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EBITDA, Adjusted EBITDA and Adjusted EBITDAR have limitations as analytical tools, and you should
not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP.
Some of these limitations are:

■ they do not reflect our cash expenditures for capital expenditures or contractual commitments;

■ they do not reflect the cost of our non-cash stock-based compensation or our SAR plan or long term
incentive plan or the expense associated with allocating Profits Participation LP Units (as defined
below) to employees;

■ they do not reflect changes in, or cash requirements for, our working capital;

■ they do not reflect the significant interest expense, or the cash requirements necessary to service
interest or principal payments, on our indebtedness;

■ they do not reflect management fees;

■ although depreciation and amortization are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and our non-GAAP measures do not reflect cash
requirements for such replacements or the related expense;

■ they do not reflect the impact of earnings or charges resulting from the significant costs we have
incurred in integrating KinderCare, and we are likely to incur significant integration costs in future
acquisitions;

■ other companies, including other companies in our industry, may calculate these measures differently
than we do, limiting their usefulness as a comparative measure; and

■ they do not comply with the requirements of Item 10(e) of Regulation S-K or Regulation G of the
Securities and Exchange Commission (“SEC”).

Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDAR should not be
considered as measures of discretionary cash available to us to invest in the growth of our business or
reduce our indebtedness. We compensate for these limitations by relying on our GAAP results as well as
these non-GAAP measures.

For more information, see our consolidated financial statements and the notes to those statements
included elsewhere in this Memorandum.

FORWARD-LOOKING STATEMENTS

This Memorandum contains forward-looking statements, which involve risks and uncertainties. You can
identify forward-looking statements because they contain words such as “anticipates,” “expects,”
“should,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “may,” “approximately” and similar
expressions which concern, among other things, the Company’s results of operations, financial condition,
liquidity, prospects, growth, strategies and the industry in which the Company operates. Examples
include statements regarding anticipated growth in revenue, net income and EBITDA, expectations
regarding the likelihood of recurrence of certain charges and gains, expectations regarding capital
investments, and expectations regarding future cash generated from operations. These forward-looking
statements are based on our management’s current expectations, assumptions, estimates and
projections about us and our industry. You are cautioned that actual results could differ from those

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