Monitronics generally defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization (including the amortization of subscriber accounts) and realized and unrealized loss on derivative instruments, and other non-cash or non-recurring charges such as acquisition related professional fees, write off of deferred financing costs, and stock-based and other non-cash long-term incentive compensation. Adjusted EBITDA does not represent cash flow from operations as defined by generally accepted accounting principles, should not be construed as an alternative to net income or loss and is indicative neither of Monitronics’ operating performance nor of cash flows available to fund all of its cash needs. It is, however, a measurement Monitronics believes is useful to investors to evaluate its operating performance. Adjusted EBITDA is also a measure that Monitronics believes is customarily used by financial analysts to evaluate the financial performance of companies in the security alarm monitoring industry and is one of the financial measures, subject to adjustments, by which Monitronics’ covenants are calculated under the agreements governing its debt obligations. For purposes of this presentation, Monitronics has applied the same definitions of Adjusted EBITDA to the financial information of Security Networks. Adjusted EBITDA Definition

Source: Company filings. (1) In accordance with US GAAP, pro-forma adjustments include those adjustments necessary for the three months ended September 30, 2013 had the acquisition of Security Networks occurred on January 1, 2012. Accordingly, these pro-forma adjustments include an increase in adjusted EBITDA associated with the reversal of a $2.5 million fair value adjustment that reduced deferred revenue acquired in the Security Networks acquisition. Adjusted EBITDA Reconciliations Monitronics Security Networks ($ in Thousands) For the Quarter Ended September 30, For the 12 Months Ended December 31, 2013 2012 2012 2011 Actual As Reported PF Adjustments (1) PF Adjusted Actual Actual Actual Net Income (Loss) ($9,310) $3,040 ($6,270) ($5,095) ($16,030) ($6,010) Amortization of subscriber accounts and dealer network 55,746 5,520 61,266 40,815 163,468 159,619 Depreciation 1,910 (212) 1,698 1,368 5,286 4,704 Restructuring charges 402 - 402 - Stock-based compensation expense 361 50 411 389 1,384 393 Security Networks acquisition-related costs 1,032 - 1,032 - - - Security Networks integration-related costs 535 - 535 - Realized/unrealized loss on derivative instruments - - - - 2,044 10,601 Refinancing costs - - - - 6,245 - Interest expense 25,732 4,384 30,116 19,243 71,328 42,655 Income tax expense 1,241 146 1,387 700 2,616 2,523 Adjusted EBITDA $77,649 $12,928 $90,577 $57,420 $236,341 $214,485 ($ in Thousands) For the 12 Months Ended December 31, 2012 Actual Net Income (Loss) $3,576 Amortization of subscriber accounts and dealer network 24,470 Depreciation 1,138 Stock-based compensation expense 388 Acquisition-related costs - Interest expense 15,816 Income tax expense 100 Contingent consideration earnout expense 982 Adjusted EBITDA $46,470