Every indexed document

kindergarten and before and after school programs provided by public schools;

which reduces the funds available for other business purposes such

may restrict the Company from pursuing any of these alternatives.

sell assets or borrow more money. The Company cannot

and meet its other obligations depends on

the leveraged capital structure the Company plans to utilize may significantly

which may involve greater risks than those

whether before the completion of the Offering

there is no assurance that such negotiations will be successful and the

diversion of Company management attention and possible adverse effects

including risks associated with unanticipated

which often results in increased acquisition prices. There can be no

consummate such transactions on favorable

may be subject to risks in addition to those discussed below.

the following factors relating to the business of the Company and this

as if those transactions and related financing had occurred on January 1

except for weekly tuition) Fiscal Year Ended December 31

please see KLC's GAAP financial statements and those of KinderCare

2004. The rental income received by KLC PropCo in all periods presented is primarily

as if those transactions and related financing had occurred on