Press Releases

• 28% revenue growth year-over-year to $507.1 million
• Positive revenue momentum continues
• 51% adjusted EBITDA* growth year-over-year to $98.6 million
• Integration synergies drive stronger margins
• Completed acquisition of XETA Technologies on May 31, 2011
• Announced definitive merger agreement with Windstream Corporation

PAETEC Holding Corp. (NASDAQ GS: PAET) today announced second quarter 2011 operating results. "With strong financial results and expanded capabilities through our acquisition of XETA Technologies, we are pleased with our 2nd quarter performance," said Arunas A. Chesonis, chairman and CEO. "Additionally, the ongoing integration of Cavalier Telephone is moving along smoothly with related synergies continuing to positively impact margins." Financial results for second quarter 2011 included the following:

• Revenue of $507.1 million;
• Adjusted EBITDA of $98.6 million;
• Net loss of $9.4 million;
• 34th consecutive quarter of positive free cash flow,*  which increased to $45.7 million;
• Net cash provided by operating activities of $51.8 million;
• A cash balance of $102.6 million at June 30, 2011.

Second Quarter 2011 Results Compared to Second Quarter 2010 Results
Revenue

• Total revenue of $507.1 million for second quarter 2011 increased 28.0% or $111.0 million over second quarter 2010 primarily due to a 21.3% growth in network services revenue, which resulted principally from the inclusion of a full quarter of revenue from Cavalier Telephone
• Core network services revenue for second quarter 2011 was $334.2 million, an increase of 17.3% or $49.4 million over second quarter 2010 primarily due to the inclusion of Cavalier Telephone results for the full 2011 quarter.
• Core carrier services revenue for second quarter 2011 was $61.3 million, an increase of 36.2% or $16.3 million over second quarter 2010 primarily due to the inclusion of Cavalier Telephone results for the full 2011 quarter.
• Integrated solutions revenue of $45.2 million increased 98.3% or $22.4 million over second quarter 2010 due to the inclusion of the results of XETA Technologies, which was acquired on May 31, 2011, and Quagga Corporation for the full 2011 quarter.

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About PAETEC
PAETEC (NASDAQ GS: PAET) is personalizing communications and energy solutions in 86 of the top 100 metropolitan areas across the United States. We offer a comprehensive suite of network services (voice, data and fiber solutions), as well as managed services, cloud and data center services, software and technology, and energy services. For more information, visit www.paetec.com.