Welcome to the Bright Horizons Family Solutions fourth quarter earnings release conference call. (Operator Instructions) For opening remarks and introductions, I would like to turn the call over to David Lissy.

Joining me on the call is Elizabeth Boland, our Chief Financial Officer. And before I begin with my comments I’ll have Elizabeth go through some administrative matters.

Our earnings release went out over the wire after the close of the market today, and it’s also available on our website, brighthorizons.com. As just announced, the call is being recorded and it’s being webcast as well, and a complete replay will be available in either medium. For anyone wishing to access the phone replay, you can call 913-312-0414 and use pin code 4858257. The webcast will be available at our website under the Investor Relations section. In accordance with Reg FD, we use these conference calls and other similar public forums to provide the public and the investing community with timely information about our business operations and financial performance, along with our current expectations for the future. We adhere to restrictions on selective disclosure and limit our comments to items previously discussed in these forums. Certain non-GAAP measures may be discussed during the call, and detailed disclosures relative to these measures are included in our press release as well as the Investor Relations section of our website. The risks and uncertainties that may cause future operating results to vary from those we describe in our forward-looking statements made during this conference call include our ability to execute contracts for new client commitments, to enroll children and to retain client contracts as well as to operate profitably abroad. It depends on our ability to successfully integrate acquisitions. Other risks include capital investment and employee benefit decisions that employers are making, the effect of governmental tax and fiscal policies on employers considering worksite childcare, as well as the timing and completion of our previously announced merger agreement to be acquired by an affiliate of Bain Capital LLC. Lastly, you can see other risk factors that are set forth in our SEC filings including our Annual Report on Form 10-K. The 2007 10-K will be filed at the end of this month.

Last month we announced that Bright Horizons has entered into a definitive agreement to be acquired by Bain Capital and that transaction is expected to close sometime in the second calendar quarter of 2008. So today’s conference call is to provide investors with information about our recent operating and financial performance in the fourth quarter of 2007 and provide our current outlook as we head into 2008. As such, we’ll not discuss or take any questions regarding the transaction and refer any such questions that you might have to the information that’s already publicly available on our website or in our SEC filings. So, let me begin today with a review of our fourth quarter operating results. I’ll then finish up my remarks with a look ahead at our expectations for 2008, and as usual Elizabeth will follow me with a more detailed review of the quarter’s numbers and our outlook and then I’ll come back and join her for Q&A. First let me recap the numbers for the quarter. Revenue of $194 million was in line with our forecast and up 7% over last year’s fourth quarter. Let me point out to you upfront that during the quarter we recognized approximately $7 million in expenses associated with our transaction. So for the purposes of providing you with comparable numbers, today I’ll discuss our earnings results excluding those expenses. As such, operating margin of $20.5 million in the quarter expanded 30 basis points over last year’s fourth quarter and generated net income of $12 million resulting in earnings per share of $0.44 versus $11 million and $0.41 respectively in last year’s fourth quarter. Now let me give you some more color on our operating performance in the quarter. We added five new centers. Additions included new centers for Yale University,…

Dave just went through the top-level results for the quarter and I will just go through some details underlying those results. As Dave did I’ll caveat my remarks by clarifying that the figures I will be comparing also exclude the $7 million in acquisition related costs that have been reported in 2007. The pro forma effect of that is reflected in the attachments to the press release. Reported net income, operating income and EPS are all affected by these transaction expenses. But first looking at top line growth, the sources of the $12 million in revenue growth in the quarter over the last year remain consistent, new center capacity and program additions, enrollment gains, and rate increases. We added five centers in the fourth quarter and a total of 39 for the full year. Revenue also increased from the ongoing ramp up of enrollment in the centers that we’ve opened in 2005 and 2006, as well as from the newer services that Dave referenced especially Back-Up Care and College Coach. Lastly, rate increases of 4% to 5% are the primary source of increased revenue in our mature center group which is approximately 80% of our revenue base. Offsetting these increases were lower operating subsidies in our cost-plus group of centers totaling approximately $0.5 million as well as the effect of the closed UAW-Ford centers which as Dave mentioned generated approximately $7.5 million less in revenue in Q4 ‘07 than in Q4 ‘06. Center gross margins increased $4.2 million to $41 million in the quarter and were 21.1% of revenue compared to 20.3% in Q4 of ‘06. The primary factors in improved gross margin contribution include basically the solid execution in the majority of the core business, contributions from centers acquired and transitions in management, and contributions from our higher margin…

(Operator Instructions) And we’ll take our first question from Amy Junker - Robert Baird.

Have you noticed any pullbacks from some of your more major financial services clients at this point, just given the turmoil that’s happening with a lot of the bigger banks? Is that something that they’ve talked to you about or given you any sort of confidence that they are not going to be pulling back any of their centers at this point and specifically thinking I guess JPMorgan, Bank of America, Citigroup?

I think we have relationships with the folks you’ve just mentioned and others throughout the financial service industry and have for many, many years. I think what we have going on it really is client-by-client. In some cases we’re actually expanding relationships, opening some centers as recently as in 2008 already which we’ll talk about when we talk about the first quarter. In other cases I think it’s more of we expect 2008 to be more of we’ll just hang on to what we have and it won’t be an opportunity for expansion. Our experience in the past has been as we’ve gone through different economic cycles with many of these clients who have been with us for years, is we don’t see a pullback but rather we see certain clients go into times where they are not interested in talking about expansion. So, to date we haven’t had any worries with respect to pullbacks.

I believe most of those clients aren’t they cost-plus clients of yours and so if for instance some of the layoffs they’ve been doing might mean that there’s fewer people using the centers that risk falls on them or am I wrong about that?

I think it’s fair to say that many of them are cost-plus clients but some of them are also P&L where we have the P&L. But I would say that if I had to look at that class as a group they are probably more heavily weighted towards cost-plus and you are correct in your thoughts around the fact that when enrollment fluctuates either way, we’re not at risk in a cost-plus arrangement.

And we’ll take our next question from Jeff Silber - BMO Capital Markets.

Can we get a little more color underlying your first quarter ‘08 guidance either in terms of revenue growth, margins, etc., just to help us to model.

Yes, the first half, maybe expand on what I was alluding to on the Ford contract, the revenue growth that we’re seeing in Q4 is likely to be pretty consistent in the first half of the year where the 10% that we seek for all of ‘08 would manifest by higher growth in the back half. And then otherwise from a trending standpoint as that is relatively ratable on the earnings side the margin trends would be similar to prior years on an operating margin level and then the overhead piece of it is comparable as well in terms of turn.

You asked us not to ask any acquisition related questions but I’m going to try anyhow. What milestones should we be looking for between now and when the deal is going to be closing, what announcements, etc.

Jeff, I’m going to have to just give you the boilerplate, we can’t comment.

In terms of your relationships with your clients since you’ve announced the acquisition, have you seen any meaningful changes?

No

Do you have stock-based compensation in the quarter?

In the quarter, the stock-based comp is about just over a million dollars. It was a total of just over $4.5 million for the year.

And we’ll take our next question from Bob Craig - Stifel Nicolaus.

I know with your end market and geographic diversity why you’re not terribly affected by cycles but could you review the timing of any cyclical influence on front-end sales activity, and inquiry activity? I seem to recall I think you mentioning Dave that after 2001 it was a pretty decent lag between that downturn and the time where you really started to see a pick up in that front-end activity?

Yes I think, there are a couple of factors that go on, Bob. As you know following us for so long that we go through different economic cycles. The one place that we do see some sensitivity to the economy is in cyclical kinds of prospects, financial services, tech, consumer goods, and the sales cycle does get a little more elongated when the economy is softer in those areas. That’s counterbalanced, for us anyway, by our sort of acyclic clients, hospitals, universities, others and also we do see a little bit more of a robust opportunity in the acquisition area when the economy is a little softer because of sellers being a little less bullish about the foreseeable future. So, we are not really seeing yet, Bob, any differences in our sales cycle. Our average sales cycle as I said in my comments to Amy I think with respect to even in the cyclical sectors I think financial services, tech, we’re are still getting new commitments from prospects in those sectors. And the time it’s taking us to get them really isn’t any different than it has been in the past year or two but that would be something that we’d look out for if we saw that that would be a signal. We just haven’t seen any changes with respect to the sales cycle as we saw after 2001.

As long as we’ve covered you we haven’t led through a consumer led recession with you folks. Any outlook there, are you seeing any impact, parents pulling back at all on the service?

No, I think that when you sort of take out the effects of what we saw in that group of 35 centers in the third quarter which again we think that they are isolated in certain geographies and they are not indicative of any sort of pervasive issues that we are seeing. If you were to isolate and take them out, I think our enrollment trends, the rebound in the fourth quarter and the progression that we’re seeing in the Q1 is pretty consistent with what we’ve seen in prior year trends. So, that would be the area of course that we would, where if anything was to change we would see it.

So disengagement levels are normal?

Right.

Could you provide some metrics on Lipton?

Well, there are nine centers. They are back-up centers that are pretty similar in size to our overall base. They’ll have revenue in the range of $500,000 to $800,00 or $900,000 as a sort of bandwidth of size. Their capacities are similar. They are geographically based along the Eastern Seaboard, D.C., New York, and the New Jersey area. So, in terms of overlap they don’t really overlap much with centers that we already have. And except for those two clients that Dave mentioned that we have in common there is a nice tuck in to the footprint there from the Back-Up Care opportunity standpoint as well as the comprehensive full-service centers that we have in that same area. So, it allows us to get a cross sell entrée there. Relatively, their other performance is similar to our Back-Up Centers as well, I think we see some opportunity there principally from future sales and growth, but what they are doing in the $0.5 million to $800,000 is similar at the gross margin level around 20% or so.

I think, Dave you alluded the acquisition pipeline, can you give you some characterization of that pipeline between domestic, international, back-up versus full-service or any other add-on services that you are looking to?

I think mostly what we’re looking at now are the services we currently provide. I don’t think you’ll see us at this point in time. We’re kind of in digestion mode on the Back-Up suite of services and on College Coach and beginning to prove those businesses out. So I think what we’re mostly talking about in our pipeline, Bob, are core business opportunities kind of what we consider to be our bread and butter which is more of the smaller operators, 3 to15 center type operators both here and in Europe and the UK and Ireland where we operate.

We’ll take our next question from Jeff Lee - Signal Hill.

You said that College Coach had grown 30% in 2007, are you expecting a similar growth rate for 2008?

Yes, we’re expecting to grow to approximately that same level in 2008.

And then what are your expectations for the Back-Up Care Center business?

We run 72 Back-Up Centers at the end of ‘07, and then we added the Lipton centers and so we’ve gotten two tracks of growth in the Back-Up suite that’s additional. There’s a few centers in the pipeline that will be dedicated Back-Up Centers that are planned to open in 2008 that would be additive, like the Lipton centers are additive, and then there is additional sales of memberships throughout the rest of Bright Horizons network or through the Back-Up Care Advantage services. So, as we mentioned Back-Up Care Advantage generated about $6 million in revenue this year that was its first year out of the gate. I’d say we’re expecting growth there that’s certainly in the range like you’ve seen with College Coach in the 34% plus rate for ‘08 and we are optimistic about its prospects. The rest of the Back-Up group we would see growing similar to our full-service business in terms of new center ads and regular performance growth.

And we’ll take our next question from Amanda Miller - Austock.

I was wondering if you are seeing any changes in the competitive environment at all.

From our point of view the competitive environment is pretty similar to what we would have talked to the group about when we spoke in October and through the quarters last year. We still see our principle competitors for corporate-sponsored centers as the other larger chains that operate here that we’ve competed with on a kind of a client-by-client basis in certain geographies for many years and we still see them out there. And then wherever we are locally within the US or the UK we are always competing with smaller operators, regional operators, and local operators for contracts. So, I think that same landscape still exists today.

We’ll take our next question from Michael [Elhedge] – Private Investor. Michael [Elhedge] - Private Investor: I was wondering if you could help address two related questions. The first is, notwithstanding the swooning stock price at your company since your Q3 results, can you articulate some of the specific merits of your proposed go private transaction since I can’t seem to find anything that addresses such benefits clearly in any of your regulatory filings or press releases?

I think you’ll see those in the preliminary proxy when it’s filed and that will be on file shortly, all the description of the rationale will be included there. Michael [Elhedge] - Private Investor: Will that also cover some of the reasons why the Board felt a go private transaction with such high leverage would better done by an outside buyer as opposed to something that the company would pursue on its own while still retaining its public listed status?

Again, Michael, our intent today was to talk about our results of the fourth quarter. And we’re not prepared to comment on the transaction. I think as Elizabeth said, you’ll find all of our rationale on file in the preliminary proxy which should be filed shortly.

It appears we have no further questions at this time.

Thank you for everybody for joining us and for all your support throughout the years. For many of you it’s been a long time and we’ve appreciated your support as the company has grown and hope to talk you again soon.