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27% Revenue growth year over year to $495.5 million; 39% Adjusted EBITDA* growth year over year to $91.4 million

PAETEC Holding Corp. (NASDAQ GS: PAET) today announced first quarter 2011 operating results. "The integration of the 2010 acquisitions is progressing as evidenced by solid revenue growth and improved operating performance," said Arunas A. Chesonis, chairman and CEO. "The combination of PAETEC's deep product portfolio and the enhanced solutions acquired during 2010 showed tangible results during the first quarter." Financial results for first quarter 2011 included the following:

• Revenue of $495.5 million;
• Adjusted EBITDA of $91.4 million;
• Net loss of $11.9 million;
• 33rd consecutive quarter of positive free cash flow,*  which increased to $44.5 million for first quarter 2011;
• Net cash provided by operating activities of $60.7 million;
• A cash balance of $103.9 million at March 31, 2011.

First Quarter 2011 Results Compared to First Quarter 2010
Revenue

• Total revenue of $495.5 million for first quarter 2011 increased 27.0% or $105.5 million over first quarter 2010 primarily due to a 21.4% growth in network services revenue, which resulted principally from the inclusion of a full quarter of revenue from Cavalier Telephone. PAETEC's acquisition of Cavalier Telephone closed in December 2010.
• Core network services revenue for first quarter 2011 was $336.8 million, an increase of 19.0% or $53.7 million over first quarter 2010 primarily due to the inclusion of Cavalier Telephone for the full 2011 quarter. Additionally, core network services revenue for first quarter 2011 showed modest organic growth before giving effect to the contribution of Cavalier Telephone.
• Core carrier services revenue for first quarter 2011 was $59.2 million, an increase of 32.6% or $14.6 million over first quarter 2010 primarily due to the inclusion of Cavalier Telephone for the full 2011 quarter. Core carrier services revenue organic growth before giving effect to the contribution of Cavalier Telephone was positive for first quarter 2011.
• Integrated solutions revenue of $36.3 million increased 119.4% or $19.7 million over first quarter 2010 due to the inclusion of the results of U.S. Energy Partners and Quagga Corporation for the full 2011 quarter and the growth in our IP Simple product.

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About PAETEC
PAETEC (NASDAQ GS: PAET) is personalizing business communications for medium-sized and large businesses, enterprise organizations, and institutions across the United States.  We offer a comprehensive suite of IP, voice, data and Internet services, as well as enterprise communications management software, network security solutions, CPE, and managed services.  For more information, visit www.paetec.com.