Press Releases

• 31% revenue growth year-over-year to $536.3 million
• 2.6% organic revenue growth in core network services sequentially
• $102.3 million in adjusted EBITDA, 64% growth year-over-year
• Improvement in customer and revenue churn

PAETEC Holding Corp. (NASDAQ GS: PAET) today announced third quarter 2011 financial and operating results. "We are pleased with our strong financial performance in the third quarter," said Arunas A. Chesonis, chairman and CEO. "Higher sales, lower churn, and operating efficiencies enabled us to exceed $100 million in adjusted EBITDA for the first time in the company's history." Financial results for third quarter 2011 included the following:

• Revenue of $536.3 million;
• Adjusted EBITDA* of $102.3 million;
• Net loss of $17.1 million;
• Free cash flow* of $56.7 million, which represented the 35th consecutive quarter in which PAETEC generated positive free cash flow;
• Net cash provided by operating activities of $40.0 million; and
• Cash and cash equivalents of $94.8 million at September 30, 2011.

Proposed Merger Transaction
On August 1, 2011, PAETEC and Windstream Corporation (NASDAQ GS: WIN) announced a proposed merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of July 31, 2011, among PAETEC Holding Corp., Windstream Corporation and Peach Merger Sub, Inc., a wholly-owned subsidiary of Windstream. The merger received approval of the PAETEC stockholders at a special meeting of PAETEC stockholders held on October 27, 2011. Upon completion of the merger, PAETEC stockholders will receive 0.460 shares of Windstream common stock for each share of PAETEC common stock they own as of the effective time of the merger. The companies continue to expect the merger to be completed by December 31, 2011, following the satisfaction or waiver of all conditions to the merger.

Quarterly Results - Third Quarter 2011 Compared to Third Quarter 2010
Revenue

• Total revenue of $536.3 million increased 31.3% or $127.8 million for third quarter 2011 from third quarter 2010, primarily due to the inclusion of revenue from Cavalier Telephone, which was acquired in December 2010.
• Core network services revenue increased 22.2% or $62.3 million to $343.0 million for third quarter 2011 from third quarter 2010.
• Core carrier services revenue for third quarter 2011 increased 32.0% or $14.4 million to $59.5 million from third quarter 2010.
• Integrated solutions revenue of $65.0 million for third quarter 2011 increased 73.3% or $27.5 million over third quarter 2010, primarily due to PAETEC's May 31, 2011 acquisition of XETA Technologies, Inc.

View Full Release

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.