Kindercare Learning Companies Inc's Business Segments

As of January 3, 2026, the registrant operates under a Credit Agreement consisting of a $962.0 million First Lien Term Loan Facility and a $262.5 million First Lien Revolving Credit Facility. The Credit Agreement was amended in 2025 to reduce interest rates and increase borrowing capacity. The First Lien Term Loan Facility matures in June 2030, while commitments under the Revolving Credit Facility mature between June 2028 and October 2029. The agreement includes financial and nonfinancial covenants that restrict additional debt, business changes, and certain transactions. The company also maintains a $20.0 million letter of credit agreement maturing in December 2026. As of January 3, 2026, there were no outstanding borrowings under the Revolving Credit Facility, with $72.8 million in outstanding letters of credit. For fiscal year 2025, the company reported $238.5 million provided by operating activities, $154.4 million used in investing activities, and $13.3 million used in financing activities. The company’s obligations include $2.4 billion in lease obligations, $1.2 billion in long-term debt, $121.1 million in self-insurance obligations, and $44.1 million in deferred compensation plan liabilities. The company was in compliance with all Credit Agreement covenants as of January 3, 2026.

The Company determines its operating segments based on the management approach, considering the internal organization and reporting used by the Chief Operating Decision Maker (CODM), identified as the Chief Executive Officer. The Company operates as a single consolidated segment and has one reportable segment. This segment generates revenue primarily from providing early childhood education and care services at centers and before- and after-school sites. The CODM evaluates performance and allocates resources using the Company's consolidated net loss or income, monitors budget versus actual results, makes capital investment decisions, and assesses market competition and strategic objectives. Consolidated revenue, significant segment expenses, and net loss or income are reported in the consolidated statements of operations and comprehensive loss or income, while segment assets are reported as total assets on the consolidated balance sheets. The accounting policies for the consolidated segment are consistent with those described in Note 1, Organization and Summary of Significant Accounting Policies.