Education is one of the largest sectors in the world and represents a large portion of a country's investments — Represents approximately 5% of global gross national income of $48 trillion. In the U.S. alone, education represents a $1 trillion market with for-profit education accounting for approximately $81 billion or 7.8% of the overall market. — The pre-K-12 segment of the education market is approximately a $610 billion market, with for- profit pre-K-12 education accounting for approximately $37.4 billion, over 6.1% of the pre-K-12 market.’ The for-profit education secter is growing at an attractive rate — U.S. education spending has grown at a stable compound annual growth rate ("CAGR”) of 5.7% since 1993. The for-profit component of this industry (pre-K-12, post secondary and corporate training) is projected to grow faster than the overall historical industry growth rate, at a 7.4% annual rate, reflecting the increasing importance of for-profit operations in the sector, to reach a market size of $116 billion by 2010.’ — In addition, these estimates do not refiect the growing segment of direct to consumer educational materials such as supplemental tutoring, which represented an estimated $20 billion of additional spending in 2004. EZ Increasing competition for human capital To remain competitive in the global economy, countries are investing heavily in the development of their human capital, especially at young ages — According to the World Bank's Worid Education Indicators, worldwide enrollment rates in pre- primary education increased by 37% from 1995 to 2003." — KUE believes that education companies will become significantly more valuable as countries become increasingly aware of the competitive advantages afforded by education. Of the top 100 global companies by market cap, not a single education company is represented on the list. As globalization of the economy and improving technologies flatten the playing field, demand for more standardized edu