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to become a publicly traded partnership within two years of this offering or the acquisition of KLC and k12.
As a result, KUE does not believe the anti-inversion legislation or any regulations promulgated within the
scope of the legislation's regulatory authority should apply to KUE although no assurance can be given in
this regard or with respect to any new acquisitions of or investments in U.S. corporations. In addition,
KUE does not believe that any other Code provision subjecting non-U.S. corporations to U.S. federal
income tax should apply to KUE or its subsidiaries, although no assurance can be in this regards. The
promulgation of contrary regulations or a successful challenge of either of these positions by the Internal
Revenue Service could materially reduce a holder's after-tax return and, thus, could result in a substantial
reduction of the value of the Units.

6.2.6 Currency Fluctuations

An investment in KUE is a U.S. dollar denominated investment. Contributions to and distributions from
KUE will be made in U.S. dollars. Fluctuations in value between the U.S. dollar and the Investor's
functional currency (if other than the U.S. dollar) may result in taxable income to the Investor.

6.2.7 Reporting Requirements

Investors who are U.S. Persons will be required to file an IRS Form 8865 with the Investor's U.S. federal
income tax return for the taxable year in which the Investor purchases the Common LP Units. Investors
who are U.S. Persons may, depending upon the size of their investment in the General Partner, be
required to file an IRS Form 5471 with the Investor's U.S. federal income tax return for the taxable year in
which the Investor purchases Class A ordinary shares in the General Partner. Additionally, depending on
the type of non-U.S. investments KUE makes, Investors who are U.S. Persons may be required to file
additional IRS Forms such as a Form 5471 in subsequent years.

6.3. Risks Related to Projections

6.3.1 The projections included in this Memorandum and otherwise provided to
potential Investors are subject to a number of assumptions and uncertainties;
potential Investors are cautioned not to place undue reliance on such projections

The projections included in this Memorandum and other models and forecasts that may be presented to
or discussed with Investors represent management's best estimates as of the date of this Memorandum
of KLC's, KLC OpCo's and KLC PropCo's projected results of operations for the years ended December
31, 2006 to 2011 (the "Projections"). The Projections were not prepared with a view toward compliance
with published guidelines of the SEC, the American Institute of Certified Public Accountants, or any
regulatory or professional agency or body or generally accepted accounting principles of the U.S. or any
other country. In addition, neither the Agents, Deloitte & Touche LLP, the Company's independent
auditors, nor any other independent expert, accountant or counsel has examined, reviewed or compiled
the Projections and, consequently, assume no responsibility for them. The Projections should be read
together with, and are qualified in their entirety by, the information contained in the rest of this "Risk
Factors" section, "Management's Discussion and Analysis of KLC's Pro Forma Results of Operations,"
"Business" and the financial statements and the related notes thereto included in this Memorandum.

The Projections do not include any expenses of any entity within the Company above the KLC level,
including KUE expenses ($17.5 million of the $20.0 million payable pursuant to the Fixed Overhead
Payment Agreement) that will be payable by KUE for administrative and other services. See "Related
Party Transactions." The Projections also do not include any projected expenses relating to grants of
Profits Participation Units or other equity-related grants, including for the Stock Appreciation Rights Plan
at Knowledge Schools, Inc. ("KSI"), pursuant to which payments may be made based on different
valuations of KSI stock and are based on the same multiples of Adjusted EBITDA used in 2005; actual
valuations are conducted annually and may be higher or lower. Finally, the Projections do not reflect
projected interest expenses on KUE debt.

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