KLC Projected Capital Expenditures for 2004-2005

Capital Expenditures. The following table shows the breakdown in KLC's projected capital expenditures: KLC Consolidated 2004PF 2005PF Maintenance $34.4 $36.6 New Centers 26.4 32.4 IT Spending and Other Capex 9.8 14.0 Total Capital Expenditures $70.6 $83.1 In 2004 and 2005, KLC spent $34.4 million and $36.6 million, respectively on maintenance capital expenditures, which includes refurbishment of its existing centers and equipment and supplies replacement costs. In addition, KLC spent $9.8 million in 2004 on corporate infrastructure improvements, primarily IT spending compared to $14.0 million in 2005. The remainder of KLC’s capital expenditures was used to expand KLC’s center base through both purchases of furniture, fixtures and equipment and construction of new owned centers. 81 HOUSE_OVERSIGHT_024514