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H Salaries, wages and benefits. Salaries, wages and benefits were $734.9 million, or 49.7% as a percentage of sales, during the 52 weeks ended December 31, 2005, compared to $725.0 million or 50.3%, for the same period in 2004. B@ Rent. Rent increased by $8.0 million to $121.1 million during the 52 weeks ended December 31, 2005, compared to the same period in 2004. The increase in rent was largely due to a center sale- leaseback program conducted by KinderCare during 2004, prior to Its acquisition by KLC. Pro forma rent does not include $96.3 million of intercompany rent payable by KLC OpCo to KLC PropCo as a result of the Real Estate Transaction. B Other costs. Other costs include costs directly associated with the centers such as business insurance, food, marketing, maintenance, utilities, transportation and classroom and office supplies. Other costs were $281.0 million during the 52 weeks ended December 31, 2005, compared to $274.4 million in the same period last year. Other costs were 19.0% of revenue during both years. General_and_ administrative expenses. General and administrative expenses, which include costs associated with the field and corporate oversight and support of KLC’s centers, were $126.0 million during the 52 weeks ended December 31, 2005, compared to $126.4 million fer the same period in 2004. General and administrative expenses included the substantial majority of estimated temporary parallel organization costs of $28.1 million and $23.3 million in 2004 and 2005, respectively, as discussed below. Adjusted EBITDA, Adjusted EBITDA was $238.0 million during the 52 weeks ended December 31, 2005 compared to $231.4 million in 2004. The increase in Adjusted EBITDA was primarily a result of slightly higher revenue and gross margin improvements enhanced by lower general and administrative costs before non-cash SAR accruals, net of restructuring charges and parallel organization costs. The table summarizes KLC’s calculation of Adjusted EBITDA as defined in KLC’s existing revolving credit agreement. See “Non-GAAP Financial Measures” for a discussion of our use of performance measures and related limitations. 79 HOUSE_OVERSIGHT_024512