McLeod, Inc.
Ticker: MCLD 221 Third Avenue S E, Suite 500
Exchange: NASDAQ-National Market Cedar Rapids, Iowa 52401
Industry: Service (319) 364-0000

Type of Shares:Class A Common Shares Filing Date:4/2/96
U.S. Shares:12,000,000 Offer Date:6/10/96
Non-U.S. Shares:0 Filing Range:$16.00 - $18.00
Primary Shares:12,000,000 Offer Price:$20.00
Secondary Shares:0 Gross Spread:$1.35
Offering Amount: $204,000,000 Selling:$0.81
Expenses:$1,500,000 Reallowance:$0.10
Shares Out After:44,036,448

ManagerTierPhone
Salomon Brothers Inc.Lead Manager (212) 783-2947
Bear, Stearns & Co. Inc.Co-manager (212) 272-2000
Morgan Stanley & Co. IncorporatedCo-manager (212) 703-4797

Auditor: McGladrey & Pullen
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/95 3/31/96 3/31/95 3/31/96
Revenue:$29.00$12.49$4.76Assets:$38.28
Net Income:-$11.33-$4.34$2.96Liabilities:$27.13
EPS:-$0.31-$0.12-$0.08Equity:$11.14

Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year,
unaudited figures are partial year

Business Description
The Company is a provider of integrated local and long distance telecommunications services to small and medium-sized businesses primarily in Iowa and Illinois. The Company derives its telecommunications revenue from (i) the sale of "bundled" local and long distance telecommunications services to end users, (ii) telecommunications network maintenance services and (iii) competitive access services, including special access and private line services. The Company offers "one-stop" integrated telecommunications services tailored to the customer's individual needs. This approach simplifies the customer's telecommunications procurement and management tasks and provides for customized services, such as "least-cost" long distance pricing and enhanced calling features, to customers who might otherwise be unable to secure such services directly on a cost-effective basis. The Company also operates a competitive access provider that offers a variety of special access and private line services to 73 large businesses, institutional customers and interexchange carriers. In addition, the Company provides network maintenance services for the State of Iowa's fiber optic network.

Use of Proceeds
The proceeds from the offering will be used to fund certain development and construction costs of the Company's fiber optic network, to repay all borrowings outstanding under the Credit Facility (as defined herein), to fund market expansion activities of the Company's telecommunications business, to fund operating deficits and net losses and for additional working capital and general corporate purposes.

Last updated: 10/28/96

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