1. Attrition Measurement Update Year End 2011 Developing Meaningful Trends Prepared By: TRG Associates, Inc. 860-395-0548 www.trgassociates.com

2. Defining Attrition Gross Attrition The loss of existing customers and their associated recurring monthly revenue (RMR) for contracted services during a particular customer / calendar cycle Net Attrition Gross Attrition plus the add back of “ like customer ” gains thru resigns of the existing locations – - The Home/Business location is your ultimate customer - Price increases for inflation - Price increases for additional services or technology www.trgassociates.com

3. Defining Attrition The Short Version The measurement of customer dissatisfaction with or need for the system Why Measure? Attrition measures customer dissatisfaction which, for the most part, is company caused. The Attrition Tracking Process should be managed to identify, focus on, and rectify those causes within each organization. www.trgassociates.com

4. Attrition Measurement Methodology Weighted Ending RMR Attrition Method Step 1: Cancelled RMR for the Reporting Period = Monthly Attrition Sum of Ending RMR for Each Month Step 2: Monthly Attrition (from Step 1)* 12 = Annualized Attrition www.trgassociates.com

5. Benefits of Weighted Ending RMR Method Accounts for and weights RMR acquisitions Accounts for timing of acquired RMR Accounts for rapid internal growth and the timing thereof Similar to many lending/equity institution’s preferred calculation. www.trgassociates.com

6. The Geography of Attrition NE/Mid Atlantic Southeast Midwest Southwest West International www.trgassociates.com

8. Annual Trend Dollars of RMR* www.trgassociates.com Region200920102011 Northeast $29,312,561$ 34,255,218 $ 38,123,162 Southeast $30,717,788$ 34,551,487 $ 42,678,957 Midwest $22,194,576$ 25,343,869 $ 32,755,145 Southwest $11,666,058$ 14,451,746 $ 20,315,471 West $33,418,789$ 33,359,003 $ 39,705,534 International $ 12,601,570$ 14,982,984 $ 5,035,296 $139,911,342$ 156,944,307 $ 178,613,564 *Recurring Monthly Revenue

9. Annual Trend Dollars of RMR Size200920102011* 3-50$ 248,301$ 237,446 $ 291,596 51-100$ 684,232$ 728,794 $ 659,794 101-200$ 3,187,759$ 2,637,789 $ 2,578,119 201-500$ 14,846,631$ 16,257,476 $ 17,103,573 501+ $120,944,419$ 137,082,802 $ 157,980,482 Total $139,911,342$ 156,944,307 $ 178,613,564 www.trgassociates.com *Includes branches of companies reflected by RMR size/Attrition if provided

10. Annual Trend Dollars of RMR www.trgassociates.com Customer Source200920102011 Dealer$37,684,131$ 49,061,372 $ 49,127,653 Traditional$79,688,494$ 80,388,844 $ 85,279,682 Mass Market$ 22,538,717$ 27,494,091 $ 44,206,230 Total$139,911,942$ 156,944,307 $ 178,613,564

11. Annual Trend Dollars of RMR Customer Type200920102011 Residential$69,568,717$ 74,839,754 $ 101,339,459 Commercial$ 70,342,625$ 82,104,553 $ 77,274,105 Total $139,911,342$ 156,944,307 $ 178,613,564 www.trgassociates.com

12. Attrition Update through Year End 2011 200920102011 RegionGrossNetGrossNetGrossNet Northeast10.06%7.96%10.02%7.66%10.34%7.94% Southeast11.92%9.81%11.46%9.15%11.63%9.47% Midwest11.29%8.18%10.92%7.89%10.92%9.23% Southwest13.70%11.12%12.35%9.75%11.98%10.06% West12.34%9.26%11.58%8.73%11.43%9.16% International11.64%9.00%11.74%8.83%10.76%9.42% www.trgassociates.com

13. Attrition Update through Year End 2011 200920102011 Co. SizeGrossNetGrossNetGrossNet 3-509.69%7.58%7.57%5.04%7.26%4.80% 51-10010.13%8.73%9.26%6.55%9.69%6.68% 101-20010.89%8.73%8.67%6.00%9.30%7.10% 201-50011.22%9.03%9.92%8.02%9.46%7.83% 501+11.74%9.09%11.41%8.68%11.43%9.02% www.trgassociates.com

14. Attrition Update through Year End 2011 www.trgassociates.com 200920102011 SourceGrossNetGrossNetGrossNet Dealer13.19%11.07%12.55%10.10% 12.36%9.91% Traditional11.16%8.31%10.66%7.85% 10.70%8.60% Mass Market10.85%8.40%10.33%7.87% 10.84%9.14%

15. Attrition Update through Year End 2011 www.trgassociates.com 200920102011 Customer TypeGrossNetGrossNetGrossNet Residential12.04%9.72%11.37%8.92% 11.26%9.17% Commercial11.27%8.43%11.03%8.23% 11.10%9.00%

16. Impact on Attrition Measurement with Publicly Held Company Results Excluding PHCIncluding PHC 2010201120102011 501+ RMR Companies$137.5M$158.0M$427.8M$448.7M Net Attrition Company Size8.68%9.02%11.42%11.73% Residential8.92%9.17%11.06%11.44% Commercial8.23%9.00%11.41%11.83% www.trgassociates.com Sources: SDM May 2012 – SDM 100 SEC Filings 10K Public Quarterly Company Reviews

17. Top Reasons for Attrition www.trgassociates.com

18. Reason Code Analysis Cancellation Reason 2008200920102011 Collection/Non Payment14.7%20.9%21.6% 19.1% Moved29.9%38.4%31.3% 33.9% Poor Service2.6%1.9%7.7% 2.0% Lost to Competition16.6%9.1%7.9% 13.5% No Longer Using System11.1%14.1%9.4% 7.6% Sold/Out of Business12.8%7.3%6.3% 6.8% Financial Difficulties4.9%5.8%9.3% 6.2% Property Abandoned/Vacant0.3%0.0%0.2% 0.3% End of Contract Term2.2%0.3%0.4% 0.8% Deceased/Rest home1.3%0.4%1.2% 0.7% PI Rescinded/RMR Reduction3.4%0.6%4.7% 9.1% Natural Disaster/Military0.2%1.2%0.0% www.trgassociates.com

19. TRG Maintains Full Confidentiality of Participant’s Figures Summary results as presented will be available on CSAA Web-Site (www.csaaintl.org)www.csaaintl.org TRG Web-Site (www.trgassociates.com)www.trgassociates.com Next update for 2012 – May 2013 Posted in June 2013 www.trgassociates.com