Executives: David H. Lissy - Bright Horizons Family Solutions, Inc. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc. Analysts: Andrew Charles Steinerman - JPMorgan Securities LLC Manav Patnaik - Barclays Capital, Inc.

Trace Adair Urdan - Credit Suisse Securities (USA) LLC (Broker) Gary Bisbee - RBC Capital Markets LLC Henry Sou Chien - BMO Capital Markets (United States) David J. Chu - Bank of America Merrill Lynch Jeff P. Meuler - Robert W. Baird & Co., Inc. (Broker)

Operator: Greetings, and welcome to the Bright Horizons Family Solutions Third Quarter 2016 Earnings Release Conference Call.

At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Lissy, Chief Executive Officer for Bright Horizons Family Solutions. Thank you, David.

You may begin. David H. Lissy - Bright Horizons Family Solutions, Inc.: Thanks, Bob, and greetings from Boston. And hello to everybody on the call today. Joining me, as usual, is Elizabeth Boland, our Chief Financial Officer and I'll let her walk through some administrative matters before I kick off the call.

Elizabeth?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Hi, everybody. Thanks for joining us today. This call is also being webcast, and a recording of it and our earnings release, issued after the market closed today, are or will be available under the Investor Relations section of our website at brighthorizons.com. Some of the information we're providing today represents forward-looking statements, including those regarding our expectations for future performance, our business outlook, enrollment trends, our financial outlook for the remainder of 2016 and preliminary views for 2017, revenue growth, operating margins, new client launches, growth, acquisition and operating strategies, timing and impact of specific acquisition, our credit facility, business segments, foreign currency rates, tax rates, center openings and closings, capital spending, adjusted EBITDA, net income and EPS, as well as cash flow and share repurchases.

Forward-looking statements inherently involve risks and uncertainties that may cause actual operating and financial results to differ materially. Factors that could cause actual results to differ include risks related to implementing our growth strategies, client demand, integrating acquisitions, currency fluctuations and our indebtedness, as well as other risks and uncertainties that are described in the Risk Factors in our Form 10-K that we filed for the year-ended 2015 and in our other SEC filings. Any forward-looking statement speaks only as of the date on which it's made, and we undertake no obligation to update any forward-looking statements. The non-GAAP measures that we discuss are detailed and reconciled to their GAAP counterparts in our press release, and they will be included in our Form 10-Q, when filed with the SEC, and it be available in the Investor Relations section of our website. So, now back to Dave for the review and update on the business.

David H. Lissy - Bright Horizons Family Solutions, Inc.: Thanks, Elizabeth. And hello, again, everybody on the call. As usual, I am going to update you on our financial and operating results for this past quarter, as well as our outlook for the rest of 2016 and also provide you with our initial views on 2017. Elizabeth will then follow with the more detailed review of the numbers before we open it up for your questions.

So to recap the headline numbers for the past quarter, revenue increased 5% to $384 million, which yielded adjusted EBITDA of $70 million and adjusted earnings per share of $0.49, consistent with our previous outlook range and up 14% from last year. As we previewed in our last call, we experienced a more significant FX headwind related to our UK operations in the third quarter. This headwind approximated 3%, such that on a common currency basis, revenue growth approximated 8% in Q3 and the growth in adjusted EBITDA and earnings per share would have also been proportionately higher. Our top-line grew $18 million this past quarter, with solid contributions coming from each of our three lines of business. We added 15 full-service centers that highlights – that included additions of Wolverine Worldwide here in Massachusetts, the Philadelphia Health and Management Corporation, and Oxford University, along with five new lease/consortium model centers.

In our back-up and ed advisory businesses, highlights of new client launches included Dignity Health, Southwest Airlines, and the University of Notre Dame. Our gross margin expanded 50 basis points this past quarter, and the margin performance reflects the combination of factors we've talked about on previous calls, including incremental enrollment in our mature and ramping P&L centers and price increases that average 3% to 4% across the system. Overall, our full-service segment operating margins expanded 90 basis points in the quarter and are up 60 basis points through September, with solid growth and contributions coming from each of our U.S., UK, and Netherland operations. In addition to new client centers, we've also opened a total of 10 new lease/consortium model centers thus far in 2016, including five this past quarter. All in, we've opened a total of 55 of these centers since the beginning of 2013 and continue to be on track to create significant value in this area.

Now that the centers that are opened in 2013 and 2014 are further along their operating maturity curve, their contributions are beginning to offset the losses we incurred in the newer classes of centers that are still in the early stages of their ramp-up. We are experiencing some margin headwind from the early-stage operating losses in the most recently opened centers, which has put some pressure on our current results and will do so for the rest of this year. That said, we expect this headwind will naturally diminish as these centers continue to ramp, thereby producing some uplift in full-service margins next year. Our back-up and educational advising segments also continued to expand the respective client bases and breadth of services. We are now serving 750 clients in back-up and 275 clients in our advisory services.

We expect to launch a number of new clients over the next few months, and as such, I continue to be bullish about the future performance of these two segments. Back-up care grew 11% this past quarter, and continues to trend up over the first half of the year. On the margin side, we continue to deliver strong results while we absorb the incremental depreciation associated with the investment and rollout in 2016 of our new operating system, which we previewed at the beginning of the year and had factored into our plan. Our advising business grew 13% on the top-line, and remains poised to continue to deliver on the growth plan we've discussed with you on prior calls. I'm pleased with the momentum on the sales side as the overall selling environment continues to be strong.

This is reflected in the quality of our early-stage prospect base and the pipeline of centers under development. We're seeing good progress on the new business front across industries and continue to see most of our activity in the technology, biotech, healthcare, and higher education areas. On the acquisition front, our strategy continues to be to pursue opportunities that range in scale and geography. Our pipeline remains strong and includes some larger potential strategic opportunities as well as a good mix of smaller networks and single centers. Through September, we acquired a total of eight full-service centers this year, plus College Nannies and Tutors, and are working to complete additional tuck-in deals in 2016 that we expect will put us in line with the plan in terms of numbers of centers that we hoped to acquire at the beginning of this year.

Just yesterday, we closed on a four center acquisition in the Greater New York area and it's an example of another solid addition to our portfolio and brings us close to our annual target for center acquisitions, albeit later in the year than we had planned when we spoke to you the last time. Let me move over to our capital allocation and credit strategy. We're currently in the process of amending our credit agreement, attempting to take advantage of favorable credit markets to extend the term of our loan out seven years and lock in favorable rates and terms, and to create access to additional liquidity for strategic purposes as needed. We expect that this process will wrap up over the next week or so. And between the cash flow we generate in our business, our revolver and the flexible liquidity we anticipate securing through our amended agreement, we're now in a strong position to take advantage of the opportunities that may arise as we continue to execute on our growth strategy both here in the U.S.

and abroad. As we discussed on prior calls, our first priority remains growth oriented investments and acquisitions and new lease/consortium centers which you've seen us continue to do this quarter and this year, with the second priority being to enhance shareholder value through our share repurchase program, which we've also continued to execute throughout the year. So as we look ahead to the remainder of 2016, we now have more visibility into the timing of new center openings, client launches, and acquisitions, and we're updating our guidance for the year. When we incorporate the reality of additional currency fluctuation related to the UK pound, our estimation is that FX may create more than a 3% headwind on revenue growth in the fourth quarter. In addition, when we factor in the impact of timing related to the new lease/consortium model centers and our updated expectations for contributions from our most recently completed acquisitions, we now expect revenue growth to approximate 7% for the full year, which translates to approximately 9% on a common currency basis.

Factoring that all into our updated outlook for adjusted earnings per share, we anticipate 2016 earnings per share in the range of $2.14 to $2.16. Before I turn it over to Elizabeth, let me give you a brief outlook on our initial view for 2017. We believe we are well-positioned to continue the positive momentum that we have experienced over the last few years. While we are not yet providing detailed guidance for next year, based on how we are trending at this point, we're targeting revenue growth for 2017 to be in the range of 7% to 9%, inclusive of continued FX headwind from the pound, compared to the first three quarters of 2016. We expect to continue to drive strong earnings performance that translates to adjusted earnings per share growth next year in the range of 15% to 20%.

With that, Elizabeth can review the numbers with you in more detail, and I'll be back to talk with you during Q&A. Elizabeth?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Great. Thank you, Dave. So just getting into a bit more detail on the quarter results, the $11 million increase in full-service center business revenue was driven by rate increases, enrollment gains in our mature and ramping centers, and the contributions from the 39 centers that we've added since the end of the third quarter of 2015.

The FX impact in the quarter approximated 3% as lower pound to dollar FX rates in 2016 compared to 2015 dampened the revenue growth in full-service by over $9 million in the quarter. On a common currency basis, the full-service segment therefore grew 7% in Q3, approximately 5.5% organic and 1.5% from acquisitions. The back-up division expanded over $5 million on the top-line or 11%, and ed advisory services was up $1.5 million or 13% in the quarter. The growth rate can vary somewhat from quarter-to-quarter based on the timing of new client launches as well as service utilization levels and the comparable prior quarter's performance. In Q3, gross profit increased $6 million to $92 million, or 24% of revenue, and operating income increased $3.2 million to $45 million, or 11.7% of revenue.

Starting with our smaller segments, the back-up and ed advisory services both generated gross and operating margins that are well above what we earned in the full-service business. As a result, top-line growth in these segments contributes to margin expansion over time, even as both gross profit and operating income can vary from period-to-period depending on timing of new business launches as well as the personnel and technology investments that we make to support the growth and development of these businesses, both of which are earlier on the maturation curve than our full-service segment. For full-service, performance also remained strong in our mature and ramping classes of centers. As Dave mentioned, operating margin in full-service have expanded 60 basis points so far in 2016 driven by the enrollment growth in the mature and ramping centers, as well as consistent pricing discipline and strong cost management. The exit from underperforming centers also contributes to margin improvement.

The other factor in this is the class of lease/consortium centers that have recently opened, are still in the ramp-up stage of their growth and are therefore not yet contributing as fully matured centers. As we've discussed, while these centers create some near-term drag on margin growth during the ramp-up stage, it becomes significant contributors to margin over time as they generate higher than average gross profit dollars per site. Turning to our other costs in the results. Overhead in the quarter was $40 million, compared to $36 million in 2015, essentially on plan for the quarter and reflective of our ongoing investments in growth, operations, service delivery, as well as technology. Interest expense was $10.5 million in Q3 2016 and we ended the quarter with 3.2 times net debt to EBITDA compared to just under 3.5 times at December 31, 2015.

We generated operating cash flow of a $165 million year-to-date compared to $142 million in 2015 on improved operating performance and working capital. After deducting maintenance CapEx, our free cash flow available for investment in new growth totals $144 million through September 2016. Under our share purchase program, we have also acquired a total of 1.5 million shares for $96 million through September via both open market purchases as well as one block trade in May. At September 30, we operated 940 centers with capacity of 107,800. As Dave previewed our updated outlook for 2016 anticipates revenue growth approximating 7% over 2015, or 9% on a common currency basis.

The FX headwind of approximately 2% for the full year is based on current pound and euro exchange rate. As discussed on our last call, the effect has increased in the second half of 2016 with approximately a 3% impact in Q3 and 3.5% expected for Q4. We now also expect to add a total of around 40 new centers, including organic and acquired locations, and our current outlook also contemplates closing approximately 25 centers for the year. We expect to generate adjusted income from operations in 2016 of approximately 13% of revenue, primarily on gross margin expansion. Similar to the FX headwind we estimated for revenue growth, we project that the growth rate for income from ops is also about a 2% headwind.

For the full year, we estimate amortization of $29 million, depreciation of $55 million, stock comp of $12 million and interest expense of around $42 million, as the contributions from the slightly lower interest rates that we expect with our amended credit agreement will primarily be realized in 2017 and beyond. The structural tax rate for the full year is projected between 34% and 35% for the full year. On a cash flow front, we estimate that we will generate approximately $200 million of free cash flow with $230 million to $240 million of cash flow from ops and around $35 million of maintenance CapEx. We also expect to invest around $40 million in new center capital for centers opening this year and in early 2017. The combination of all these factors, including top-line growth, operating margin performance, the timing of center openings and ramp, and the translation impact of lower FX rates for our U.K.

operations lead to our updated projection that we will generate adjusted EBITDA in the range of $297 million to $300 million for 2016 and adjusted net income in the range of $130 million to $131 million. On a per share basis, we estimate that adjusted EPS will therefore approximate $2.14 to $2.16 for the full year 2016 on around 61 million weighted average shares. So with that, Bob, we are ready to go to Q&A.

Operator: Our first question comes from the line of Andrew Steinerman with JPMorgan. Please proceed with the question.

Andrew Charles Steinerman - JPMorgan

Securities LLC: Good evening. David H. Lissy - Bright Horizons Family Solutions, Inc.: Good evening. Andrew Charles Steinerman - JPMorgan

Securities LLC: I recall your team – evening, I recall your team talking about Bright Horizons overall margins would benefit as earlier classes of lease/consortium centers reached maturity, and we've got a fewer years of mixes of ramping classes in the lease/consortium centers. Has that inflection point shifted from second half of 2016 into 2017?
Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: So I think we're seeing some of the benefit this year, Andrew, as I mentioned, our full-service operating margins are up 60 basis points for the full year but 90 basis points in Q3. So, we are seeing the benefit come in, but there is the ongoing – the immediate timing of centers that we open this year and the ones that we've opened over the last 12 months to 18 months, the timing of their ramp has some variability from quarter-to-quarter effect and so we do have we think some headwinds there that, that part of the inflection will come next year. Andrew Charles Steinerman - JPMorgan

Securities LLC: Is that a change from where you thought the timing would be about a quarter ago, or is that on track with what you thought on the kind of whole portfolio of lease/consortium centers would do in second half and going into 2017?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yes, it's – I think that what we have now is October and November timeframe. The fall enrollment cycle is an important one for us and as we – quarter ago, we were looking at how we expected the ramp to continue into the fall.

And I'd say, we are just – we're seeing it stretching out a bit into the latter part of this year because of the timing of when those centers, either did open or have opened this fall. So, it's a slight shift, and so you are seeing some effect of that this year pushing into next year. Andrew Charles Steinerman - JPMorgan

Securities LLC: One more time. Did they open later than expected or is that how – how the plan was?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: So they have opened later than expected which is different than what the plan was.

And so earlier this year those that had opened a year ago, the trajectory of their ramp is just – it's just affected by the natural order of business. We just have – we've come through the fall and we see where enrollment is now and we have adjusted accordingly to the timing of how they are ramping. Andrew Charles Steinerman - JPMorgan

Securities LLC: Okay. And now they are ramping well, right?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: We see them ramping well, we think they are on track and we're just – they have an effect because of the concentration of the class is all.

Andrew Charles Steinerman - JPMorgan

Securities LLC: Understand. Okay. Thanks for the time. Appreciate it. David H.

Lissy - Bright Horizons Family Solutions, Inc.: Thanks, Andrew.

Operator: Thank you. Our next question comes from the line of Manav Patnaik with Barclays. Please proceed with your question. Manav Patnaik - Barclays Capital, Inc.: Thank you.

Good evening, guys. Just in terms of the different components of that 7% top-line growth, I just was hoping you just reiterate that that for us for the full year. And I think FX last time you said, it's about 2%, it sounds like maybe that's 0.5 point more, is that correct? And then should pricing in all of the net new organic growth ranges you gave us before roughly come down on the high-end, is that what we should assume?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Well, if I'm following you right, yes, FX is a bit more onerous than we had guided to last time because of the current state of the pound. So, it is rough figures, your 0.5% is probably right.

In terms of the remaining price increases were, we are seeing them probably in the upper half of our 3% to 4% range, so 3.5% to 4% and the other components of back-up, new center organic count, enrollment et cetera is in the same range. Manav Patnaik - Barclays Capital, Inc.: Got it. So the revision on the high-end and the top-line and from organic is also just down to what you just said in terms of the timing of opening in the later enrollments, correct?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Right. Manav Patnaik - Barclays Capital, Inc.: Okay.

And then just in terms of these lease/consortium, I mean five in a quarter, I guess, is that a higher than normal number? And also just thinking about the 55 that you opened so far since 2013, like is there a target like do you need that to be a 100 number or how do you think about that sort of growth aspiration?
David H. Lissy - Bright Horizons Family Solutions, Inc.: So, Manav, with respect to the five in a quarter, I think as I've spoken about in the past, while we have good visibility on center openings going out sort of 12 months to 18 months, predicting their opening in the micro can sometimes be challenging. So, it's hard to – there have been other quarters where we probably had as many that have opened in that quarter, but it's lumpy and sometimes hard to predict. And given the nature of where some of those centers are and the short-term losses associated with them and the need for them to ramp according to a schedule to offset those ramps, when we set out the year or reset out at a particular time to project it, we're sort of projecting where we think it's going to hit, and there are a lot of micro factors that affect our ability to get the center open, license, and be on track the way we had budgeted. So probably if we look back, we'd find other quarters where there have been as many openings, but, for example, we're going to open around 12 this year we expect in total and five of them just happened to be open in the third quarter.

Manav Patnaik - Barclays Capital, Inc.: Okay. All right. Thanks a lot, guys.

Operator: Thank you. Our next question comes from the line of Trace Urdan with Credit Suisse.

Please proceed with your question. Trace Adair Urdan - Credit Suisse Securities (USA) LLC (Broker): Hey, good afternoon. I'm sure this is going to be more beating of the horse here, but you had said earlier that you thought that the revenue growth in this third quarter would be between 5% and 6%, with 3% of FX headwind. It sounds like the FX at least in this quarter came in line, so what was left was a little bit short, is that also a function of the delay in the opening of the lease/consortium centers, or is there some other factors that cause the disconnect between what you expected and where it came in?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: I think the revenue growth that we had guided to is, we're basically in the range of that.

I think the element of timing is just timing of all openings. So lease/consortium, everything isn't just a lease/consortium center, but the timing of all center openings will have some effect as well as the estimates for the fall enrollment cycle timing. Trace Adair Urdan - Credit Suisse Securities (USA) LLC (Broker): Okay. All right. So, you're suggesting there's nothing going on other than timing? That fair?
Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: Yeah. That's fair. Trace Adair Urdan - Credit Suisse Securities (USA) LLC (Broker): Okay. And then if I missed this, I apologize, but the benefit resulting from the refinancing, did you size that for us for 2017?
David H. Lissy - Bright Horizons Family Solutions, Inc.: I think it's a little premature to size it at this point, Trace.

I think we commented that the effect will take place in 2017. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: And then we need to finish the process of the amendment itself. It's not completed yet. So when we have that completed, we can guide to it.

Trace Adair Urdan - Credit Suisse Securities (USA) LLC (Broker): Okay. Fair enough. Thank you.

Operator: Thank you. Our next question comes from the line of Gary Bisbee with RBC.

Please proceed with your question. Gary Bisbee - RBC Capital

Markets LLC: Hey, good afternoon. Just one more I guess on the center, the full-service centers business. Is the enrollment ramping more slowly once you get one open this fall, or I thought I heard you say something that might have implied that, or is this typically only the timing of when you open them? And the second part of that is just can you give us an update on how the mature centers are ramping from an enrollment perspective? I know you're getting closer to that normalized level over the last year. David H.

Lissy - Bright Horizons Family Solutions, Inc.: Yeah. Gary, it really relates to when the centers open, as Elizabeth talked about before, and then what enrollment trajectory you can achieve once they open. So when they open later, we're behind the curve and then you're sort of catching up to where you thought they would be as they play out. So with respect to your first question, it really comes down to timing. It is not – just to reiterate and say it again, we think we've chosen good locations for these centers.

We think and expect them to add good value down the line. So in short-term with respect to that. I'll let Elizabeth comment on the mature base. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yeah.

So the mature enrollment base, we're up about 1% this year, Gary, and so they are continuing, as I think we talked about a bit last quarter. We're continuing to make headway to that targeted high 78% to 80% utilization level, although the closer we get to that, that some of the earlier years we had the first couple, 5 percentage points have come back and now we're getting to the small eking out to that top-level again. So 1% is about where we are this year. Gary Bisbee - RBC Capital

Markets LLC: Okay. And is it right then that that would then put you within a point or two of getting to that normalized 80%?
Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: Yeah. We're still a couple percent to go, but it is sort of that gain curve is flattening out. Gary Bisbee - RBC Capital

Markets LLC: Okay. And then the timing of the openings aside this quarter, if we just think bigger picture beyond that, the center-based business has seen revenue grow more slowly the last two years in total relative to much of what you'd done prior to that, the recession aside. And I realize you haven't done the bigger change since you had a couple of big ones a few years ago, but can you just give us an update on maybe how you think about growing that business over the next few years and is there opportunity for more aggressive M&A? Should we think the last two years of bunch more of the onesies-twosies is realistically what you're at, at this point? And then also just any update on how you think about the potential and the opportunity to enter other markets? Thank you.

David H. Lissy - Bright Horizons Family Solutions, Inc.: Yeah. So Gary, I'll try to get through each of them one-by-one. So with respect to center growth, we see steady growth on the organic side between the employer-sponsored centers and the lease/consortium centers. We feel like the pipeline is there to provide for the growth outlook.

The overview that we gave you for 2017 is somewhat informed by our pipeline and feel good that that's on the organic side trending in a good direction. With respect to acquisitions, you're correct to point out that our larger strategic acquisitions have been lumpy because we've had – I think we had a year where he had a couple of them hit once and then it becomes a little bit lumpy from year-to-year. I will tell you that as I commented in my prepared remarks that the pipeline is in a good place and we feel good that there is a mix of larger strategic opportunities combined with the sort of more bread and butter acquisitions for us which are the smaller, few center operators. So when and if we can complete something, that's larger, remains a question mark. When and if we do, it will be because we've been able to find something we think will be a great value creator for us and it will make a lot of sense, we hope.

So we continue to push toward that in conversations, but it is sort of unpredictable. So when we offer our forward guidance, we do so really not counting on something that's much larger than what our typical acquisition portfolio looks like in an average year. So but they are still out there, and we will see where it takes us is the answer to that question. And I think your third question was whether or not we would expand to other markets and the answer to that is we remain active in discussions to continue to research a handful of markets around the world that we think might have an opportunity for us to play a role in the future. And while there is – I think as I may have said this in the past and it still remains true.

There is nothing on the new term horizon that I can point to right now. But I do believe there will come a point where we will decide that it makes sense for Bright Horizons to enter a new market and the more than likely manner in which we would do that would be acquiring a beachhead in the market, like we have done in several other markets that we've entered. So we continue to nurture relationships and research markets, and obviously over time we will see how that plays out. Gary Bisbee - RBC Capital

Markets LLC: Great. That you.

David H. Lissy - Bright Horizons Family Solutions, Inc.: Yeah. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Thanks.

Operator: Thank you.

Our next question comes from the line of Jeff Silber with BMO. Please proceed with your question. Henry Sou Chien - BMO Capital Markets (United States): Hey, good evening, guys. It's Henry. David H.

Lissy - Bright Horizons Family Solutions, Inc.: Hi, Jeff. Henry Sou Chien - BMO Capital Markets (United States): Hi. It's actually Henry Chien. David H. Lissy - Bright Horizons Family Solutions, Inc.: Hi, Henry.

Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Henry. Henry Sou Chien - BMO Capital Markets (United States): Hi, guys. I just had a question on the refinancing. Should we expect you to be adding to your essentially liquidity or your capacity in terms of your net sort of debt levels?
Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: So what we are is, we are in market now with mainly in amend and extend arrangement and looking to have the opportunity to draw on liquidity, if we choose to for a period of time. So, it's an opportunistic, but not – opportunistic to be able to have some structural debt and we can draw on it if we have a need, but otherwise we are not adding without a need. Henry Sou Chien - BMO Capital Markets (United States): Got it. Okay. And in terms of using M&A, can you just update us on how you are thinking about your overall capacity in terms of taking on any additional leverage for M&A purposes?
David H.

Lissy - Bright Horizons Family Solutions, Inc.: Yeah. I mean, I think that as I commented earlier, I think we have – if we have an opportunity that presents itself from an acquisition standpoint, we feel good about the access we have to fund that, whether that's through the cash flow we generate, our revolver or as Elizabeth said the flexible liquidity that we will have through the new amendment. So, we feel good about the flexibility we have and we'll see how things play out. But as she commented, we're not taking on debt perhaps for the sake of taking it on, we'll take on new debt if we feel like we need to – we need it for strategic purposes. Henry Sou Chien - BMO Capital Markets (United States): Okay.

All right. Thank you so much. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Thank you.

Operator: Thank you.

Our next question comes from the line of David Chu with Bank of America. Please proceed with your question. David J. Chu - Bank of America

Merrill Lynch: Hi, good evening. Can you speak to fall trends and how they perform relative to expectations, and maybe you can allude to which age groups perform better or worse than expected?
Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: Sure. So, as many of you know, we have a year round service that we provide, but we still have some cyclicality that comes in where families of older children withdraw over the summer and then we're rebuilding enrollment into the fall, so that's just by way of backdrop. And so from a fall enrollment standpoint, I think we feel like trends are positive. We don't really comment on enrollment trends by age group, but other than it tends to be certainly in our lease/consortium centers, the newer ones that we're opening as we've said we tend to enroll younger children first and grow our own preschools, but we've seen pretty consistent enrollment across all age groups, I would say, as we're going through the cycle. It's been where we have seen – we have talked about the price increases, they have also come through in the fall, and we've tended to be as I said about 3.5% to 4% on average, so at the higher end of the range that we would have targeted and that has been a neutral effect on the enrollment levels.

David J. Chu - Bank of America

Merrill Lynch: Okay. So, is the growth overall pretty comparable to last year?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yes. I think that's the right way to think about it.

David J. Chu - Bank of America

Merrill Lynch: Okay. And just around back-up care, you guys saw a nice lift. Anything to point out that led to the acceleration? It sounds like you guys maybe signed a handful of new clients. David H.

Lissy - Bright Horizons Family Solutions, Inc.: Well, I think as we had – as we had talked to you about in the past, we had anticipated that that would be the case that we would have a lift in the second half of the year, and I think we're seeing that happening and we expect that to continue. So it really comes down to the addition of – the timing of new client launches, the ability to have our existing clients who want to purchase more, and when they do that in the year and use of the service leads to that. So we had – I think we had told you that we anticipate that that would happen on the second half and we see that playing out. David J. Chu - Bank of America

Merrill Lynch: Okay.

And then just lastly, can we get an update on Brexit? I'm not sure if you have anything to add, but are there – have you guys had any conversations with clients that suggest that some firms will be relocating out of the UK?
David H. Lissy - Bright Horizons Family Solutions, Inc.: Really, there hasn't – no conversations directly with anybody, any clients around that. It's sort of a big picture issue I think that continues to sort of be discussed, but really from a practical perspective, we haven't had any business related issues related to Brexit. I will tell you that in the UK, different than the U.S., other than currency, by the way I should say, obviously that's the obvious effect that it had on us, but, I mean, directing UK to your question. But I will tell you that in the UK, our business model is less reliant on individual employers, so we have fewer single employer-sponsored centers in the U.K.

and more consortium/lease model centers because of the way the government support works for child care in the U.K., as we have discussed in the past. So in many ways, our risk is a little more diversified with respect to companies themselves moving out and thus losing as center because of that because we just have so few centers that are really aligned with one employer from whom that would matter. David J. Chu - Bank of America

Merrill Lynch: Okay. Great.

Thanks, Dave. That's very helpful. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Thank you.

Operator: Thank you.

Our next question comes from the line of Jeff Meuler with Baird. Please proceed with your question. Jeff P. Meuler - Robert W. Baird & Co., Inc.

(Broker): Thank you. Good afternoon. Can you just remind us the rollout of the new operating system for the back-up care business? What's the timeline of that and how is it going?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yes. So we're – it is going well.

We are in the process of just outlining what it will help us do. It is essentially a technology software platform with mobile capability that essentially allows us to take large data sets from our client partners, have them populated into an application that then allows us to with more agility and speed match up the users, the people who desire backup care, with where we have space available and so getting those matches to happen quickly and what the parent is looking for. So we have it rolled out in part and are on track to continue that over the next several months. And so I think that's essentially finishing out the rest of this year and is there any other color, Dave?
David H. Lissy - Bright Horizons Family Solutions, Inc.: No.

I think that's it. Jeff P. Meuler - Robert W. Baird & Co., Inc. (Broker): So you kind of go employer by employer and you have some of your employers live and the systems working, is that accurate?
David H.

Lissy - Bright Horizons Family Solutions, Inc.: Yes. We do roll it out employer by employer, Jeff. That's right. Jeff P. Meuler - Robert W.

Baird & Co., Inc. (Broker): Okay. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Their needs versus our needs. Jeff P.

Meuler - Robert W. Baird & Co., Inc. (Broker): Got it. And then I understand this is preliminary and high-level, but the 2017 preliminary outlook that you provided, just does it incorporate the refinancing savings and then some assumed normal level of tuck-in acquisition and share repurchase but none of the larger strategic things that you're looking at?
David H. Lissy - Bright Horizons Family Solutions, Inc.: Yes.

I think, we haven't, as I said earlier, included the impact from the refinancing because it's premature to do that, but I do think that we have assumed a normalized level of acquisitions like we typically do. I think our run rate is somewhere between 12 and 20 center acquisitions that we would... Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yeah, the equivalent of that. David H.

Lissy - Bright Horizons Family Solutions, Inc.: The equivalent revenue and earnings on average what we've seen. That's no different than the way we've given views on upcoming years at this stage in prior years. Obviously, as I said earlier, it doesn't include something much larger and that's because we don't have sight on that yet. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: And it wouldn't – an assumption around share repurchases either.

Jeff P. Meuler - Robert W. Baird & Co., Inc. (Broker): Okay. And then just finally, just to confirm the ed advisory, still good growth but decelerated, that's just timing related from your perspective?
David H.

Lissy - Bright Horizons Family Solutions, Inc.: Yes, there is no difference in our view on the growth of ed advising and there is some quarter-to-quarter variability. There's some comp based on when clients were added last year at this time and when they are added now and then their use levels and the service. It's going to move around a little bit, but there's no change to our view for that business. Jeff P. Meuler - Robert W.

Baird & Co., Inc. (Broker): Got it. Thank you.

Operator: We have a follow-up question coming from the line of Gary Bisbee with RBC. Please proceed with your question.

Gary Bisbee - RBC Capital

Markets LLC: Yes. Hi, guys. I just wanted to follow up on the question about the preliminary 2017 comments. Did you just say that the 15% to 20% earnings per share growth did – or 16% to 20%, I actually didn't hear which you originally said, but did not include benefit from refinancing so that would be incremental if, in fact, it does result in a lower interest rate?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yes.

I mean, it was a 15% to 20% range, Gary, and we're tending a bit more visibility in all that. Gary Bisbee - RBC Capital

Markets LLC: And I guess here's the perspective in which I ask. Maybe I'll just ask it directly. Do you think there's more work to do to get to that type of earnings growth today looking forward to 2017 then maybe one of the last few years when you gave an initial read? And I guess the reasons I asked that is obviously the FX drag looks like that's going to continue as a bigger headwind. There hasn't been a huge amount of M&A this year.

The margins look like they're expanding a little more slowly maybe than previously expected, though maybe that reverses next year, but it just feels to me like there might be some heavier lifting to get there relative to where you've been at this point in prior years. Is that fair or are there some reasons that you are very confident that the margins are quite stronger next year or something like that that would make that not accurate?
David H. Lissy - Bright Horizons Family Solutions, Inc.: I think, Gary, as you know, I think we have – when we look at it over the course of a year, we have reasonable visibility into the carryover effects of the things that we know about in terms of trends this year and how we think they're going to play out next year. We have a reasonable view on trends and conversions on the new client side and new center side, centers under development, and those kinds of things. We always take a view on acquisitions that is informed by not only the pipeline, but what our past experience and don't get too far over our skews on that, take a reasonable view but that obviously has to be converted because it's not things that are already teed up.

So I would say that we have a view that we gave you that we think is consistent with the way we run this business for a long time and the invisibility that we've always enjoyed. And that as we've commented before, we have a deliberate strategy around our lease/consortium model centers that if they add this sort of timing issue that we talked about before and some headwind, that's where we are now, and we have a view on where we think that trends into 2017 at this point. So I would say we are offering the view that we have now, and I really – I don't think if it as we have to work harder or less harder, we always have to work hard deliver on these results, so always have. But I don't really see it as out of the ordinary of we've done historically. Elizabeth J.

Boland - Bright Horizons Family Solutions, Inc.: I think Gary, you do point out one thing that I will mention because I'd say this is a different condition than we were all maybe thinking about a year ago, and it's not about the political, it's not about the election, but it is about where interest rates may go. The plan next year doesn't contemplate a major shift in interest rates, and we – what we guided to the 15% to 20%. If interest rates rise much more substantially, we do have a variable rate term loan. So we'll have visibility to be able to read guide to that, but that's one variable that I just want to point out. Gary Bisbee - RBC Capital

Markets LLC: Okay.

Great, thanks. I appreciate all that color. Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yeah.

Operator: Thank you.

We have another follow-up question comes from the line of Andrew Steinerman with JPMorgan. Please proceed with your question. Andrew Charles Steinerman - JPMorgan

Securities LLC: I just want to make sure I understood the 7% to 9% 2017 gross rate, that's including FX, I believe. And so my question is what would be the constant currency equivalent to the 7% to 9%?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: So, I don't have that right in front of me here, Andrew, sorry.

Andrew Charles Steinerman - JPMorgan

Securities LLC: Okay. No problem. And then my last question is, I think to go from 7% to 9% to the 15% to 20%, you're talking about above average margin expansion year, isn't that correct?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: I think that our view is that in 2017, yes, we would be in the range of the 75 basis points to 100 basis points of operating margin that we've talked about being the level that incorporates contributions from the lease/consortium centers and then continued ramp in our – or the enrollment gain in our mature base that we're still aching out a bit of a more in the normalized level. So that would be what we would be looking at for 2017.

Andrew Charles Steinerman - JPMorgan

Securities LLC: Great. And just to go back to the first question, the 7 & 9 includes FX headwind rate that's a reported basis?
Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yes. Andrew Charles Steinerman - JPMorgan

Securities LLC: Okay. Think you.

Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Yeah.

Operator: Thank you. There are no further questions at this time. David H.

Lissy - Bright Horizons Family Solutions, Inc.: Okay. Bob, thanks. And thanks to everybody for joining us on the call. And as always, we are here as needed with questions and see many of you on the road in the coming months. Thanks.

Elizabeth J. Boland - Bright Horizons Family Solutions, Inc.: Thanks, everybody.

Operator: Thank you Ladies and gentlemen, this concludes today's teleconference. You may disconnect the line at this time. Thank you for your participation.