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There are also several national chains, such as Bright Horizons Family Solutions, La Petite Academy,
Learning Care Group (ABC Learning) and Nobel Learning Communities, or regional for-profit companies
with sizeable numbers of centers and similar economies of scale in curriculum development, marketing
and site development.

Competitive Landscape within Early Childhood Education

[Pie Chart Graphic]
Labels:
Churches 5%
Other 1%
Public Sector Agencies 11%
For-Profit Child Education 5%
Non Profit Child Education 18%
Family Day Care Providers 60%

Source: Harris Nesbitt Research, Education and Training, September 2005 and The National Childcare Association.

KLC OpCo successfully competes against these companies, with the following differentiating factors: (i)
strong brand equity; (ii) a strong management team; (iii) grass roots level marketing; and (iv) a larger
network of community centers. KLC also has a number of employer-sponsored centers that gives the
Company greater breadth and depth. Finally, KLC is the only large competitor in the sector owned by an
education company. Following is a brief description of each of several of the national competitors.

■ ABC Learning (Public, traded on the ASX)

The Learning Care Group, ABC Learning's U.S. operating segment, has over 30,000 children enrolled
(full and part-time) nationwide. Under the Childtime and Tutor Time segments, Learning Care operates
child care centers and under the Franchise segment it licenses and provides developmental and
administrative support to franchises operating under the Tutor Time brand. As of October 14, 2005,
Childtime generated LTM sales of $220.7 million across 460 childcare centers in the U.S. (328 of which
are company owned and 132 of which are franchised locations). On January 11, ABC announced it had
successfully completed the acquisition of the Learning Care Group, Inc. for $159 million in cash. In
addition to the 460 centers located in the U.S., ABC operates 707 centers in Australia and New Zealand.

■ Bright Horizons (Public)

Founded in 1986, Bright Horizons Family Solutions is a leading provider of employer-sponsored child
care services. Bright Horizons operates 616 childcare and early education centers for over 600 clients.
The company serves more than 66,300 children in 39 states, the District of Columbia, Canada, Guam,
Ireland and the United Kingdom. In September of 2005, the company acquired ChildrensFirst Inc. As of
December 31, 2005, the company reported LTM sales and EBITDA of $625 million and $75 million,
respectively.

■ La Petite Academy (Private)

La Petite is the third largest operator of for-profit pre-school centers in the U.S., currently serving more
than 65,000 children in 649 centers located in 36 states and the District of Columbia. The company also

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