationships, fixed assets of $0.3 million, and a working capital deficit of $0.4 million were also recorded 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 the Company gathers additional information regarding the assets acquired and the liabilities assumed.

2013 Acquisitions

Children’s Choice Learning Centers, Inc.

On July 22, 2013, the Company acquired the outstanding shares of Children’s Choice Learning Centers, Inc., an operator of 49 employer-sponsored child care centers throughout the United States, for cash consideration of $50.8 million, inclusive of certain adjustments. The purchase price was financed with available cash on hand and funds available under the Company’s revolving credit facility, which were repaid in the fourth quarter of 2013.

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The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported September 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Accounts receivable	$	981		$	(126	)	$	855
Prepaid expenses and other assets	334			411			745
Fixed assets	5,637			535			6,172
Intangible assets	12,800			(1,190		)	11,610
Goodwill	38,818			(2,303		)	36,515
Total assets acquired	58,570			(2,673		)	55,897
Accounts payable and accrued expenses	(3,441		)	(801		)	(4,242		)
Deferred revenue and parent deposits	(885		)	18			(867		)
Total liabilities assumed	(4,326		)	(783		)	(5,109		)
Purchase price	$	54,244		$	(3,456	)	$	50,788

The Company recorded goodwill of $36.5 million, which will be deductible for tax purposes as permitted under federal tax rules. Goodwill related to this acquisition is reported within the full service center-based care segment.

Intangible assets consist primarily of $11.3 million of customer relationships that will be amortized over approximately eleven years.

Kidsunlimited Group Limited

On April 10, 2013, the Company entered into a share purchase agreement with Lloyds Development Capital (Holdings) Limited and Kidsunlimited Group Limited pursuant to which it acquired 100% of Kidsunlimited, an operator of 64 nurseries throughout the United Kingdom for cash consideration of $68.9 million, subject to certain adjustments. The purchase price was financed with available cash on hand.

The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported June 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Cash	$	4,888		$	—		$	4,888
Accounts receivable	1,809			—			1,809
Prepaid expenses and other assets	2,509			—			2,509
Fixed assets	13,901			(192		)	13,709
Favorable leases	—			2,892			2,892
Intangible assets	17,442			765			18,207
Goodwill	55,349			(2,372		)	52,977
Total assets acquired	95,898			1,093			96,991
Accounts payable and accrued expenses	(9,450		)	3,798			(5,652		)
Unfavorable leasehold interests	(1,759		)	(5,325		)	(7,084		)
Deferred revenue	(12,853		)	8,378			(4,475		)
Other current liabilities	—			(8,378		)	(8,378		)
Deferred taxes	(2,735		)	245			(2,490		)
Total liabilities assumed	(26,797		)	(1,282		)	(28,079		)
Purchase price	$	69,101		$	(189	)	$	68,912

The Company recorded goodwill of $53.0 million, which will not be deductible for tax purposes. Goodwill related to this acquisition is reported within the full service center-based care segment.

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Intangible assets consist primarily of $15.9 million of customer relationships that will be amortized over approximately eight years. A deferred tax liability of $4.0 million was recorded related to the intangible assets for which the amortization is not deductible for tax purposes.

Pro Forma Information

The operating results for each of the acquisitions are included in the consolidated results of operations from the respective dates of acquisition. The following table presents consolidated pro forma information as if the acquisitions of Children’s Choice Learning Centers, Inc. and Kidsunlimited had occurred on January 1, 2012 (in thousands):

	Pro forma (Unaudited)
	Six Months Ended   June 30, 2013
Revenue	$	633,196
Net loss attributable to Bright Horizons Family Solutions Inc.	$	(24,715	)

The unaudited pro forma results reflect certain adjustments related to the acquisitions, such as increased amortization expense related to the acquired intangible assets.

These acquired businesses contributed total revenues of $62.2 million in the six months ended June 30, 2014. The Company has also determined that the presentation of net income for each of those acquisitions, from the date of acquisition, is impracticable due to the integration of the operations upon acquisition.

4. BORROWING ARRANGEMENTS

Outstanding borrowings were as follows at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Term loans	$	778,150		$	782,100
Deferred financing costs and original issue discount	(16,371		)	(17,877		)
Total debt	761,779			764,223
Less current maturities	7,900			7,900
Long-term debt	$	753,879		$	756,323

The effective interest rate for the term loans was 3.75% at June 30, 2014 and the weighted average interest rate was 3.91% for the six months ended June 30, 2014. There were no borrowings outstanding on the $100.0 million revolving credit facility at June 30, 2014 or during the six months then ended, and the full facility was available for borrowings. The weighted average interest rate for the revolving credit facility was 5.0% for the six months ended June 30, 2014.

The Company incurred financing fees of $12.7 million and original issue discount costs of $7.9 million in connection with the issuance of the term loans and establishment of the revolving credit facility in January 2013. These fees are being amortized over the terms of the related debt instruments. Amortization expense of deferred financing costs and original issue discount costs in the six months ended June 30, 2014 were $0.9 million and $0.6 million, respectively, which are included in interest expense.

The future principal payments under the new term loans at June 30, 2014 are as follows (in thousands):

Remainder of 2014	$	3,950
2015	7,900
2016	7,900
2017	7,900
2018	7,900
Thereafter	742,600
	$	778,150

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5. EARNINGS (LOSS) PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average common shares and potentially dilutive securities outstanding during the period.

Earnings per share is calculated using the two-class method, which requires the allocation of earnings to each class of common stock outstanding and to unvested share-based payment awards that participate in dividends with common stock, also referred to herein as unvested participating shares.

The Company’s unvested share-based payment awards include unvested shares awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The restricted stock awards vest at the end of three years. The unvested shares participate equally in dividends. See Note 6 for a discussion of the current year unvested stock awards and issuances.

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Earnings per Share - Basic

The following table sets forth the computation of earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):

	Three months ended   June 30,				Six months ended   June 30,
	2014		2013		2014		2013
Basic earnings per share:
Net income (loss) attributable to Bright Horizons Family Solutions Inc.	$	21,714	$	24,579	$	37,762	$	(26,164	)
Allocation of net income (loss) to common stockholders:
Common stock	$	21,629	$	24,579	$	37,617	$	(26,164	)
Unvested participating shares	85		—		145		—
	$	21,714	$	24,579	$	37,762	$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698		64,732,730		65,590,275		60,265,132
Unvested participating shares	259,525		—		252,316		—
Earnings (loss) per share:
Common stock	$	0.33	$	0.38	$	0.57	$	(0.43	)

Earnings per Share - Diluted

The Company calculates diluted earnings per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method. The following table sets forth the computation of diluted earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):

	Three months ended   June 30,					Six months ended   June 30,
	2014			2013		2014			2013
Diluted earnings per share:
Earnings allocated to common stock	$	21,629		$	24,579	$	37,617		$	(26,164	)
Plus earnings allocated to unvested participating shares	85			—		145			—
Less adjusted earnings allocated to unvested participating shares	(83		)	—		(141		)	—
Earnings allocated to common stock	$	21,631		$	24,579	$	37,621		$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698			64,732,730		65,590,275			60,265,132
Effect of dilutive securities	1,684,182			1,902,754		1,742,855			—
	67,456,880			66,635,484		67,333,130			60,265,132
Earnings (loss) per share:
Common stock	$	0.32		$	0.37	$	0.56		$	(0.43	)

Options outstanding to purchase 0.9 million shares of common stock were excluded from diluted earnings per share for the three and six months ended June 30, 2014. Options outstanding to purchase 0.4 million shares and 5.0 million shares of common stock were excluded from diluted earnings per share for the three and six months ended June 30, 2013, respectively, since their effect was anti-dilutive, which may be dilutive in the future.

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6. STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

Treasury Stock

On March 28, 2014, the Board of Directors of the Company authorized the potential repurchase of up to $225.0 million of its common stock. During the three months ended June 30, 2014, 78,447 shares were repurchased for $3.1 million under this program. All repurchased shares have been retired.

Equity Incentive Plan

The Company has the 2012 Omnibus Long-Term Incentive Plan (the "Plan"), which became effective on January 24, 2013, and allows for the issuance of equity awards of up to 5 million shares of common stock. As of June 30, 2014, there were approximately 3.5 million shares of common stock available for grant.

During the six months ended June 30, 2014, the Company granted options to purchase 859,627 shares of common stock at a weighted average price of $36.56 per share that have ratable or cliff vesting over one to five years. The weighted average fair value of options granted during the six months ended June 30, 2014 was $11.19 per share. The fair value of each option to purchase common stock was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions: expected dividend yield of 0%; expected volatility of 30.0%; risk free interest rate of 1.82%; and expected life of options of 5.3 years.

Restricted stock awards are also granted at the discretion of the Board of Directors as allowed under the Plan. During the six months ended June 30, 2014, 259,525 shares of restricted stock were granted to certain senior managers and key employees, which vest at the end of three years and are accounted for as nonvested stock. The restricted stock was sold for a price equal to 50% of the fair value of the stock at the date of grant. Proceeds from the issuance of restricted stock are recorded as other liabilities in the consolidated balance sheet until the earlier of vesting or forfeiture of the awards. Stock-based compensation expense for restricted stock awards is calculated based on the fair value of the award on the date of grant, which will be recognized on a straight line basis over the requisite service period. At June 30, 2014, there were 259,525 unvested shares of restricted stock outstanding, which were legally issued at the date of grant but are not considered common stock issued and outstanding in accordance with accounting guidance until the requisite service period is fulfilled.

During the six months ended June 30, 2014, restricted stock units were awarded to members of the Board of Directors as allowed under the Plan. The awards allow for the issuance of a share of the Company's common stock for each vested unit upon the earliest of termination of service as a member of the Board of Directors or five years after the date of the award. The Company issued 6,066 units at a weighted average fair value of $39.58 for a total value of $0.2 million. The units vested upon issuance.

The Company recorded stock-based compensation expense of $4.4 million in selling, general and administrative expenses during the six months ended June 30, 2014.

At June 30, 2014, there was $17.1 million of total unrecognized compensation expense related to unvested share-based compensation arrangements granted under the plans, which is expected to be recognized over the remaining requisite service periods of approximately three years.

7. INCOME TAXES

The Company's effective income tax rates were 36.0% and 7.4% for the three months ended June 30, 2014 and 2013, respectively. For the six months ended June 30, 2014 and 2013, the Company's effective income tax rates were 36.2% and 25.0%, respectively. The effective income tax rate is based upon estimated income before income taxes for the year, the geographical composition of the income and estimated permanent tax adjustments. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including discrete items such as settlement of foreign, Federal and State tax issues.

The Company’s unrecognized tax benefits were $2.0 million at June 30, 2014 and December 31, 2013. Interest and penalties related to unrecognized tax benefits were $1.7 million at June 30, 2014 and $1.6 million at December 31, 2013.

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 statutes of limitations lapse. The impact of the amount of such changes to previously recorded uncertain tax positions could range from zero to $1.0 million, exclusive of interest and penalties.

The Company and its domestic subsidiaries are subject to U.S. Federal income tax as well as 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 income tax returns is three years. The Company's filings for 2010 through 2013 are subject to audit based upon the Federal statute of limitations and there is an ongoing audit of the 2011 tax year.

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State income tax returns are generally subject to examination for a period of three to five 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. There were no significant settlements of state audits during the second quarter of 2014. As of June 30, 2014, there were four income tax audits in process and the tax years from 2010 to 2013 are subject to audit.

The Company is also subject to corporate income tax at its subsidiaries located in the United Kingdom, the Netherlands, India, Canada, 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 seven years.

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date and applies the following fair value 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 (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company uses observable inputs where relevant and whenever possible.

Level 1—Quoted prices are available in active markets for identical investments as of the reporting date.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. The fair value of the Company’s financial instruments approximates their carrying value. As of June 30, 2014, the Company’s long-term debt had a book value of $778.2 million and a fair value of $779.1 million using a model that considers observable inputs (level 2 inputs).

Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents and accounts receivable. The Company mitigates its exposure by maintaining its cash and cash equivalents in financial institutions of high credit standing. The Company’s accounts receivable, which are derived primarily from the services it provides, are 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. The Company believes that no significant credit risk exists at June 30, 2014.

9. SEGMENT INFORMATION

Bright Horizons' work/life services are primarily comprised of full service center-based child care, back-up dependent care, and other educational advisory services. Full service center-based care includes the traditional center-based child care, preschool, and elementary education, which have similar operating characteristics and meet the criteria for aggregation. Full service center-based care derives its revenues primarily from contractual arrangements with corporate clients and from tuition. The Company’s back-up dependent care services consist of center-based back-up child care, in-home care, mildly ill care, and adult/elder care. The Company’s other educational advisory services consists of the remaining services, including college preparation and admissions counseling and tuition assistance, counseling and management services, which do not meet the quantitative thresholds for separate disclosure and are not material for segment reporting individually or in the aggregate. The Company and its chief operating decision makers evaluate performance based on revenues and income from operations.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information is produced or included herein.

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	Full service center-based care		Back-up dependent care		Other educational advisory services		Total
	(In thousands)
Three months ended June 30, 2014
Revenue	$	300,724	$	39,740	$	7,636	$	348,100
Amortization of intangible assets	7,050		181		144		7,375
Income from operations	29,497		12,181		857		42,535
Three months ended June 30, 2013
Revenue	$	269,910	$	35,717	$	5,186	$	310,813
Amortization of intangible assets	7,346		181		75		7,602
Income (loss) from operations (1)	24,062		10,927		408		35,397

(1) For the three months ended June 30, 2013, income from operations includes secondary offering expenses and acquisition related costs of of $0.9 million which has been allocated to full service center-based care.

	Full service center-based care		Back-up dependent care		Other educational advisory services			Total
	(In thousands)
Six months ended June 30, 2014
Revenue	$	587,748	$	77,196	$	15,311		$	680,255
Amortization of intangibles	14,456		362		291			15,109
Income from operations (1)	51,508		23,873		1,165			76,546
Six months ended June 30, 2013
Revenue	$	512,160	$	68,878	$	9,898		$	590,936
Amortization of intangibles	13,837		362		151			14,350
Income (loss) from operations (2)	32,934		18,394		(494		)	50,834

(1) For the six months ended June 30, 2014, income from operations includes secondary offering expenses of $0.6 million which has been allocated to full service center-based care.

(2) For the six months ended June 30, 2013, income from operations includes expenses incurred in connection with the Offering, including a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC, and $5.0 million for certain stock options that vested upon completion of the Offering, and acquisition related costs allocated on a proportionate basis to each segment ($12.2 million to full service center-based care, $1.9 million to back-up dependent care, and $0.8 million to other educational services).

10. TRANSACTIONS WITH RELATED PARTIES

The Company had a management agreement with Bain Capital Partners LLC (the “Sponsor”), which provided for annual payments of $2.5 million through May 2018. In connection with the Offering, the Company and the Sponsor terminated the management agreement in exchange for a $7.5 million payment from the Company to the Sponsor, which is included in selling, general and administrative expenses in the accompanying statement of operations for the six months ended June 30, 2013. As of June 30, 2014, investment funds affiliated with the Sponsor hold approximately 51.6% of our common stock.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This periodic report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “expects,” “may,” “will,” “should,” “seeks,” “projects,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we and our partners operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those listed below and included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013:

• Changes in the demand for child care and other dependent care services;

• Our ability to hire and retain qualified teachers;

• Our substantial indebtedness could affect our financial condition;

• That the terms of our indebtedness could restrict our current and future operations;

• The possibility that acquisitions may disrupt our operations and expose us to additional risk;

• Our reliance on the expertise of operating staff, especially in international markets;

• The possibility that adverse publicity would have a negative impact on the demand for our services and the value of our brand;

• The possibility that our business activities subject us to litigation risks that could result in significant monetary or reputational damages;

• Our ability to pass on our increased costs;

• Changes in our relationships with employer sponsors;

• Our ability to obtain and maintain adequate insurance coverage at a reasonable cost;

• Changes in laws or regulations that govern our business;

• Our ability to withstand seasonal fluctuations in the demand for our services;

• Our ability to retain and attract key management and key employees;

• Significant competition within our industry;

• Our ability to implement our growth strategies successfully;

• Our susceptibility to the economic impact of governmental or universal child care programs in the countries in which we operate;

• Breaches in data security; and

• The impact of a regional or global health pandemic or other catastrophic event.

These factors should not be construed as exhaustive.

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this quarterly report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this quarterly report, those results or developments may not be indicative of results or developments in subsequent periods.

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Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this quarterly report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

Introduction and Overview

The following is a discussion of the significant factors affecting the consolidated operating results, financial condition and liquidity and cash flows of Bright Horizons Family Solutions Inc. (“we” or the “Company”) for the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013. This discussion should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements of the Company and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Our business is subject to seasonal and quarterly fluctuations. Demand for child care and early education and elementary school services has historically decreased during the summer months when school is not in session, at which time families are often on vacation or have alternative child care arrangements. In addition, our enrollment declines as older children transition to elementary schools. Demand for our services generally increases in September and October coinciding with the beginning of the new school year and remains relatively stable throughout the rest of the school year. In addition, use of our back-up dependent care services tends to be higher when schools are not in session and during holiday periods, which can increase the operating costs of the program and impact the results of operations. Results of operations may also fluctuate from quarter to quarter as a result of, among other things, the performance of existing centers, including enrollment and staffing fluctuations, the number and timing of new center openings, acquisitions and management transitions, the length of time required for new centers to achieve profitability, center closings, refurbishment or relocation, the contract model mix (P&L versus cost-plus) of new and existing centers, the timing and level of sponsorship payments, competitive factors and general economic conditions.

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Results of Operations

The following table sets forth statement of operations data as a percentage of revenue for the three months ended June 30, 2014 and 2013 (in thousands, except percentages):

	Three Months Ended June 30,
	2014			%		2013			%
Revenue	$	348,100		100.0	%	$	310,813		100.0	%
Cost of services (1)	264,986			76.1	%	235,388			75.7	%
Gross profit	83,114			23.9	%	75,425			24.3	%
Selling, general and administrative expenses (2)	33,204			9.5	%	32,426			10.4	%
Amortization of intangible assets	7,375			2.1	%	7,602			2.5	%
Income from operations	42,535			12.3	%	35,397			11.4	%
Net interest expense and other	(8,614		)	(2.5	%)	(8,924		)	(2.9	%)
Income before income tax	33,921			9.8	%	26,473			8.5	%
Income tax expense	(12,207		)	(3.5	%)	(1,966		)	(0.6	%)
Net income	$	21,714		6.3	%	$	24,507		7.9	%
Adjusted EBITDA (3)	$	64,443		18.5	%	$	56,673		18.2	%
Adjusted income from operations (3)	$	42,535		12.2	%	$	36,309		11.7	%
Adjusted net income (3)	$	27,517		7.9	%	$	23,104		7.4	%

The following table sets forth statement of operations data as a percentage of revenue for the six months ended June 30, 2014 and 2013 (in thousands, except percentages):

	Six Months Ended June 30,
	2014			%		2013			%
Revenue	$	680,255		100.0	%	$	590,936		100.0	%
Cost of services (1)	519,992			76.4	%	449,721			76.1	%
Gross profit	160,263			23.6	%	141,215			23.9	%
Selling, general and administrative expenses (2)	68,608			10.1	%	76,031			12.9	%
Amortization of intangible assets	15,109			2.2	%	14,350			2.4	%
Income from operations	76,546			11.3	%	50,834			8.6	%
Loss on extinguishment of debt	—			—	%	(63,682		)	(10.8	%)
Net interest expense and other	(17,341		)	(2.5	)%	(22,192		)	(3.7	%)
Income (loss) before income tax	59,205			8.8	%	(35,040		)	(5.9	%)
Income tax (expense) benefit	(21,443		)	(3.2	)%	8,766			1.5	%
Net income (loss)	$	37,762		5.6	%	$	(26,274	)	(4.4	%)
Adjusted EBITDA (3)	$	121,784		17.9	%	$	105,188		17.8	%
Adjusted income from operations (3)	$	77,096		11.3	%	$	65,713		11.1	%
Adjusted net income (3)	$	50,168		7.4	%	$	38,670		6.5	%

(1) Cost of services consists of direct expenses associated with the operation of child care centers, and direct expenses to provide back-up dependent care services, including fees to back-up care providers, and educational advisory services. Direct expenses consist primarily of salaries, taxes and benefits for personnel, food costs, program supplies and materials, parent marketing and facilities costs, which include occupancy costs and depreciation.

(2) Selling, general and administrative expenses consist primarily of salaries, payroll taxes and benefits (including stock compensation costs) for corporate, regional and business development personnel. Other overhead costs include information technology, occupancy costs for corporate and regional personnel, professional services fees, including accounting and legal services, and other general corporate expenses.

(3) Adjusted EBITDA, adjusted income from operations and adjusted net income are non-GAAP measures, which are reconciled to net income (loss) below.

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Three Months Ended June 30, 2014 Compared to the Three Months Ended June 30, 2013

Revenue. Revenue increased$37.3 million, or 12%, to $348.1 million for the three months ended June 30, 2014 from $310.8 million for the same period in the prior year. Revenue growth is primarily attributable to contributions from new and ramping child care and early education centers, expanded sales of our back-up dependent care services and typical annual tuition increases of 3-4%. Revenue generated by full service center-based care services in the three months ended June 30, 2014 increased by $30.8 million, or 11%, when compared to the same period in 2013. Revenue generated by back-up dependent care services in the three months ended June 30, 2014 increased by $4.0 million, or 11%, when compared to the same period in 2013. Additionally, revenue generated by other educational advisory services in the three months ended June 30, 2014 increased by $2.5 million, or 47%, when compared to the same period in 2013.

Our acquisitions of Kidsunlimited, an operator of 64 centers in the United Kingdom on April 10, 2013, and Children’s Choice Learning Centers, Inc. (“Children’s Choice”), an operator of 49 centers in the United States on July 22, 2013, contributed approximately $13.7 million of incremental revenue in the three months ended June 30, 2014. At June 30, 2014, we operated 882 child care and early education centers compared to 830 centers at June 30, 2013.

Cost of Services. Cost of services increased$29.6 million, or 13%, to $265.0 million for the three months ended June 30, 2014 when compared to the same period in the prior year. Cost of services in the full service center-based care services segment increased $26.1 million, or 12%, to $238.8 million in 2014. Personnel costs, which typically represent approximately 70-75% of total cost of services for this segment, increased 11% as a result of a 13% increase in overall enrollment and routine wage increases. In addition, program supplies, materials, food and facilities costs increased 14% in connection with the enrollment growth at new and existing centers, and the incremental occupancy costs associated with centers that have been added since June 30, 2013. Cost of services in the back-up dependent care segment increased $2.2 million, or 11%, to $22.1 million in the three months ended June 30, 2014, primarily for personnel costs and for increased care provider fees associated with the higher levels of back-up services provided. Cost of services in the other educational advisory services segment increased by $1.2 million, or 44%, to $4.1 million in the three months ended June 30, 2014 due to personnel and technology costs related to the incremental sales of these services.

Gross Profit. Gross profit increased$7.7 million, or 10%, to $83.1 million for the three months ended June 30, 2014 when compared to the same period in the prior year. Gross profit margin as a percentage of revenue was 24% for the three months ended June 30, 2014 and 2013. The increase in gross profit is primarily due to contributions from new centers and from ramping P&L centers, which achieve proportionately lower levels of operating costs in relation to revenue as they ramp up enrollment to steady state levels, increased enrollment in our mature P&L centers and expanded back-up services revenue with proportionately lower direct costs of services.

Selling, General and Administrative Expenses ("SGA"). SGA increased$0.8 million, or 2%, to $33.2 million for the three months ended June 30, 2014 compared to $32.4 million for the same period in the prior year, and as a percentage of revenue remained consistent at approximately 10% from the same period in the prior year. Results for the three months ended June 30, 2013 included a $0.6 million of expenses associated with a secondary offering and approximately $0.3 million of costs related to the acquisition of Kidsunlimited, which was completed on April 10, 2013. After taking these respective charges into account, SGA increased over the comparable period due to continued investments in technology and marketing, incremental overhead associated with the operations of acquired businesses, an increase in compensation costs, including annual wage increases and stock-based compensation, as well as routine increases in SGA costs.

Amortization. Amortization expense on intangible assets of $7.4 million for the three months ended June 30, 2014 was consistent with the three months ended June 30, 2013.

Income from Operations. Income from operations increased by $7.1 million, or 20%, to $42.5 million for the three months ended June 30, 2014 when compared to the same period in 2013. Income from operations was 12% of revenue for the three months ended June 30, 2014, compared to 11% of revenue for the three months ended June 30, 2013. The increase in income from operations was due to the following:

• In the full service center-based care segment, income from operations increased $5.4 million for the three months ended June 30, 2014. Results for the three months ended June 30, 2013 included $0.6 million of expenses associated with a secondary offering and $0.3 million of acquisition related costs. In addition to these items, income from operations increased over the comparable period due to the tuition increases and enrollment gains over the prior year as well as contributions from new centers that have been added since June 30, 2013.

• Income from operations for the back-up dependent care segment increased $1.3 million in the three months ended June 30, 2014 due to the expanding revenue base.

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• Income from operations in the other educational advisory services segment increased $0.4 million for the three months ended June 30, 2014 compared to the same period in 2013 due to the expanding revenue base.

Net Interest Expense and Other. Net interest expense and other decreased to $8.6 million for the three months ended June 30, 2014 from $8.9 million for the same period in 2013 due a reduction in the effective interest rate on borrowings.

Income Tax Expense. We recorded income tax expense of $12.2 million during the three months ended June 30, 2014 compared to an income tax expense of $2.0 million during the comparable period in the prior year. The effective rate increased to 36% for the three months ended June 30, 2014 compared to 7% in the three months ended June 30, 2013. This increase was due to the higher projected pre-tax income for the year ending December 31, 2014 compared to 2013.

Adjusted EBITDA and Adjusted Income from Operations. Adjusted EBITDA and adjusted income from operations increased $7.8 million, or 14%, and $6.2 million, or 17%, respectively, for the three months ended June 30, 2014 over the comparable period in 2013 primarily as a result of the increase in gross profit due to additional contributions from full-service centers, including the impact of acquired centers, as well as growth in the back-up dependent care business, offset by modest increases in SGA spending.

Adjusted Net Income. Adjusted net income increased $4.4 million, or 19%, for the three months ended June 30, 2014 when compared to the same period in 2013 primarily due to the incremental gross profit described above, which was offset by increases in SGA spending to support the growth.

Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30, 2013

Revenue. Revenue increased$89.3 million, or 15%, to $680.3 million for the six months ended June 30, 2014 from $590.9 million for the same period in the prior year. Revenue growth is primarily attributable to contributions from new and ramping child care and early education centers, expanded sales of our back-up dependent care services and typical annual tuition increases of 3-4%. Revenue generated by full service center-based care services in the six months ended June 30, 2014 increased by $75.6 million, or 15%, when compared to the same period in 2013. Our acquisitions of Kidsunlimited and Children’s Choice contributed approximately $44.1 million of incremental revenue in the six months ended June 30, 2014.

Revenue generated by back-up dependent care services in the six months ended June 30, 2014 increased by $8.3 million, or 12%, when compared to the same period in 2013. Additionally, revenue generated by other educational advisory services in the six months ended June 30, 2014 increased by $5.4 million, or 55%, when compared to the same period in 2013.

Cost of Services. Cost of services increased $70.3 million, or 16%, to $520.0 million for the six months ended June 30, 2014 when compared to the same period in the prior year. Cost of services in the full service center-based care services segment increased $63.6 million, or 16%, to $468.4 million million in 2014. Personnel costs increased 13% as a result of a 13% increase in overall enrollment and routine wage increases. In addition, program supplies, materials, food and facilities costs increased 22% in connection with the enrollment growth and the incremental occupancy costs associated with centers that have been added since June 30, 2013. Cost of services in the back-up dependent care segment increased $3.6 million, or 9%, to $42.7 million in the six months ended June 30, 2014, primarily for personnel costs and for increased care provider fees associated with the higher levels of back-up services provided. Cost of services in the other educational advisory services segment increased by $3.1 million, or 55%, to $8.9 million in the six months ended June 30, 2014 due to personnel and technology costs related to the incremental sales of these services.

Gross Profit. Gross profit increased$19.0 million, or 13%, to $160.3 million for the six months ended June 30, 2014 when compared to the same period in the prior year. Gross profit margin as a percentage of revenue was 24% for the six months ended June 30, 2014 and 2013. The increase in gross profit is primarily due to contributions from new and acquired centers, increased enrollment in our mature and ramping P&L centers and expanded back-up services revenue with proportionately lower direct cost partially offset by training and integration costs of the 2013 acquisitions as well as costs associated with additional lease model centers opened in 2013 and 2014.

Selling, General and Administrative Expenses. SGA decreased$7.4 million, or 10%, to $68.6 million for the six months ended June 30, 2014 compared to $76.0 million for the same period in the prior year, and as a percentage of revenue decreased to 10% from 13% in the same period in the prior year. Results for the six months ended June 30, 2013 included a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC (“Sponsor termination fee”), a $5.0 million stock-based compensation charge for certain stock options that vested upon completion of the initial public offering (“performance-based stock compensation charge”), $0.6 million of costs associated with the completion of a secondary offering and $1.8 million of acquisition related costs. After taking these respective charges into account, SGA increased over the comparable period due to continued investments in technology and marketing, incremental overhead associated with the operations of acquired businesses, an increase in compensation costs, including annual wage increases and stock-based compensation costs, as well as routine increases in SGA costs compared to the prior year.

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Amortization. Amortization expense on intangible assets totaled $15.1 million for the six months ended June 30, 2014, compared to $14.4 million for the six months ended June 30, 2013 due to acquisitions previously described.

Income from Operations. Income from operations increased by $25.7 million, or 51%, to $76.5 million for the six months ended June 30, 2014 when compared to the same period in 2013. Income from operations was 11% of revenue for the six months ended June 30, 2014, compared to 9% of revenue for the six months ended June 30, 2013. The increase was due to the following:

• In the full service center-based care segment, income from operations increased $18.6 million for the six months ended June 30, 2014. Results for the six months ended June 30, 2013 included an aggregate proportionate charge of $12.2 million for the Sponsor termination fee, the performance-based stock compensation charge, costs associated with the completion of a secondary offering of our common shares and acquisition related costs. After taking these charges into account, income from operations increased $6.9 million in 2014 primarily due to the tuition increases and enrollment gains over the prior year as well as contributions from new and acquired centers that have been added since June 30, 2013, partially offset by incremental overhead from acquired centers during the integration period.

• Income from operations for the back-up dependent care segment increased $5.5 million in the six months ended June 30, 2014. Results for the six months ended June 30, 2013 included an aggregate proportionate charge of $1.8 million for the Sponsor termination fee and the performance-based stock compensation charge. After taking these charges into account, income from operations increased $3.6 million in 2014 due to the expanding revenue base.

• Income from operations in the other educational advisory services segment increased $1.7 million for the six months ended June 30, 2014 compared to the same period in 2013. Results for the six months ended June 30, 2013 included an aggregate proportionate charge of $0.8 million for the Sponsor termination fee and the performance-based stock compensation charge. After taking these charges into account, income from operations increased $0.9 million in 2014.

Loss on Extinguishment of Debt. In connection with the refinancing of all of our existing debt on January 30, 2013, we recorded a loss on extinguishment of debt of $63.7 million which included the redemption premiums and the write-off of existing deferred financing costs.

Net Interest Expense and Other. Net interest expense and other decreased to $17.3 million for the six months ended June 30, 2014 from $22.2 million for the same period in 2013 due to the debt refinancing completed on January 30, 2013, which reduced the borrowings outstanding as well as the interest rate on such borrowings.

Income Tax Expense. We recorded an income tax expense of $21.4 million during the six months ended June 30, 2014 compared to an income tax benefit of $8.8 million during the comparable period in the prior year. The effective rate increased to 36% for the six months ended June 30, 2014 compared to 25% in the prior year, both of which are less than the statutory rate due to the impact of permanent differences, primarily deductions allowed in foreign jurisdictions. The effective income tax rate for the six months ended June 30, 2013 varied from the statutory rate due to the greater impact of permanent adjustments on a lower income before income taxes in 2013. The income was lower in 2013 resulting from the loss on extinguishment of debt, the Sponsor termination fee and the performance-based stock compensation expense in 2013. Additionally, we recognized a previously unrecognized tax benefit of approximately $4.1 million during the six months ended June 30, 2013 upon completion of a tax enquiry in the United Kingdom.

Adjusted EBITDA and Adjusted Income from Operations. Adjusted EBITDA and adjusted income from operations increased$16.6 million, or 16%, and $11.4 million, or 17% respectively, for the six months ended June 30, 2014 over the comparable period in 2013 primarily as a result of the increase in gross profit due to additional contributions from full-service centers, including the impact of acquired centers, as well as the growth in the back-up dependent care business, offset by increases in SGA spending.

Adjusted Net Income. Adjusted net income increased$11.5 million, or 30%, for the six months ended June 30, 2014 when compared to the same period in 2013 primarily due to the incremental gross profit described above, which was offset by increases in SGA spending to support the growth. Adjusted net income also increased due to the reduction in interest expense associated with the refinancing of our debt in January 2013.

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A reconciliation of the non-GAAP measures of adjusted EBITDA, adjusted income from operations and adjusted net income are as follows (in thousands):

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2014			2013			2014			2013
Net income (loss)	$	21,714		$	24,507		$	37,762		$	(26,274	)
Interest expense, net	8,614			8,924			17,341			22,192
Income tax expense (benefit)	12,207			1,966			21,443			(8,766		)
Depreciation	11,960			10,553			23,841			20,251
Amortization of intangible assets (a)	7,375			7,602			15,109			14,350
EBITDA	61,870			53,552			115,496			21,753
Additional Adjustments:
Deferred rent (b)	535			524			1,315			1,363
Stock compensation expense (c)	2,038			1,685			4,423			8,305
Sponsor management fee (d)	—			—			—			7,674
Loss on extinguishment of debt (e)	—			—			—			63,682
Expenses related to secondary offering	—			647			550			647
Acquisition-related costs (f)	—			265			—			1,764
Total adjustments	2,573			3,121			6,288			83,435
Adjusted EBITDA	$	64,443		$	56,673		$	121,784		$	105,188
Income from operations	$	42,535		$	35,397		$	76,546		$	50,834
Performance-based stock compensation (c)	—			—			—			4,968
Sponsor termination fee (d)	—			—			—			7,500
Expenses related to secondary offering	—			647			550			647
Acquisition-related costs (f)	—			265			—			1,764
Adjusted income from operations	$	42,535		$	36,309		$	77,096		$	65,713
Net income (loss)	$	21,714		$	24,507		$	37,762		$	(26,274	)
Income tax expense (benefit)	12,207			1,966			21,443			(8,766		)
Income (loss) before tax	33,921			26,473			59,205			(35,040		)
Stock compensation expense (c)	2,038			1,685			4,423			8,305
Sponsor management fee (d)	—			—			—			7,674
Amortization of intangible assets (a)	7,375			7,602			15,109			14,350
Loss on extinguishment of debt (e)	—			—			—			63,682
Expenses related to secondary offering	—			647			550			647
Acquisition-related costs (f)	—			265			—			1,764
Adjusted income before tax	43,334			36,672			79,287			61,382
Income tax expense (g)	(15,817		)	(13,568		)	(29,119		)	(22,712		)
Adjusted net income	$	27,517		$	23,104		$	50,168		$	38,670

(a) Represents amortization of intangible assets, including approximately $5.0 million for the three months ended June 30, 2014 and 2013, and approximately $10.0 million for the six months ended June 30, 2014 and 2013, associated with intangible assets recorded in connection with our going private transaction in May 2008.

(b) Represents rent in excess of cash paid for rent, recognized on a straight line basis over the life of the lease in accordance with Accounting Standards Codification Topic 840, Leases.

(c) Represents non-cash stock-based compensation expense, including performance-based stock compensation charge in 2013.

(d) Represents fees paid to our Sponsor under a management agreement, including the Sponsor termination fee.

(e) Represents redemption premiums and write off of unamortized debt issue costs and original issue discount associated with indebtedness that was repaid in connection with a refinancing.

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(f) Represents costs associated with the acquisition of businesses.

(g) Represents income tax expense calculated on adjusted income before tax at the effective rate of approximately 37% in 2014 and 2013.

Adjusted EBITDA, adjusted income from operations and adjusted net income are not presentations made in accordance with GAAP, and the use of the terms adjusted EBITDA, adjusted income from operations and adjusted net income may differ from similar measures reported by other companies. We believe that adjusted EBITDA, adjusted income from operations and adjusted net income provide investors with useful information with respect to our historical operations. We present adjusted EBITDA, adjusted income from operations and adjusted net income as supplemental performance measures because we believe they facilitate a comparative assessment of our operating performance relative to our performance based on our results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted EBITDA allows for an assessment of our operating performance and of our ability to service or incur indebtedness without the effect of non-cash charges, such as depreciation, amortization, the excess of rent expense over cash rent expense and stock compensation expense, and the effect of fees associated with our Sponsor management agreement, which was terminated in connection with the completion of our initial public offering on January 30, 2013, as well as the expenses related to the acquisition of businesses. In addition, adjusted income from operations and adjusted net income allow us to assess our performance without the impact of the specifically identified items that we believe do not directly reflect our core operations. These measures also function as benchmarks to evaluate our operating performance. Adjusted EBITDA, adjusted income from operations and adjusted net income are not measurements of our financial performance under GAAP and should not be considered in isolation or as an alternative to income before taxes, net income, net cash provided by operating, investing or financing activities or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. The Company understands that although adjusted EBITDA, adjusted income from operations and adjusted net income are frequently used by securities analysts, lenders and others in their evaluation of companies, they have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• adjusted EBITDA, adjusted income from operations and adjusted net income do not fully reflect the Company’s cash expenditures, future requirements for capital expenditures or contractual commitments;

• adjusted EBITDA, adjusted income from operations and adjusted net income do not reflect changes in, or cash requirements for, the Company’s working capital needs;

• adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future; and

• adjusted EBITDA, adjusted income from operations and adjusted net income do not reflect any cash requirements for such replacements.

Because of these limitations, adjusted EBITDA, adjusted income from operations and adjusted net income should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.

Non-GAAP earnings (loss) per share

On January 30, 2013, the Company completed an initial public offering and, after the exercise of the overallotment option on February 21, 2013, issued a total of 11.6 million shares of common stock. On January 11, 2013, the Company effected a 1–for–1.9704 reverse split of its Class A common stock. In addition, the Company converted each share of its Class L common stock into 35.1955 shares of Class A common stock, and, immediately following the conversion of its Class L common stock, reclassified those shares as well as all outstanding shares of Class A common stock, into common stock. As a result of the reclassification of Class A common stock to common stock, all references to “Class A common stock” have been changed to “common stock” for all periods presented. The number of common shares used in the calculations of diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share for the six months ended June 30, 2013 give effect to the conversion of all weighted average outstanding shares of Class L common stock at the conversion factor of 35.1955 common shares for each Class L share, as if the conversion was completed at the beginning of the period.

The calculations of diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share also include the dilutive effect of common stock options and restricted stock, using the more dilutive of either the two-class method or the treasury stock method. Shares sold in the initial public offering are included in the diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share calculations beginning on the date that

24

such shares were actually issued. Diluted earnings per pro forma common share is calculated using net income in accordance with GAAP. Diluted adjusted earnings per pro forma common share is calculated using adjusted net income, as defined above.

Diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share are not presentations made in accordance with GAAP, and our use of the terms diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share may vary from similar measures reported by others in our industry due to the potential differences in the method of calculation. Diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share should not be considered as alternatives to earnings (loss) per share derived in accordance with GAAP. Diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share have important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, we rely primarily on our GAAP results. However, we believe that presenting diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share is appropriate to provide additional information to investors to compare our performance prior to and after the completion of our initial public offering and related conversion of Class L shares into common as well as to provide investors with useful information regarding our historical operating results. The following table sets forth the computation of diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share:

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2014		2013		2014		2013
	(In thousands, except share data)
Diluted earnings (loss) per pro forma common share:
Net income (loss)	$	21,714	$	24,507	$	37,762	$	(26,274	)
Pro forma weighted average number of common shares—diluted:
Weighted average number of Class L shares over period in which Class L shares were outstanding (1)	—		—		—		1,327,115
Adjustment to weight Class L shares over respective period	—		—		—		(1,253,387		)
Weighted average number of Class L shares over period	—		—		—		73,728
Class L conversion factor	—		—		—		35.1955
Weighted average number of converted Class L common shares	—		—		—		2,594,916
Weighted average number of common shares	65,772,698		64,732,730		65,590,275		60,265,132
Pro forma weighted average number of common shares—basic	65,772,698		64,732,730		65,590,275		62,860,048
Incremental dilutive shares (2)	1,684,182		1,902,754		1,742,855		—
Pro forma weighted average number of common shares—diluted	67,456,880		66,635,484		67,333,130		62,860,048
Diluted earnings (loss) per pro forma common share	$	0.32	$	0.37	$	0.56	$	(0.42	)
Diluted adjusted earnings per pro forma common share:
Adjusted net income	$	27,517	$	23,104	$	50,168	$	38,670
Pro forma weighted average number of common shares—basic	65,772,698		64,732,730		65,590,275		62,860,048
Incremental dilutive shares (2)	1,684,182		1,902,754		1,742,855		1,832,986
Pro forma weighted average number of common shares—diluted	67,456,880		66,635,484		67,333,130		64,693,034
Diluted adjusted earnings per pro forma common share	$	0.41	$	0.35	$	0.74	$	0.60

(1) The weighted average number of Class L shares in the actual Class L earnings per share calculation for the six months ended June 30, 2013 represents the weighted average from the beginning of the period up through the date of conversion of the Class L shares into common shares. As such, the pro forma weighted average number of common

25

shares includes an adjustment to the weighted average number of Class L shares outstanding to reflect the length of time the Class L shares were outstanding prior to conversion relative to the respective three month periods. The converted Class L shares are already included in the weighted average number of common shares outstanding for the period after their conversion.

(2) Represents the dilutive effect of stock options and restricted stock using the two-class method. For purposes of the diluted loss per pro forma common share for the six months ended June 30, 2013, there is no dilutive effect since there was a loss recorded during the period.

Liquidity and Capital Resources

Our primary cash requirements are for the ongoing operations of our existing child care centers, back-up dependent care and other educational advisory services, the addition of new centers through development or acquisition and debt financing obligations. Our primary sources of liquidity are our cash flows from operations and borrowings available under our $100.0 million revolving credit facility. No amounts were outstanding at June 30, 2014 or December 31, 2013 under the revolving credit facility.

We had a working capital deficit of $25.4 million and $89.9 million at June 30, 2014 and December 31, 2013, respectively. Our working capital deficit has arisen from using cash generated from operations to make long-term investments in fixed assets and acquisitions. We anticipate that we will continue to generate positive cash flows from operating activities and that the cash generated will be used principally to fund ongoing operations of our new and existing full service child care centers and expanded operations in the back-up dependent care and educational advisory segments, as well as to make scheduled principal and interest payments.

On January 30, 2013, we completed our initial public offering (the "Offering"), raising $234.9 million, net of expenses, underwriting discounts and commissions, including the exercise of the underwriters' overallotment option which was completed on February 21, 2013. We used the net proceeds from the Offering and certain proceeds from the issuance of a $790.0 million senior secured term loan to redeem our senior notes in full for $213.3 million. We used the remainder of the $790.0 million senior secured term loan to refinance all of the remaining existing indebtedness under the senior credit facilities and the senior subordinated notes. The $790.0 million senior secured term loan has a maturity date in 2020 and is part of an $890.0 million senior credit facility, which includes a $100.0 million revolving credit facility due 2018.

On March 28, 2014, the Board of Directors of the Company approved a $225 million repurchase program of its common stock. 78,447 shares of common stock have been re-acquired and retired as of June 30, 2014.

We believe that funds provided by operations, our existing cash and cash equivalent balances and borrowings available under our revolving line of credit will be adequate to meet planned operating and capital expenditures for at least the next 12 months under current operating conditions. However, if we were to undertake any significant acquisitions or investments in the purchase of facilities for new or existing child care and early education centers, which requires financing beyond our existing borrowing capacity, it may be necessary for us to obtain additional debt or equity financing. We may not be able to obtain such financing on reasonable terms, or at all. As part of our growth strategy, and in addition to making capital expenditures, we expect to continue to make selective acquisitions, which may vary in size and which are less predictable in terms of the timing of the capital requirements.

Cash Flows

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Net cash provided by operating activities	$	104,369		$	98,426
Net cash used in investing activities	$	(36,193	)	$	(103,875	)
Net cash provided by financing activities	$	14,151		$	35,345
Cash and cash equivalents (beginning of period)	$	29,585		$	34,109
Cash and cash equivalents (end of period)	$	112,283		$	62,999

Cash Provided by Operating Activities

Cash provided by operating activities was $104.4 million for the six months ended June 30, 2014, compared to $98.4 million for the same period in 2013. Net income increased by $64.0 million, offset by a decrease in the adjustment for the non-cash loss on extinguishment of debt of $63.7 million recorded in the prior year. In addition, net changes in working

26

capital generated an incremental $8.0 million in operating cash flows due to the timing of accounts receivable collections and payments of operating expenses, offset by a $14.5 million increase in cash taxes paid.

Cash Used in Investing Activities

Cash used in investing activities was $36.2 million for the six months ended June 30, 2014 and was primarily related to fixed asset additions arising from the addition of new child care centers, maintenance and refurbishments in our existing centers, and continued investments in technology, equipment and furnishings. Cash used in investing activities was $103.9 million for the same period in 2013 and included the acquisition of Kidsunlimited for $64.2 million, in addition to fixed asset additions.

Cash Provided by Financing Activities

Cash provided by financing activities amounted to $14.2 million for the six months ended June 30, 2014 compared to $35.3 million for the same period in 2013. Cash provided by financing activities for the six months ended June 30, 2014 consisted principally of proceeds from the exercise of options to purchase common stock of $11.0 million, proceeds from the issuance of restricted stock of $4.7 million, and the tax benefit of stock compensation in the amount of $5.4 million, offset by quarterly principal installments of $4.0 million on our debt and stock repurchases of $3.1 million.

On January 30, 2013, we used the net proceeds of the Offering and certain proceeds from the exercise of the underwriter's overallotment, as well as certain proceeds from the issuance of a $790.0 million senior secured term loan to redeem our senior notes in full for $213.3 million. We used the remainder of the proceeds from the new senior secured term loan to refinance all of the remaining existing indebtedness under the senior credit facilities and the senior subordinated notes.

Debt

Outstanding borrowings were as follows at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Term loans	$	778,150		$	782,100
Deferred financing costs and original issue discount	(16,371		)	(17,877		)
Total debt	761,779			764,223
Less current maturities	7,900			7,900
Long-term debt	$	753,879		$	756,323

The $890.0 million senior secured credit facilities consist of a $790.0 million secured term loan facility and a $100.0 million revolving credit facility. The term loans and revolving credit facility mature on January 30, 2020 and January 30, 2018, respectively. The term loan facility requires quarterly principal payments of $2.0 million, with the remaining balance due at maturity. There were no borrowings outstanding on the revolving credit facility at June 30, 2014 with the entire amount available for borrowings as of that date.

All borrowings under the credit agreement are subject to variable interest rates. Borrowings under the term loan facility bear interest at a rate per annum ranging from 1.75% to 2.0% over the Base Rate, or 2.75% to 3.0% over the Eurocurrency Rate, each as defined in the credit agreement. Borrowings under our revolving facility bear interest at a rate per annum equal to 1.75% over the Base Rate, or 2.75% over the Eurocurrency Rate. The Base Rate is the highest of (1) the prime rate of Goldman Sachs Bank USA, (2) the federal funds effective rate plus 0.5% and (3) the Eurocurrency Rate with a one month interest period plus 1.0%. The Eurocurrency Rate option is the one, two, three or six month LIBOR rate, as selected by Bright Horizons Family Solutions LLC (the "Borrower"), or, with the approval of the applicable lenders, the nine, twelve or less than one month LIBOR rate. The Base Rate is subject to an interest rate floor of 2.0% and the Eurocurrency Rate is subject to an interest rate floor of 1.0%, both only with respect to the term loan facility.

The senior secured credit facilities contain certain customary affirmative covenants and other covenants that, among other things, may restrict the ability of Bright Horizons Family Solutions LLC, our indirect subsidiary, and its restricted subsidiaries, to: incur certain liens; make investments, loans, advances and acquisitions; incur additional indebtedness or guarantees; engage in transactions with affiliates; sell assets, including capital stock of our subsidiaries; alter the business conducted; enter into agreements restricting our subsidiaries’ ability to pay dividends; and, consolidate or merge.

In addition, the credit agreement governing the $890.0 million senior secured credit facilities requires Bright Horizons Capital Corp., our direct subsidiary, to be a passive holding company, subject to certain exceptions. The revolving credit facility requires Bright Horizons Family Solutions LLC, the borrower, and its restricted subsidiaries to comply with a maximum senior secured first lien net leverage ratio financial maintenance covenant, to be tested only if, on the last day of each

27

fiscal quarter, the amount of revolving loans and/or swingline loans outstanding under the revolving credit facility exceed 25% of the revolving commitments on such date. The breach of this covenant is subject to certain equity cure rights.

The credit agreement governing the new senior secured credit facilities contains certain customary affirmative covenants and events of default. We were in compliance with our financial covenants at June 30, 2014.

Off-Balance Sheet Arrangements

As of June 30, 2014, we have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Since December 31, 2013, there have been no significant changes in the Company’s exposures to interest rate or foreign currency rate fluctuations. The Company currently does not enter into derivatives or other market risk sensitive instruments for the purpose of hedging or for trading purposes.

Item 4. Controls and Procedures

As of June 30, 2014, the Company conducted an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) regarding the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods and that such disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an updated version of its Internal Control - Integrated Framework (2013 Framework). Originally issued in 1992 (1992 Framework), the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 1992 Framework remains available during the transition period, which extends to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework. As of June 30, 2014, the Company continues to utilize the 1992 Framework during the transition to the 2013 Framework by the end of 2014.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, subject to claims and suits arising in the ordinary course of business. Such claims have in the past generally been covered by insurance. We believe the resolution of such legal matters will not have a material adverse effect on our financial condition, results of operations or cash flows, although we cannot predict the ultimate outcome of any such actions. Furthermore, there can be no assurance that our insurance will be adequate to cover all liabilities that may arise out of claims brought against us.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in Part I, Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The table below sets forth information regarding the Company's purchases of its equity securities during the three months ended June 30, 2014:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be  Purchased Under the Plans or Programs (In thousands) (1)
April 1, 2014 to April 30, 2014	—	$	—	—	$	225,000
May 1, 2014 to May 31, 2014	78,447	$	39.25	78,447	$	221,921
June 1, 2014 to June 30, 2014	—	$	—	—	$	221,921
	78,447			78,447

(1) On March 28, 2014, the Board of Directors of the Company authorized the potential repurchase of up to $225.0 million of its common stock. In the three months ended June 30, 2014, the Company repurchased 78,447 shares in the open market under this authorization. All repurchased shares have been retired.

Item 3. Defaults Upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Not Applicable.

29

Item 6. Exhibits

(a) Exhibits:

31.1	Principal Executive Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Principal Financial Officer Certification Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant to the Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Ex. 101.INS*	XBRL Instance Document
Ex. 101.SCH*	XBRL Taxonomy Extension Schema Document
Ex. 101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
Ex. 101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
Ex. 101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
Ex. 101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”

30

SIGNATURES

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.
Date:	August 8, 2014	By:	/s/ David Lissy
		David Lissy
		Chief Executive Officer

31

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER, BRIGHT HORIZONS FAMILY SOLUTIONS INC.

I, David Lissy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bright Horizons Family Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2014	/s/ David Lissy
Date	David Lissy
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER, BRIGHT HORIZONS FAMILY SOLUTIONS INC.

I, Elizabeth Boland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bright Horizons Family Solutions Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2014	/s/ Elizabeth Boland
Date	Elizabeth Boland
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bright Horizons Family Solutions Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Lissy, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David Lissy

David Lissy

Chief Executive Officer

Dated: August 8, 2014

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Bright Horizons Family Solutions Inc. and will be retained by Bright Horizons Family Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bright Horizons Family Solutions Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Elizabeth Boland, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Elizabeth Boland

Elizabeth Boland

Chief Financial Officer

Dated: August 8, 2014

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Bright Horizons Family Solutions Inc. and will be retained by Bright Horizons Family Solutions Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Fair Value Measures - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2014 Customer
Fair Value Measurements Disclosure [Line Items]
Long Term Debt, Carrying Value	$ 778,200,000
Fair Value, Inputs, Level 2 [Member]
Fair Value Measurements Disclosure [Line Items]
Long Term Debt, Fair Value	$ 779,100,000
Revenue [Member]
Fair Value Measurements Disclosure [Line Items]
Concentration risk percentage	10.00%
Number of Customer Generating more than 10%	0
Accounts Receivable [Member]
Fair Value Measurements Disclosure [Line Items]
Concentration risk percentage	10.00%
Clients accounting for more than benchmark	0

XML

Borrowing Arrangements - Future Principal Payments Under New Term Loan (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Long Term Debt Maturities Estimated Repayments Of Principal [Line Items]
Long Term Debt Maturities Repayments Of Principal, Total	$ 778,200
Term Loan Facility [Member]
Long Term Debt Maturities Estimated Repayments Of Principal [Line Items]
Future minimum payments remainder of 2014	3,950
Future minimum payments in 2015	7,900
Future minimum payments in 2016	7,900
Future minimum payments in 2017	7,900
Future minimum payments in 2018	7,900
Future minimum payments due thereafter	742,600
Long Term Debt Maturities Repayments Of Principal, Total	$ 778,150

XML

Goodwill and Intangible Assets - Intangible Assets Subject to Amortization (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets, Gross [Abstract]
Cost	$ 408,465	$ 406,607
Accumulated amortization	(170,824)	(155,520)
Net carrying amount	237,641	251,087
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract]
Cost	592,701	590,580
Net carrying amount	421,877	435,060
Contractual Rights and Customer Relationships [Member]
Finite-Lived Intangible Assets, Gross [Abstract]
Weighted average amortization period	14 years 5 months 24 days	14 years 5 months 24 days
Cost	402,117	400,481
Accumulated amortization	(168,750)	(153,939)
Net carrying amount	233,367	246,542
Trade Names [Member]
Finite-Lived Intangible Assets, Gross [Abstract]
Weighted average amortization period	8 years 1 month 24 days	8 years 1 month 6 days
Cost	6,292	6,072
Accumulated amortization	(2,032)	(1,542)
Net carrying amount	4,260	4,530
Non-Compete Agreements [Member]
Finite-Lived Intangible Assets, Gross [Abstract]
Weighted average amortization period	5 years	5 years
Cost	56	54
Accumulated amortization	(42)	(39)
Net carrying amount	14	15
Trade Names [Member]
Finite-Lived Intangible Assets, Gross [Abstract]
Accumulated amortization	0	0
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract]
Cost	184,236	183,973
Net carrying amount	$ 184,236	$ 183,973

XML

Transactions with Related Parties - Additional Information (Detail) (Sponsor [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2014
Sponsor [Member]
Related Party Transaction [Line Items]
Annual payment under the agreement	$ 2.5
Agreement expiration date	May 31, 2018
Agreement termination fee	$ 7.5
Percentage of common stock held by investment funds affiliated with sponsor		51.60%

XML

Stockholders' Equity - Additional Information (Detail) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended				6 Months Ended
	Mar. 28, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 2012 Omnibus Long-Term Incentive Plan [Member]	Jan. 24, 2013 2012 Omnibus Long-Term Incentive Plan [Member]	Jun. 30, 2014 Restricted Stock [Member]	Jun. 30, 2014 Restricted Stock Units (RSUs) [Member]	Jun. 30, 2014 Minimum [Member] 2012 Omnibus Long-Term Incentive Plan [Member]	Jun. 30, 2014 Maximum [Member] 2012 Omnibus Long-Term Incentive Plan [Member]	Jun. 30, 2014 Maximum [Member] Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized stock repurchase amount	$ 225,000,000.0
Number of shares repurchased		78,447
Payments for repurchase of common stock		3,079,000	3,079,000	0
Number of shares authorized for equity awards						5,000,000
Number of shares of common stock available for grant					3,500,000
Number of options granted					859,627
Weighted average price at time of grant (in dollars per share)					$ 36.56
Stock option vesting period									1 year	5 years
Weighted average fair value of options granted (usd per share)			$ 11.19
Expected dividend yield			0.00%
Expected volatility			30.00%
Risk free interest rate			1.82%
Expected life of options			5 years 3 months 18 days
Number of shares granted							259,525	6,066
Restricted stock awards - vesting period							3 years
Restricted stock price as percentage of fair value							50.00%
Unvested shares of restricted stock outstanding							259,525
Maximum period after which awards can be issued											5 years
Weighted average grant date fair value (in dollars per share)								$ 39.58
Total value of granted (and vested) awards								200,000
Total recorded stock-based compensation expense			4,400,000
Total unrecognized compensation expense		$ 17,100,000	$ 17,100,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			3 years

XML

Acquisitions

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Acquisitions

3. ACQUISITIONS

As part of the Company’s growth strategy to expand through strategic and synergistic acquisitions, the Company has made the following acquisitions in the six months ended June 30, 2014 and year ended December 31, 2013. The goodwill resulting from these acquisitions arises largely from synergies expected from combining the operations of the businesses acquired with our existing operations, as well as from benefits derived from the assembled workforce acquired.

2014 Acquisitions

During the six months ended June 30, 2014, the Company acquired three centers in the United States for cash consideration of $6.5 million. The Company recorded goodwill of $5.4 million related to the full service center-based care segment, which will be deductible for tax purposes. Intangible assets of $1.2 million, consisting primarily of customer relationships, fixed assets of $0.3 million, and a working capital deficit of $0.4 million were also recorded 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 the Company gathers additional information regarding the assets acquired and the liabilities assumed.

2013 Acquisitions

Children’s Choice Learning Centers, Inc.

On July 22, 2013, the Company acquired the outstanding shares of Children’s Choice Learning Centers, Inc., an operator of 49 employer-sponsored child care centers throughout the United States, for cash consideration of $50.8 million, inclusive of certain adjustments. The purchase price was financed with available cash on hand and funds available under the Company’s revolving credit facility, which were repaid in the fourth quarter of 2013.

The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported September 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Accounts receivable	$	981		$	(126	)	$	855
Prepaid expenses and other assets	334			411			745
Fixed assets	5,637			535			6,172
Intangible assets	12,800			(1,190		)	11,610
Goodwill	38,818			(2,303		)	36,515
Total assets acquired	58,570			(2,673		)	55,897
Accounts payable and accrued expenses	(3,441		)	(801		)	(4,242		)
Deferred revenue and parent deposits	(885		)	18			(867		)
Total liabilities assumed	(4,326		)	(783		)	(5,109		)
Purchase price	$	54,244		$	(3,456	)	$	50,788

The Company recorded goodwill of $36.5 million, which will be deductible for tax purposes as permitted under federal tax rules. Goodwill related to this acquisition is reported within the full service center-based care segment.

Intangible assets consist primarily of $11.3 million of customer relationships that will be amortized over approximately eleven years.

Kidsunlimited Group Limited

On April 10, 2013, the Company entered into a share purchase agreement with Lloyds Development Capital (Holdings) Limited and Kidsunlimited Group Limited pursuant to which it acquired 100% of Kidsunlimited, an operator of 64 nurseries throughout the United Kingdom for cash consideration of $68.9 million, subject to certain adjustments. The purchase price was financed with available cash on hand.

The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported June 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Cash	$	4,888		$	—		$	4,888
Accounts receivable	1,809			—			1,809
Prepaid expenses and other assets	2,509			—			2,509
Fixed assets	13,901			(192		)	13,709
Favorable leases	—			2,892			2,892
Intangible assets	17,442			765			18,207
Goodwill	55,349			(2,372		)	52,977
Total assets acquired	95,898			1,093			96,991
Accounts payable and accrued expenses	(9,450		)	3,798			(5,652		)
Unfavorable leasehold interests	(1,759		)	(5,325		)	(7,084		)
Deferred revenue	(12,853		)	8,378			(4,475		)
Other current liabilities	—			(8,378		)	(8,378		)
Deferred taxes	(2,735		)	245			(2,490		)
Total liabilities assumed	(26,797		)	(1,282		)	(28,079		)
Purchase price	$	69,101		$	(189	)	$	68,912

The Company recorded goodwill of $53.0 million, which will not be deductible for tax purposes. Goodwill related to this acquisition is reported within the full service center-based care segment.

Intangible assets consist primarily of $15.9 million of customer relationships that will be amortized over approximately eight years. A deferred tax liability of $4.0 million was recorded related to the intangible assets for which the amortization is not deductible for tax purposes.

Pro Forma Information

The operating results for each of the acquisitions are included in the consolidated results of operations from the respective dates of acquisition. The following table presents consolidated pro forma information as if the acquisitions of Children’s Choice Learning Centers, Inc. and Kidsunlimited had occurred on January 1, 2012 (in thousands):

	Pro forma (Unaudited)
	Six Months Ended   June 30, 2013
Revenue	$	633,196
Net loss attributable to Bright Horizons Family Solutions Inc.	$	(24,715	)

The unaudited pro forma results reflect certain adjustments related to the acquisitions, such as increased amortization expense related to the acquired intangible assets.

These acquired businesses contributed total revenues of $62.2 million in the six months ended June 30, 2014. The Company has also determined that the presentation of net income for each of those acquisitions, from the date of acquisition, is impracticable due to the integration of the operations upon acquisition.

XML

Acquisitions - Allocation of Purchase Price (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Kidsunlimited Group Limited [Member]	Jun. 30, 2013 Kidsunlimited Group Limited [Member]	Jun. 30, 2014 Scenario, Adjustment [Member] Kidsunlimited Group Limited [Member]
Business Acquisition [Line Items]
Cash			$ 4,888	$ 4,888	$ 0
Accounts receivable			1,809	1,809	0
Prepaids and other assets			2,509	2,509	0
Fixed assets			13,709	13,901	(192)
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Favorable Leases			2,892	0	2,892
Intangible assets, primarily customer relationships			18,207	17,442	765
Goodwill	1,104,406	1,096,283	52,977	55,349	(2,372)
Total assets acquired			96,991	95,898	1,093
Accounts payable and accrued expenses			(5,652)	(9,450)	3,798
Unfavorable leasehold interests			(7,084)	(1,759)	(5,325)
Deferred revenue and parent deposits			(4,475)	(12,853)	8,378
Other current liabilities			(8,378)	0	(8,378)
Deferred taxes			(2,490)	(2,735)	245
Total liabilities assumed			(28,079)	(26,797)	(1,282)
Purchase price			$ 68,912	$ 69,101	$ (189)

XML

Acquisition - Allocation of Purchased Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Children's Choice Learning Centers [Member]	Sep. 30, 2013 Children's Choice Learning Centers [Member]	Jun. 30, 2014 Scenario, Adjustment [Member] Children's Choice Learning Centers [Member]
Loans At Acquisition Date [Line Items]
Accounts receivable			$ 855	$ 981	$ (126)
Prepaids and other assets			745	334	411
Fixed assets			6,172	5,637	535
Intangible assets, primarily customer relationships			11,610	12,800	(1,190)
Goodwill	1,104,406	1,096,283	36,515	38,818	(2,303)
Total assets acquired			55,897	58,570	(2,673)
Accounts payable and accrued expenses			(4,242)	(3,441)	(801)
Deferred revenue and parent deposits			(867)	(885)	18
Total liabilities assumed			(5,109)	(4,326)	(783)
Purchase price			$ 50,788	$ 54,244	$ (3,456)

XML

Acquisitions - Summary of Operating Results (Detail) (Kidsunlimited Group Limited [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Kidsunlimited Group Limited [Member]
Business Acquisition [Line Items]
Revenue	$ 633,196
Net (loss) income attributable to Bright Horizons Family Solutions Inc.	$ (24,715)

XML

Borrowing Arrangements - Outstanding Borrowing (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule Of Borrowings [Line Items]
Outstanding borrowings	$ 778,200
Deferred financing costs and original issue discount	(16,371)	(17,877)
Total debt	761,779	764,223
Less current maturities	7,900	7,900
Long-term debt	753,879	756,323
Term Loan [Member]
Schedule Of Borrowings [Line Items]
Outstanding borrowings	$ 778,150	$ 782,100
Revolving Credit Facility [Member]
Schedule Of Borrowings [Line Items]
Debt, Weighted Average Interest Rate	5.00%

XML

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

2. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the six months ended June 30, 2014 are as follows (in thousands):

	Full service center-based care			Back-up dependent care		Other educational advisory services			Total
Beginning balance at December 31, 2013	$	912,134		$	160,145	$	24,004		$	1,096,283
Additions from acquisitions	5,378			—		—			5,378
Adjustments to prior year acquisitions	(315		)	—		(173		)	(488		)
Effect of foreign currency translation	2,748			485		—			3,233
Balance at June 30, 2014	$	919,945		$	160,630	$	23,831		$	1,104,406

The Company also has intangible assets, which consist of the following at June 30, 2014 and December 31, 2013 (in thousands):

	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
June 30, 2014
Definite-lived intangibles:
Customer relationships	14.5 years	$	402,117	$	(168,750	)	$	233,367
Trade names	8.1 years	6,292		(2,032		)	4,260
Non-compete agreements	5 years	56		(42		)	14
		408,465		(170,824		)	237,641
Indefinite-lived intangibles:
Trade names	N/A	184,236		—			184,236
		$	592,701	$	(170,824	)	$	421,877

	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
December 31, 2013
Definite-lived intangibles:
Customer relationships	14.5 years	$	400,481	$	(153,939	)	$	246,542
Trade names	8.1 years	6,072		(1,542		)	4,530
Non-compete agreements	5 years	54		(39		)	15
		406,607		(155,520		)	251,087
Indefinite-lived intangibles:
Trade names	N/A	183,973		—			183,973
		$	590,580	$	(155,520	)	$	435,060

The Company estimates that it will record amortization expense related to intangible assets existing as of June 30, 2014 as follows over the next five years (in thousands):

	Estimated amortization expense
Remainder of 2014	$	14,103
2015	$	26,733
2016	$	25,465
2017	$	24,640
2018	$	23,676

XML

Borrowing Arrangements - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Debt Instrument [Line Items]
Effective interest rate for the term loans	3.75%
Financing Fees	$ 12.7
Discount and Issuance Cost	7.9
Amortization of deferred financing costs	0.9
Amortization expense of original issuance discount costs	0.6
Term Loan Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	3.91%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	5.00%
Line of Credit Facility, Maximum Borrowing Capacity	$ 100.0

XML

Segment Information - Income from Operations by Segment (Detail) (USD $)	3 Months Ended			6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Segment Reporting Information [Line Items]
Revenue	$ 348,100,000	$ 310,813,000		$ 680,255,000		$ 590,936,000
Amortization of intangibles	7,375,000	7,602,000		15,109,000		14,350,000
Income (loss) from operations	42,535,000	35,397,000	[1]	76,546,000	[2]	50,834,000	[3]
Full Service Center-based Care [Member]
Segment Reporting Information [Line Items]
Acquisition related costs		900,000		600,000
Revenue				587,748,000		512,160,000
Amortization of intangibles				14,456,000		13,837,000
Income (loss) from operations				51,508,000	[2]	32,934,000	[3]
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost						12,200,000
Back-up Dependent Care [Member]
Segment Reporting Information [Line Items]
Revenue				77,196,000		68,878,000
Amortization of intangibles				362,000		362,000
Income (loss) from operations				23,873,000	[2]	18,394,000	[3]
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost						1,900,000
Other Educational Advisory Services [Member]
Segment Reporting Information [Line Items]
Revenue				15,311,000		9,898,000
Amortization of intangibles				291,000		151,000
Income (loss) from operations				1,165,000	[2]	(494,000)	[3]
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost						800,000
Operating Segments [Member] | Full Service Center-based Care [Member]
Segment Reporting Information [Line Items]
Revenue	300,724,000	269,910,000
Amortization of intangibles	7,050,000	7,346,000
Income (loss) from operations	29,497,000	24,062,000	[1]
Operating Segments [Member] | Back-up Dependent Care [Member]
Segment Reporting Information [Line Items]
Revenue	39,740,000	35,717,000
Amortization of intangibles	181,000	181,000
Income (loss) from operations	12,181,000	10,927,000	[1]
Operating Segments [Member] | Other Educational Advisory Services [Member]
Segment Reporting Information [Line Items]
Revenue	7,636,000	5,186,000
Amortization of intangibles	144,000	75,000
Income (loss) from operations	857,000	408,000	[1]
Affiliated Entity [Member]
Segment Reporting Information [Line Items]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party						$ 7,500,000

[1] (1) For the three months ended June 30, 2013, income from operations includes secondary offering expenses and acquisition related costs of of $0.9 million which has been allocated to full service center-based care.

[2] For the six months ended June 30, 2014, income from operations includes secondary offering expenses of $0.6 million which has been allocated to full service center-based care.

[3] For the six months ended June 30, 2013, income from operations includes expenses incurred in connection with the Offering, including a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC, and $5.0 million for certain stock options that vested upon completion of the Offering, and acquisition related costs allocated on a proportionate basis to each segment ($12.2 million to full service center-based care, $1.9 million to back-up dependent care, and $0.8 million to other educational services).

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 112,283	$ 29,585
Accounts receivable—net	58,084	78,691
Prepaid expenses and other current assets	41,286	44,021
Current deferred income taxes	13,028	12,873
Total current assets	224,681	165,170
Fixed assets—net	400,724	390,894
Goodwill	1,104,406	1,096,283
Other intangibles—net	421,877	435,060
Deferred income taxes	239	236
Other assets	14,555	15,027
Total assets	2,166,482	2,102,670
Current liabilities:
Current portion of long-term debt	7,900	7,900
Accounts payable and accrued expenses	112,415	107,626
Deferred revenue	113,504	119,260
Other current liabilities	16,236	20,302
Total current liabilities	250,055	255,088
Long-term debt	753,879	756,323
Deferred rent and related obligations	40,278	37,467
Other long-term liabilities	22,351	19,006
Deferred revenue	8,196	5,761
Deferred income taxes	139,995	139,888
Total liabilities	1,214,754	1,213,533
Stockholders’ equity:
Preferred stock, $0.001 par value; 25,000,000 shares authorized and no shares issued or outstanding at June 30, 2014 and December 31, 2013	0	0
Common stock, $0.001 par value; 475,000,000 shares authorized; 65,994,227 and 65,302,814 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	66	65
Additional paid-in capital	1,288,012	1,270,198
Accumulated other comprehensive income	8,430	1,416
Accumulated deficit	(344,780)	(382,542)
Total stockholders’ equity	951,728	889,137
Total liabilities and stockholders’ equity	$ 2,166,482	$ 2,102,670

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Condensed Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 37,762,000	$ (26,274,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	38,950,000	34,601,000
Amortization of original issue discount and deferred financing costs	1,506,000	1,255,000
Loss on extinguishment of debt	0	63,682,000
Interest paid in kind	0	2,143,000
(Gain) loss on foreign currency transactions	(24,000)	39,000
Non-cash revenue and other	(159,000)	(159,000)
Loss on disposal of fixed assets	365,000	633,000
Stock-based compensation	4,423,000	8,305,000
Deferred rent	1,315,000	1,363,000
Deferred income taxes	(159,000)	431,000
Changes in assets and liabilities:
Accounts receivable	20,715,000	7,691,000
Prepaid expenses and other current assets	3,041,000	(18,256,000)
Accounts payable and accrued expenses	4,170,000	5,213,000
Deferred revenue	(3,657,000)	6,884,000
Accrued rent and related obligations	1,191,000	6,035,000
Other assets	551,000	(1,296,000)
Other current and long-term liabilities	(5,621,000)	6,136,000
Net cash provided by operating activities	104,369,000	98,426,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets, net	(30,701,000)	(39,662,000)
Payments for acquisitions - net of cash acquired	(6,522,000)	(64,213,000)
Settlement of purchase price for prior year acquisitions	1,030,000	0
Net cash used in investing activities	(36,193,000)	(103,875,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt, net of issuance costs of $20.6 million	0	769,360,000
Extinguishment of long-term debt	0	(972,468,000)
Proceeds from initial public offering, net of issuance costs of $20.6 million	0	234,944,000
Principal payments of long-term debt	(3,950,000)	(3,950,000)
Purchase of treasury stock	3,079,000	0
Proceeds from issuance of common stock upon exercise of options	11,027,000	4,668,000
Proceeds from issuance of restricted stock	4,709,000	0
Tax benefit from stock-based compensation	5,444,000	2,791,000
Net cash provided by financing activities	14,151,000	35,345,000
Effect of exchange rates on cash and cash equivalents	371,000	(1,006,000)
Net increase in cash and cash equivalents	82,698,000	28,890,000
Cash and cash equivalents—beginning of period	29,585,000	34,109,000
Cash and cash equivalents—end of period	112,283,000
NON-CASH TRANSACTIONS:
Fixed asset purchases recorded in accounts payable and accrued expenses	2,000,000	0
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash payments of interest	16,439,000	18,268,000
Cash payments of taxes	$ 20,932,000	$ 6,404,000

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Earnings (Loss) Per Share - Computation of Basic Earnings Per Common Share (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Calculation Of Numerator And Denominator In Earnings Per Share [Line Items]
Allocation of net income (loss) to common stock	$ 21,714,000	$ 24,579,000	$ 37,762,000	$ (26,164,000)
Weighted average number of common shares:
Weighted average number (shares)	65,772,698	64,732,730	65,590,275	60,265,132
Earnings (loss) per share:
Common stock-basic (usd per share)	$ 0.33	$ 0.38	$ 0.57	$ (0.43)
Common Stock [Member]
Calculation Of Numerator And Denominator In Earnings Per Share [Line Items]
Allocation of net income (loss) to common stock	21,629,000	24,579,000	37,617,000	(26,164,000)
Weighted average number of common shares:
Weighted average number (shares)	65,772,698	64,732,730	65,590,275	60,265,132
Unvested Participating Shares [Member]
Calculation Of Numerator And Denominator In Earnings Per Share [Line Items]
Allocation of net income (loss) to common stock	$ 85,000	$ 0	$ 145,000	$ 0
Weighted average number of common shares:
Weighted average number (shares)	259,525	0	252,316	0

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Income from Operations by Segment

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information is produced or included herein.

	Full service center-based care		Back-up dependent care		Other educational advisory services		Total
	(In thousands)
Three months ended June 30, 2014
Revenue	$	300,724	$	39,740	$	7,636	$	348,100
Amortization of intangible assets	7,050		181		144		7,375
Income from operations	29,497		12,181		857		42,535
Three months ended June 30, 2013
Revenue	$	269,910	$	35,717	$	5,186	$	310,813
Amortization of intangible assets	7,346		181		75		7,602
Income (loss) from operations (1)	24,062		10,927		408		35,397

(1) For the three months ended June 30, 2013, income from operations includes secondary offering expenses and acquisition related costs of of $0.9 million which has been allocated to full service center-based care.

	Full service center-based care		Back-up dependent care		Other educational advisory services			Total
	(In thousands)
Six months ended June 30, 2014
Revenue	$	587,748	$	77,196	$	15,311		$	680,255
Amortization of intangibles	14,456		362		291			15,109
Income from operations (1)	51,508		23,873		1,165			76,546
Six months ended June 30, 2013
Revenue	$	512,160	$	68,878	$	9,898		$	590,936
Amortization of intangibles	13,837		362		151			14,350
Income (loss) from operations (2)	32,934		18,394		(494		)	50,834

(1) For the six months ended June 30, 2014, income from operations includes secondary offering expenses of $0.6 million which has been allocated to full service center-based care.

(2) For the six months ended June 30, 2013, income from operations includes expenses incurred in connection with the Offering, including a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC, and $5.0 million for certain stock options that vested upon completion of the Offering, and acquisition related costs allocated on a proportionate basis to each segment ($12.2 million to full service center-based care, $1.9 million to back-up dependent care, and $0.8 million to other educational services).

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Earnings (Loss) Per Share Earnings (Loss) Per Share - Computation of Diluted Earnings per Common Share (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Diluted earnings per share:
Allocation of net income (loss) to common stock	$ 21,714,000	$ 24,579,000	$ 37,762,000	$ (26,164,000)
Earnings allocated to common stock	21,631,000	24,579,000	37,621,000	(26,164,000)
Weighted average number of common shares:
Common stock-basic (shares)	65,772,698	64,732,730	65,590,275	60,265,132
Common stock-diluted (shares)	67,456,880	66,635,484	67,333,130	60,265,132
Earnings (loss) per share:
Common stock-diluted (usd per share)	$ 0.32	$ 0.37	$ 0.56	$ (0.43)
Common Stock [Member]
Diluted earnings per share:
Allocation of net income (loss) to common stock	21,629,000	24,579,000	37,617,000	(26,164,000)
Weighted average number of common shares:
Common stock-basic (shares)	65,772,698	64,732,730	65,590,275	60,265,132
Unvested Participating Shares [Member]
Diluted earnings per share:
Allocation of net income (loss) to common stock	85,000	0	145,000	0
Adjusted earnings	$ (83,000)	$ 0	$ (141,000)	$ 0
Weighted average number of common shares:
Common stock-basic (shares)	259,525	0	252,316	0
Stock Options [Member]
Weighted average number of common shares:
Dilutive effect (shares)	1,684,182	1,902,754	1,742,855	0

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Goodwill and Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Goodwill [Line Items]
Goodwill, Acquired During Period	$ 5,378
Goodwill [Roll Forward]
Beginning balance	1,096,283
Adjustments to prior year acquisitions	(488)
Effect of foreign currency translation	3,233
Ending balance	1,104,406
Full Service Center-based Care [Member]
Goodwill [Line Items]
Goodwill, Acquired During Period	5,378
Goodwill [Roll Forward]
Beginning balance	912,134
Adjustments to prior year acquisitions	(315)
Effect of foreign currency translation	2,748
Ending balance	919,945
Back-up Dependent Care [Member]
Goodwill [Line Items]
Goodwill, Acquired During Period	0
Goodwill [Roll Forward]
Beginning balance	160,145
Adjustments to prior year acquisitions	0
Effect of foreign currency translation	485
Ending balance	160,630
Other Educational Advisory Services [Member]
Goodwill [Line Items]
Goodwill, Acquired During Period	0
Goodwill [Roll Forward]
Beginning balance	24,004
Adjustments to prior year acquisitions	(173)
Effect of foreign currency translation	0
Ending balance	$ 23,831

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Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Organization and Basis of Presentation

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization—Bright Horizons Family Solutions Inc. (“Bright Horizons” or the “Company”) provides workplace services for employers and families throughout the United States and the United Kingdom, and also in Puerto Rico, Canada, Ireland, the Netherlands, and India. Workplace services include center-based child care, education and enrichment programs, elementary school education, back-up dependent care (for children and elders), before and after school care, college preparation and admissions counseling, tuition reimbursement program management, and other family support services.

The Company provides its center-based child care services under two general business models: a profit and loss ("P&L) model, where the Company assumes the financial risk of operating a child care center; and a cost-plus model, where the Company is paid a fee by an employer client for managing a child care center on a cost-plus basis. The P&L model is further classified into two subcategories: (i) a sponsor model, where Bright Horizons provides child care and early educational services on either an exclusive or priority enrollment basis for employees of a specific employer sponsor; and (ii) a lease/consortium model, where the Company provides child care and early education services to the employees of multiple employers located within a specific real estate development (for example, an office building or office park), as well as to families in the surrounding community. In both our cost-plus and sponsor P&L models, the development of a new child care center, as well as ongoing maintenance and repair, is typically funded by an employer sponsor with whom the Company enters into a multi-year contractual relationship. In addition, employer sponsors typically provide subsidies for the ongoing provision of child care services for their employees. Under each model type, the Company retains responsibility for all aspects of operating the child care and early education center, including the hiring and paying of employees, contracting with vendors, purchasing supplies, and collecting tuition and related accounts receivable.

The Company also provides back-up dependent care services through our own centers and through our Back-Up Care Advantage ("BUCA") program, which offers access to a contracted network of in-home care agencies and center-based providers in locations where we do not otherwise have centers with available capacity.

Basis of Presentation—Bright Horizons is majority-owned by investment funds affiliated with Bain Capital Partners, LLC as a result of a transaction in 2008 (the "Merger"), pursuant to which a wholly owned merger subsidiary was merged with and into Bright Horizons Family Solutions, Inc. (the "Predecessor"). As part of the transaction, a new basis of accounting was established and the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values.

The accompanying unaudited condensed consolidated balance sheet as of June 30, 2014 and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the interim periods ended June 30, 2014 and 2013 have been prepared by the Company, in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required for complete financial statements by generally accepted accounting principles 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, 2013.

In the opinion of the Company’s management, the Company’s unaudited consolidated balance sheet as of June 30, 2014 and the results of its consolidated operations and consolidated cash flows for the interim periods ended June 30, 2014 and 2013, 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.

Reclassifications—The Company has revised the presentation of certain captions for prior periods within the condensed consolidated statements of cash flows to conform to the current period presentation. The Company has separately classified the amortization of original issue discount and deferred financing costs which were previously combined with depreciation and amortization expense. The revision had no impact to net cash provided (used by) operating, investing, or financing activities.

Public Offering—On January 30, 2013, the Company completed an initial public offering (“the Offering”) and, after the exercise of the overallotment option on February 21, 2013, issued a total of 11.6 million shares of common stock in exchange for $233.3 million, net of offering costs including $1.6 million expensed in 2012. The Company used the proceeds of the Offering, as well as certain amounts from the 2013 refinancing discussed below, to repay the principal and accumulated interest under its senior notes outstanding on January 30, 2013.

On January 11, 2013, the Company converted each share of its Class L common stock into 35.1955 shares of Class A common stock, and, immediately following the conversion of its Class L common stock, reclassified the Class A common stock into common stock, for which 475 million shares were authorized. The Company also authorized 25 million shares of undesignated preferred stock for issuance.

On June 19, 2013 and March 25, 2014, certain of the Company’s shareholders completed the sale of 9.8 million and 7.9 million shares, respectively, of the Company’s stock in secondary offerings (“the Secondaries”). The Company did not receive proceeds from the sale of shares in the Secondaries. The Company incurred $0.6 million during the year ended December 31, 2013 in relation to the 2013 secondary offering, as well as $0.6 million during the six months ended June 30, 2014 in relation to the 2014 secondary offering, which are included in selling, general and administrative expenses.

New Accounting Pronouncements—In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today's guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration included in the transaction price and allocating the transaction price to each separate performance obligation. The guidance is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods. Early adoption is not permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, authorized	25,000,000	25,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized	475,000,000	475,000,000
Common stock, issued	65,580,844	65,302,814
Common stock, outstanding	65,580,844	65,302,814

XML

Organization and Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation—Bright Horizons is majority-owned by investment funds affiliated with Bain Capital Partners, LLC as a result of a transaction in 2008 (the "Merger"), pursuant to which a wholly owned merger subsidiary was merged with and into Bright Horizons Family Solutions, Inc. (the "Predecessor"). As part of the transaction, a new basis of accounting was established and the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values.

The accompanying unaudited condensed consolidated balance sheet as of June 30, 2014 and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the interim periods ended June 30, 2014 and 2013 have been prepared by the Company, in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required for complete financial statements by generally accepted accounting principles 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, 2013.

In the opinion of the Company’s management, the Company’s unaudited consolidated balance sheet as of June 30, 2014 and the results of its consolidated operations and consolidated cash flows for the interim periods ended June 30, 2014 and 2013, 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.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 28, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	BRIGHT HORIZONS FAMILY SOLUTIONS INC.
Entity Central Index Key	0001437578
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		66,020,905

XML

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2014 are as follows (in thousands):

	Full service center-based care			Back-up dependent care		Other educational advisory services			Total
Beginning balance at December 31, 2013	$	912,134		$	160,145	$	24,004		$	1,096,283
Additions from acquisitions	5,378			—		—			5,378
Adjustments to prior year acquisitions	(315		)	—		(173		)	(488		)
Effect of foreign currency translation	2,748			485		—			3,233
Balance at June 30, 2014	$	919,945		$	160,630	$	23,831		$	1,104,406

Intangible Assets Subject to Amortization

The Company also has intangible assets, which consist of the following at June 30, 2014 and December 31, 2013 (in thousands):

	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
June 30, 2014
Definite-lived intangibles:
Customer relationships	14.5 years	$	402,117	$	(168,750	)	$	233,367
Trade names	8.1 years	6,292		(2,032		)	4,260
Non-compete agreements	5 years	56		(42		)	14
		408,465		(170,824		)	237,641
Indefinite-lived intangibles:
Trade names	N/A	184,236		—			184,236
		$	592,701	$	(170,824	)	$	421,877

	Weighted average amortization period	Cost		Accumulated amortization			Net carrying amount
December 31, 2013
Definite-lived intangibles:
Customer relationships	14.5 years	$	400,481	$	(153,939	)	$	246,542
Trade names	8.1 years	6,072		(1,542		)	4,530
Non-compete agreements	5 years	54		(39		)	15
		406,607		(155,520		)	251,087
Indefinite-lived intangibles:
Trade names	N/A	183,973		—			183,973
		$	590,580	$	(155,520	)	$	435,060

Estimated Amortization Expense Related to Intangible Assets

The Company estimates that it will record amortization expense related to intangible assets existing as of June 30, 2014 as follows over the next five years (in thousands):

	Estimated amortization expense
Remainder of 2014	$	14,103
2015	$	26,733
2016	$	25,465
2017	$	24,640
2018	$	23,676

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Income Statement [Abstract]
Revenue	$ 348,100	$ 310,813		$ 680,255		$ 590,936
Cost of services	264,986	235,388		519,992		449,721
Gross profit	83,114	75,425		160,263		141,215
Selling, general and administrative expenses	33,204	32,426		68,608		76,031
Amortization of intangible assets	7,375	7,602		15,109		14,350
Income from operations	42,535	35,397	[1]	76,546	[2]	50,834	[3]
Loss on extinguishment of debt	0	0		0		(63,682)
Interest income	11	39		26		60
Interest expense	(8,625)	(8,963)		(17,367)		(22,252)
Income (loss) before income taxes	33,921	26,473		59,205		(35,040)
Income tax (expense) benefit	(12,207)	(1,966)		(21,443)		8,766
Net income (loss)	21,714	24,507		37,762		(26,274)
Net loss attributable to non-controlling interest	0	(72)		0		(110)
Net income (loss) attributable to Bright Horizons Family Solutions Inc.	$ 21,714	$ 24,579		$ 37,762		$ (26,164)
Earnings (loss) per common share:
Common stock-basic (usd per share)	$ 0.33	$ 0.38		$ 0.57		$ (0.43)
Common stock-diluted (usd per share)	$ 0.32	$ 0.37		$ 0.56		$ (0.43)
Weighted average number of common shares outstanding:
Common stock-basic (shares)	65,772,698	64,732,730		65,590,275		60,265,132
Common stock-diluted (shares)	67,456,880	66,635,484		67,333,130		60,265,132

[1] (1) For the three months ended June 30, 2013, income from operations includes secondary offering expenses and acquisition related costs of of $0.9 million which has been allocated to full service center-based care.

[2] For the six months ended June 30, 2014, income from operations includes secondary offering expenses of $0.6 million which has been allocated to full service center-based care.

[3] For the six months ended June 30, 2013, income from operations includes expenses incurred in connection with the Offering, including a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC, and $5.0 million for certain stock options that vested upon completion of the Offering, and acquisition related costs allocated on a proportionate basis to each segment ($12.2 million to full service center-based care, $1.9 million to back-up dependent care, and $0.8 million to other educational services).

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Stockholders' Equity and Stock-Based Compensation

6 Months Ended

Jun. 30, 2014

Equity [Abstract]

Stockholders' Equity and Stock-Based Compensation

6. STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION

Treasury Stock

On March 28, 2014, the Board of Directors of the Company authorized the potential repurchase of up to $225.0 million of its common stock. During the three months ended June 30, 2014, 78,447 shares were repurchased for $3.1 million under this program. All repurchased shares have been retired.

Equity Incentive Plan

The Company has the 2012 Omnibus Long-Term Incentive Plan (the "Plan"), which became effective on January 24, 2013, and allows for the issuance of equity awards of up to 5 million shares of common stock. As of June 30, 2014, there were approximately 3.5 million shares of common stock available for grant.

During the six months ended June 30, 2014, the Company granted options to purchase 859,627 shares of common stock at a weighted average price of $36.56 per share that have ratable or cliff vesting over one to five years. The weighted average fair value of options granted during the six months ended June 30, 2014 was $11.19 per share. The fair value of each option to purchase common stock was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions: expected dividend yield of 0%; expected volatility of 30.0%; risk free interest rate of 1.82%; and expected life of options of 5.3 years.

Restricted stock awards are also granted at the discretion of the Board of Directors as allowed under the Plan. During the six months ended June 30, 2014, 259,525 shares of restricted stock were granted to certain senior managers and key employees, which vest at the end of three years and are accounted for as nonvested stock. The restricted stock was sold for a price equal to 50% of the fair value of the stock at the date of grant. Proceeds from the issuance of restricted stock are recorded as other liabilities in the consolidated balance sheet until the earlier of vesting or forfeiture of the awards. Stock-based compensation expense for restricted stock awards is calculated based on the fair value of the award on the date of grant, which will be recognized on a straight line basis over the requisite service period. At June 30, 2014, there were 259,525 unvested shares of restricted stock outstanding, which were legally issued at the date of grant but are not considered common stock issued and outstanding in accordance with accounting guidance until the requisite service period is fulfilled.

During the six months ended June 30, 2014, restricted stock units were awarded to members of the Board of Directors as allowed under the Plan. The awards allow for the issuance of a share of the Company's common stock for each vested unit upon the earliest of termination of service as a member of the Board of Directors or five years after the date of the award. The Company issued 6,066 units at a weighted average fair value of $39.58 for a total value of $0.2 million. The units vested upon issuance.

The Company recorded stock-based compensation expense of $4.4 million in selling, general and administrative expenses during the six months ended June 30, 2014.

At June 30, 2014, there was $17.1 million of total unrecognized compensation expense related to unvested share-based compensation arrangements granted under the plans, which is expected to be recognized over the remaining requisite service periods of approximately three years.

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

5. EARNINGS (LOSS) PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted-average common shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average common shares and potentially dilutive securities outstanding during the period.

Earnings per share is calculated using the two-class method, which requires the allocation of earnings to each class of common stock outstanding and to unvested share-based payment awards that participate in dividends with common stock, also referred to herein as unvested participating shares.

The Company’s unvested share-based payment awards include unvested shares awarded as restricted stock awards at the discretion of the Company’s Board of Directors. The restricted stock awards vest at the end of three years. The unvested shares participate equally in dividends. See Note 6 for a discussion of the current year unvested stock awards and issuances.

Earnings per Share - Basic

The following table sets forth the computation of earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):

	Three months ended   June 30,				Six months ended   June 30,
	2014		2013		2014		2013
Basic earnings per share:
Net income (loss) attributable to Bright Horizons Family Solutions Inc.	$	21,714	$	24,579	$	37,762	$	(26,164	)
Allocation of net income (loss) to common stockholders:
Common stock	$	21,629	$	24,579	$	37,617	$	(26,164	)
Unvested participating shares	85		—		145		—
	$	21,714	$	24,579	$	37,762	$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698		64,732,730		65,590,275		60,265,132
Unvested participating shares	259,525		—		252,316		—
Earnings (loss) per share:
Common stock	$	0.33	$	0.38	$	0.57	$	(0.43	)

Earnings per Share - Diluted

The Company calculates diluted earnings per share for common stock using the more dilutive of (1) the treasury stock method, or (2) the two-class method. The following table sets forth the computation of diluted earnings per share using the two-class method for unvested participating shares (in thousands, except share and per share amounts):

	Three months ended   June 30,					Six months ended   June 30,
	2014			2013		2014			2013
Diluted earnings per share:
Earnings allocated to common stock	$	21,629		$	24,579	$	37,617		$	(26,164	)
Plus earnings allocated to unvested participating shares	85			—		145			—
Less adjusted earnings allocated to unvested participating shares	(83		)	—		(141		)	—
Earnings allocated to common stock	$	21,631		$	24,579	$	37,621		$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698			64,732,730		65,590,275			60,265,132
Effect of dilutive securities	1,684,182			1,902,754		1,742,855			—
	67,456,880			66,635,484		67,333,130			60,265,132
Earnings (loss) per share:
Common stock	$	0.32		$	0.37	$	0.56		$	(0.43	)

Options outstanding to purchase 0.9 million shares of common stock were excluded from diluted earnings per share for the three and six months ended June 30, 2014. Options outstanding to purchase 0.4 million shares and 5.0 million shares of common stock were excluded from diluted earnings per share for the three and six months ended June 30, 2013, respectively, since their effect was anti-dilutive, which may be dilutive in the future.

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Organization and Significant Accounting Policies - Additional Information (Detail) (USD $)	1 Months Ended	6 Months Ended				0 Months Ended	1 Months Ended	6 Months Ended	12 Months Ended
	Jan. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jan. 11, 2013	Mar. 25, 2014 Secondary Offering [Member]	Jun. 19, 2013 Secondary Offering [Member]	Jun. 30, 2014 Secondary Offering [Member]	Dec. 31, 2013 Secondary Offering [Member]
Accounting Policies [Line Items]
Number of shares issued	11,600,000					7,900,000.0	9,800,000
Proceed from issuance of initial public offering	$ 233,300,000	$ 0	$ 234,944,000
Payment of initial public offering costs	1,600,000
Common stock conversion ratio, Class L common stock into Class A common stock					35.1955
Common stock, authorized		475,000,000		475,000,000	475,000,000
Preferred stock, authorized		25,000,000		25,000,000	25,000,000
Proceeds from issuance of secondary offering							0
Offering cost incurred								$ 600,000	$ 600,000

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2014

Allocation of Purchased Assets and Liabilities

The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported September 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Accounts receivable	$	981		$	(126	)	$	855
Prepaid expenses and other assets	334			411			745
Fixed assets	5,637			535			6,172
Intangible assets	12,800			(1,190		)	11,610
Goodwill	38,818			(2,303		)	36,515
Total assets acquired	58,570			(2,673		)	55,897
Accounts payable and accrued expenses	(3,441		)	(801		)	(4,242		)
Deferred revenue and parent deposits	(885		)	18			(867		)
Total liabilities assumed	(4,326		)	(783		)	(5,109		)
Purchase price	$	54,244		$	(3,456	)	$	50,788

Kidsunlimited Group Limited [Member]

Allocation of Purchase Price

The purchase price for this acquisition, which was finalized in the first quarter of 2014, has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows (in thousands):

	At acquisition date as reported June 30, 2013			Measurement period adjustments			At acquisition date as reported June 30, 2014
Cash	$	4,888		$	—		$	4,888
Accounts receivable	1,809			—			1,809
Prepaid expenses and other assets	2,509			—			2,509
Fixed assets	13,901			(192		)	13,709
Favorable leases	—			2,892			2,892
Intangible assets	17,442			765			18,207
Goodwill	55,349			(2,372		)	52,977
Total assets acquired	95,898			1,093			96,991
Accounts payable and accrued expenses	(9,450		)	3,798			(5,652		)
Unfavorable leasehold interests	(1,759		)	(5,325		)	(7,084		)
Deferred revenue	(12,853		)	8,378			(4,475		)
Other current liabilities	—			(8,378		)	(8,378		)
Deferred taxes	(2,735		)	245			(2,490		)
Total liabilities assumed	(26,797		)	(1,282		)	(28,079		)
Purchase price	$	69,101		$	(189	)	$	68,912

Summary of Operating Results

The operating results for each of the acquisitions are included in the consolidated results of operations from the respective dates of acquisition. The following table presents consolidated pro forma information as if the acquisitions of Children’s Choice Learning Centers, Inc. and Kidsunlimited had occurred on January 1, 2012 (in thousands):

	Pro forma (Unaudited)
	Six Months Ended   June 30, 2013
Revenue	$	633,196
Net loss attributable to Bright Horizons Family Solutions Inc.	$	(24,715	)

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

9. SEGMENT INFORMATION

Bright Horizons' work/life services are primarily comprised of full service center-based child care, back-up dependent care, and other educational advisory services. Full service center-based care includes the traditional center-based child care, preschool, and elementary education, which have similar operating characteristics and meet the criteria for aggregation. Full service center-based care derives its revenues primarily from contractual arrangements with corporate clients and from tuition. The Company’s back-up dependent care services consist of center-based back-up child care, in-home care, mildly ill care, and adult/elder care. The Company’s other educational advisory services consists of the remaining services, including college preparation and admissions counseling and tuition assistance, counseling and management services, which do not meet the quantitative thresholds for separate disclosure and are not material for segment reporting individually or in the aggregate. The Company and its chief operating decision makers evaluate performance based on revenues and income from operations.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements; thus, no additional information is produced or included herein.

	Full service center-based care		Back-up dependent care		Other educational advisory services		Total
	(In thousands)
Three months ended June 30, 2014
Revenue	$	300,724	$	39,740	$	7,636	$	348,100
Amortization of intangible assets	7,050		181		144		7,375
Income from operations	29,497		12,181		857		42,535
Three months ended June 30, 2013
Revenue	$	269,910	$	35,717	$	5,186	$	310,813
Amortization of intangible assets	7,346		181		75		7,602
Income (loss) from operations (1)	24,062		10,927		408		35,397

(1) For the three months ended June 30, 2013, income from operations includes secondary offering expenses and acquisition related costs of of $0.9 million which has been allocated to full service center-based care.

	Full service center-based care		Back-up dependent care		Other educational advisory services			Total
	(In thousands)
Six months ended June 30, 2014
Revenue	$	587,748	$	77,196	$	15,311		$	680,255
Amortization of intangibles	14,456		362		291			15,109
Income from operations (1)	51,508		23,873		1,165			76,546
Six months ended June 30, 2013
Revenue	$	512,160	$	68,878	$	9,898		$	590,936
Amortization of intangibles	13,837		362		151			14,350
Income (loss) from operations (2)	32,934		18,394		(494		)	50,834

(1) For the six months ended June 30, 2014, income from operations includes secondary offering expenses of $0.6 million which has been allocated to full service center-based care.

(2) For the six months ended June 30, 2013, income from operations includes expenses incurred in connection with the Offering, including a $7.5 million fee for the termination of the management agreement with Bain Capital Partners LLC, and $5.0 million for certain stock options that vested upon completion of the Offering, and acquisition related costs allocated on a proportionate basis to each segment ($12.2 million to full service center-based care, $1.9 million to back-up dependent care, and $0.8 million to other educational services).

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

7. INCOME TAXES

The Company's effective income tax rates were 36.0% and 7.4% for the three months ended June 30, 2014 and 2013, respectively. For the six months ended June 30, 2014 and 2013, the Company's effective income tax rates were 36.2% and 25.0%, respectively. The effective income tax rate is based upon estimated income before income taxes for the year, the geographical composition of the income and estimated permanent tax adjustments. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including discrete items such as settlement of foreign, Federal and State tax issues.

The Company’s unrecognized tax benefits were $2.0 million at June 30, 2014 and December 31, 2013. Interest and penalties related to unrecognized tax benefits were $1.7 million at June 30, 2014 and $1.6 million at December 31, 2013.

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 statutes of limitations lapse. The impact of the amount of such changes to previously recorded uncertain tax positions could range from zero to $1.0 million, exclusive of interest and penalties.

The Company and its domestic subsidiaries are subject to U.S. Federal income tax as well as 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 income tax returns is three years. The Company's filings for 2010 through 2013 are subject to audit based upon the Federal statute of limitations and there is an ongoing audit of the 2011 tax year.

State income tax returns are generally subject to examination for a period of three to five 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. There were no significant settlements of state audits during the second quarter of 2014. As of June 30, 2014, there were four income tax audits in process and the tax years from 2010 to 2013 are subject to audit.

The Company is also subject to corporate income tax at its subsidiaries located in the United Kingdom, the Netherlands, India, Canada, 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 seven years.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date and applies the following fair value 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 (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company uses observable inputs where relevant and whenever possible.

Level 1—Quoted prices are available in active markets for identical investments as of the reporting date.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. The fair value of the Company’s financial instruments approximates their carrying value. As of June 30, 2014, the Company’s long-term debt had a book value of $778.2 million and a fair value of $779.1 million using a model that considers observable inputs (level 2 inputs).

Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents and accounts receivable. The Company mitigates its exposure by maintaining its cash and cash equivalents in financial institutions of high credit standing. The Company’s accounts receivable, which are derived primarily from the services it provides, are 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. The Company believes that no significant credit risk exists at June 30, 2014.

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Transactions with Related Parties

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Transactions with Related Parties

10. TRANSACTIONS WITH RELATED PARTIES

The Company had a management agreement with Bain Capital Partners LLC (the “Sponsor”), which provided for annual payments of $2.5 million through May 2018. In connection with the Offering, the Company and the Sponsor terminated the management agreement in exchange for a $7.5 million payment from the Company to the Sponsor, which is included in selling, general and administrative expenses in the accompanying statement of operations for the six months ended June 30, 2013. As of June 30, 2014, investment funds affiliated with the Sponsor hold approximately 51.6% of our common stock.

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Earnings (Loss) Per Share - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Common Stock Class A [Member]
Earnings Per Share [Line Items]
Options to Purchase Common Stock Shares Outstanding excluded from diluted earnings per share	900,000	400,000	900,000	5,000,000
Restricted Stock [Member]
Earnings Per Share [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vesting Period			3 years

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Common Share

	Three months ended   June 30,				Six months ended   June 30,
	2014		2013		2014		2013
Basic earnings per share:
Net income (loss) attributable to Bright Horizons Family Solutions Inc.	$	21,714	$	24,579	$	37,762	$	(26,164	)
Allocation of net income (loss) to common stockholders:
Common stock	$	21,629	$	24,579	$	37,617	$	(26,164	)
Unvested participating shares	85		—		145		—
	$	21,714	$	24,579	$	37,762	$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698		64,732,730		65,590,275		60,265,132
Unvested participating shares	259,525		—		252,316		—
Earnings (loss) per share:
Common stock	$	0.33	$	0.38	$	0.57	$	(0.43	)

	Three months ended   June 30,					Six months ended   June 30,
	2014			2013		2014			2013
Diluted earnings per share:
Earnings allocated to common stock	$	21,629		$	24,579	$	37,617		$	(26,164	)
Plus earnings allocated to unvested participating shares	85			—		145			—
Less adjusted earnings allocated to unvested participating shares	(83		)	—		(141		)	—
Earnings allocated to common stock	$	21,631		$	24,579	$	37,621		$	(26,164	)
Weighted average number of common shares:
Common stock	65,772,698			64,732,730		65,590,275			60,265,132
Effect of dilutive securities	1,684,182			1,902,754		1,742,855			—
	67,456,880			66,635,484		67,333,130			60,265,132
Earnings (loss) per share:
Common stock	$	0.32		$	0.37	$	0.56		$	(0.43	)

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Goodwill and Intangible Assets - Estimated Amortization Expense Related to Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2014	$ 14,103
2015	26,733
2016	25,465
2017	24,640
2018	$ 23,676

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Segment Information - Income from Operations by Segment (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Stock options vested upon completion of Offering			$ 5.0
Sponsor [Member]
Segment Reporting Information [Line Items]
Agreement termination fee			7.5
Full Service Center-based Care [Member]
Segment Reporting Information [Line Items]
Acquisition related costs	0.9	0.6
Expenses incurred in connection with the modification of stock options			12.2
Back-up Dependent Care [Member]
Segment Reporting Information [Line Items]
Expenses incurred in connection with the modification of stock options			1.9
Other Educational Advisory Services [Member]
Segment Reporting Information [Line Items]
Expenses incurred in connection with the modification of stock options			$ 0.8

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Condensed Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 21,714	$ 24,507	$ 37,762	$ (26,274)
Foreign currency translation adjustments	5,489	104	7,014	(11,964)
Total other comprehensive income (loss)	5,489	104	7,014	(11,964)
Comprehensive income (loss)	27,203	24,611	44,776	(38,238)
Less: Comprehensive income (loss) attributable to non-controlling interest	0	51	0	(232)
Comprehensive income (loss) attributable to Bright Horizons Family Solutions Inc.	$ 27,203	$ 24,560	$ 44,776	$ (38,006)

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Borrowing Arrangements

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Borrowing Arrangements

4. BORROWING ARRANGEMENTS

Outstanding borrowings were as follows at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Term loans	$	778,150		$	782,100
Deferred financing costs and original issue discount	(16,371		)	(17,877		)
Total debt	761,779			764,223
Less current maturities	7,900			7,900
Long-term debt	$	753,879		$	756,323

The effective interest rate for the term loans was 3.75% at June 30, 2014 and the weighted average interest rate was 3.91% for the six months ended June 30, 2014. There were no borrowings outstanding on the $100.0 million revolving credit facility at June 30, 2014 or during the six months then ended, and the full facility was available for borrowings. The weighted average interest rate for the revolving credit facility was 5.0% for the six months ended June 30, 2014.

The Company incurred financing fees of $12.7 million and original issue discount costs of $7.9 million in connection with the issuance of the term loans and establishment of the revolving credit facility in January 2013. These fees are being amortized over the terms of the related debt instruments. Amortization expense of deferred financing costs and original issue discount costs in the six months ended June 30, 2014 were $0.9 million and $0.6 million, respectively, which are included in interest expense.

The future principal payments under the new term loans at June 30, 2014 are as follows (in thousands):

Remainder of 2014	$	3,950
2015	7,900
2016	7,900
2017	7,900
2018	7,900
Thereafter	742,600
	$	778,150

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Acquisitions - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended			6 Months Ended			1 Months Ended	6 Months Ended		1 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Series of Individually Immaterial Business Acquisitions [Member] Center	Jun. 30, 2014 Children's Choice Learning Centers [Member]	Sep. 30, 2013 Children's Choice Learning Centers [Member]	Jul. 22, 2013 Children's Choice Learning Centers [Member] United States Center	Jun. 30, 2014 Kidsunlimited Group Limited [Member]	Jun. 30, 2013 Kidsunlimited Group Limited [Member]	Apr. 10, 2013 Kidsunlimited Group Limited [Member] United Kingdom Nursery	Jun. 30, 2014 Huntyard Limited [Member]
Business Acquisition [Line Items]
Number of centers acquired						3			49			64
Cash consideration						$ 6,500,000			$ 50,800,000			$ 68,900,000
Goodwill	1,104,406,000		1,104,406,000		1,096,283,000	5,400,000	36,515,000	38,818,000		52,977,000	55,349,000
Amortization of Intangible assets	7,375,000	7,602,000	15,109,000	14,350,000			11,300,000			15,900,000
Amortization period of Intangible assets							11 years			8 years
Percentage of share purchase agreement												100.00%
Deferred tax liability										4,000,000
Intangible assets including customer relationship						1,200,000	11,610,000	12,800,000		18,207,000	17,442,000
Fixed assets acquired						300,000	6,172,000	5,637,000		13,709,000	13,901,000
Working capital deficit acquired						400,000
Contribution of revenues by acquired business	$ 348,100,000	$ 310,813,000	$ 680,255,000	$ 590,936,000									$ 62,200,000

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Income Tax Disclosure [Line Items]
Effective income tax rates	36.00%	7.40%	36.20%	25.00%
Unrecognized income tax benefit	$ 2,000,000		$ 2,000,000		$ 2,000,000
Interest and penalties accrued for income tax	1,700,000		1,700,000		1,600,000
Minimum [Member]
Income Tax Disclosure [Line Items]
Change in uncertain tax positions	0		0
Maximum [Member]
Income Tax Disclosure [Line Items]
Change in uncertain tax positions	1,000,000		1,000,000
Federal [Member]
Income Tax Disclosure [Line Items]
Statute of limitations			3 years
State [Member]
Income Tax Disclosure [Line Items]
Significant settlements of state audits	$ 0
Number of income tax audits in process			4
State [Member] | Minimum [Member]
Income Tax Disclosure [Line Items]
Statute of limitations			3 years
State [Member] | Maximum [Member]
Income Tax Disclosure [Line Items]
Statute of limitations			5 years
Foreign [Member] | Minimum [Member]
Income Tax Disclosure [Line Items]
Statute of limitations			1 year
Foreign [Member] | Maximum [Member]
Income Tax Disclosure [Line Items]
Statute of limitations			7 years

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Borrowing Arrangements (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Outstanding Borrowings

Outstanding borrowings were as follows at June 30, 2014 and December 31, 2013 (in thousands):

	June 30, 2014			December 31, 2013
Term loans	$	778,150		$	782,100
Deferred financing costs and original issue discount	(16,371		)	(17,877		)
Total debt	761,779			764,223
Less current maturities	7,900			7,900
Long-term debt	$	753,879		$	756,323

Future Principal Payments Under New Term Loan

The future principal payments under the new term loans at June 30, 2014 are as follows (in thousands):

Remainder of 2014	$	3,950
2015	7,900
2016	7,900
2017	7,900
2018	7,900
Thereafter	742,600
	$	778,150