McLeod Steps Down at McLeod

NEW YORK -- Forstmann Little & Co. and McLeodUSA Incorporated (Nasdaq: MCLDD) today announced a new senior management team for the competitive local exchange carrier in the wake of the successful completion last week of its previously announced recapitalization. Forstmann Little has acquired 58% voting control of McLeodUSA, which has substantially deleveraged its balance sheet, positioning it to execute a focused growth strategy in its 25-state regional market. McLeodUSA has reduced its debt by $3 billion and its annual interest expense by 87% or approximately $315 million. Chris A. Davis, Chief Operating and Financial Officer of McLeodUSA since August, and a Special Limited Partner of Forstmann Little, has been named Chairman of the Board and Chief Executive Officer. Founder and current Chairman Clark E. McLeod has decided to retire. Stephen C. Gray continues as President and will focus primarily on sales, marketing and customer service. G. Kenneth Burckhardt, who previously worked with Ms. Davis at Gulfstream Aerospace, has joined as Executive Vice President, Chief Financial Officer and a Director. Group Vice Presidents for Finance, Information Technology, Marketing and Materials Management, three of whom were previously on the management team at Gulfstream, have also recently joined the Company. Theodore J. Forstmann, Senior Partner of Forstmann Little & Co. and Chairman of the Executive Committee of the McLeodUSA Board, said, "We have rapidly and successfully implemented an innovative financial restructuring with virtually no disruption to our customers. McLeodUSA now has an appropriate capital structure and the nucleus of a new management team to take advantage of the many growth opportunities in its regional markets. Chris Davis has already made a huge difference – and without her we never would have gotten to this point. She is the right executive to lead the new McLeodUSA and its talented employees. We will complete the management team and make certain additions to the Board in the next 60-90 days. This company now has the pieces in place to create long-term value for shareholders."McLeodUSA Inc.Forstmann Little & Co.