SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15(D) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of Earliest Event Reported): July 23, 2003

                                ______________

                            MCLEODUSA INCORPORATED

                                ______________

              (Exact Name of Registrant as Specified in Charter)

            DELAWARE                    0-20763           42-1407240
----------------------------------   -------------  ---------------------
(State or Other Jurisdiction of       (Commission       (IRS Employer
         Incorporation)               File Number)    Identification No.)

                          McLeodUSA Technology Park,
                               6400 C Street SW,
                                P.O. Box 3177,
                          Cedar Rapids, IA 52406-3177
                  __________________________________________
              (Address of Principal Executive Offices) (Zip Code)

      Registrant's telephone number, including area code: (319) 364-0000
                                ______________




ITEM 9.       REGULATION FD DISCLOSURE.

The information contained in this Item 9 of this Current Report is being
furnished pursuant to "Item 12. Results of Operations and Financial Condition"
of Form 8-K. The information in this Current Report, including the attached
Exhibit, shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be deemed
incorporated by reference into any filing under the Securities Act of 1933,
except as shall be expressly set forth by specific reference in such filing.

On July 23, 2003, we announced our financial and operating results for the
fiscal quarter ended June 30, 2003, and certain other information, in a press
release, a copy of which is attached hereto as Exhibit 99.1.

                                   SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: July 23, 2003                    McLEODUSA INCORPORATED


                                       By: /s/ G. Kenneth Burckhardt
                                       ------------------------------
                                       G. Kenneth Burckhardt
                                       Chief Financial Officer

                                 EXHIBIT INDEX

Exhibit
  No.                        Exhibits

99.1                         Press Release, dated July 23, 2003


<PAGE>

                                                                 Exhibit 99.1

[GRAPHIC OMITTED]

                 McLeodUSA Reports Second Quarter 2003 Results

o     EBITDA OF $21 MILLION MARKS FIFTH CONSECUTIVE POSITIVE EBITDA QUARTER

o     ON-SWITCH PLATFORM MIX INCREASES TO 58% FROM 42% IN 2Q '02

o     CUSTOMER TURNOVER DECREASES TO 2.4% FROM 3.1% IN 2Q '02

CEDAR RAPIDS, IOWA - JULY 23, 2003 - McLeodUSA Incorporated (Nasdaq: MCLD),
one of the nation's largest independent, competitive telecommunications
services providers, today reported financial and operating results for the
quarter ended June 30, 2003.

Total revenues for the quarter were $222.6 million and gross margin was $94.5
million. SG&A expenses for the quarter were $73.5 million, including a $7.9
million recovery of the reserve for WorldCom pre-petition receivables that was
recorded in the second quarter of 2002. EBITDA(1) (earnings before interest,
taxes, depreciation and amortization) for the competitive telecommunications
("Telco") business for the period was $21.0 million including the receivables
recovery. Reported net loss for the quarter was $(72.8) million, or a loss per
common share of $(0.27).

"In the second quarter, we remained focused on the execution of our strategic
plan. Given the sustained economic challenges in our marketplace, we were
particularly pleased to add Walgreens to our customer list and to be approved
by General Motors Dealer Equipment to provide critical data services for GM
dealers across our 25 state-footprint," said Chris A. Davis, Chairman and
Chief Executive Officer. "In the quarter, we also saw the benefits of the
significant operational improvements we continue to make, resulting in gross
margin of 42.4% of revenue compared with 39.2% in the first quarter of this
year. We are very pleased to have again achieved positive Telco EBITDA for the
fifth consecutive quarter."

For the quarter ended June 30, 2003, total Telco revenues of $222.6 million
compared to $225.9 million in the first quarter of 2003 and $254.5 million in
the second quarter of 2002. Second quarter revenues include the impact of the
most recent reduction in access rates being phased in under a June 2001 FCC
order. Excluding this access rate reduction, second quarter revenues were
essentially flat with the first quarter. The full impact of this most recent
access rate reduction will affect the Company's third quarter results by
reducing revenue approximately $10 million. Compared with the second
quarter of 2002, revenue for second quarter 2003 was down $31.9 million
primarily driven by fewer customers, including the Company's planned efforts
to eliminate non-profitable customers. Year over year, local service, private
line and data revenues per customer increased, but were partially offset by
lower average long distance revenue per customer.

---------
(1)EBITDA is a non-GAAP industry convention or standard measure portraying cash
operating earnings. It is included in the Company's discussion of its 2003 and
2002 financial results because the Company believes it is a meaningful measure
of actual operating performance. EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals and results of
discontinued operations. Use of EBITDA is not intended to replace measures of
financial performance that are reported in accordance with U.S. generally
accepted accounting principles.


Gross margin for the second quarter 2003 was $94.5 million compared to $88.5
million in the first quarter of 2003 and $103.0 million in the second quarter
of 2002. Gross margin as a percent of revenue improved to 42.4% versus 39.2%
in the first quarter of 2003 and 40.5% in the second quarter of 2002. The
improvement in gross margin reflects the ongoing benefit of network cost
reductions, continued migration of customers to the McLeodUSA network and the
elimination of non-profitable customers versus the 2002 results.

Customer platform mix at the end of the second quarter 2003 was 58% UNE-L, 7%
resale and 35% UNE-M/P versus 56%, 13% and 31%, respectively, at the end of
the first quarter of 2003 and 42%, 21% and 37%, respectively, at the end of
the second quarter 2002 reflecting continued migration of customers from
resale to higher margin platforms, as well as installation of new customers
on-switch. Customer turnover in the second quarter was essentially flat with
first quarter of 2003 at 2.4% and down from 3.1% in the second quarter of
2002.

SG&A expenses of $73.5 million in the second quarter of 2003 include a $7.9
million recovery against $8.3 million of WorldCom pre-petition receivables
that were reserved in the second quarter of 2002. An agreement was reached
with WorldCom in June of 2003 to offset pre-petition receivables against
amounts the Company owed WorldCom for pre-petition services. Excluding this
reserve and recovery second quarter 2003 SG&A expenses were $81.4 million
compared to $81.7 million in the first quarter of 2003 and $88.7 million in
the second quarter of 2002. Telco EBITDA in the second quarter of 2003 was
$21.0 million (including the $7.9 million recovery) versus $6.8 million in the
first quarter of 2003 and $6.0 million in the second quarter of 2002
(including the $8.3 million reserve).

Total Telco revenues, excluding discontinued operations, for the six months
ended June 30, 2003 were $448.5 million versus $513.9 million in the
comparable 2002 period. Telco gross margin for the six-month period ending
June 30, 2003 was $183.0 million in 2003 versus $189.2 million in 2002. Gross
margin as a percent of revenue for the six-month period improved to 40.8% from
36.8% in 2002. Telco EBITDA was $27.8 million for the six month 2003 period
versus $1.1 million in 2002.

The Company ended the quarter with $83.0 million of cash on hand. Total
capital expenditures for the second quarter of 2003 were $23.1 million and for
the six-month period ending June 30, 2003 were $36.9 million as the Company
continued to manage volume related capital expenditures consistent with
realized revenue. Network quality, process improvement and cost reduction
capex remained essentially on plan. The Company is currently re-evaluating the
timing of its $350 million 2003-2004 capex plan.

Other highlights in the quarter included:

|X|      Signed an agreement with Walgreen Co., the nation's largest drugstore
         chain, to be their primary local telecommunications services provider
         to 538 Walgreen's stores with nearly 5,000 business lines. The
         installation for all 538 locations was completed in approximately
         three weeks.

|X|      Announced General Motors Dealer Equipment has approved McLeodUSA to
         provide critical data services for General Motors dealers across the
         25 states where McLeodUSA offers services.

|X|      Announced the launch of Preferred Advantage Integrated Access, which
         combines voice, data and Internet services over a single, reliable
         high-speed connection. McLeodUSA customers will now have the
         opportunity to add single channel increments of additional local
         service and high-speed Internet access at a single price per voice or
         data channel.

|X|      Announced a substantially strengthened joint marketing program with
         Yellow Book USA. McLeodUSA's new corporate branding will now be
         included in the top advertising position on 30 million Yellow Book
         phone directory covers, and the Company's new branding and Preferred
         AdvantageSM messaging will appear in key headings inside the
         directories and on Yellow Book's Website.

|X|      Completed tariff approval in all eight states for McLeodUSA to expand
         its residential Preferred Advantage local, long distance and Internet
         services. These states include Washington, Texas, Utah, Oregon,
         Missouri, Arizona, New Mexico and Ohio.

|X|      Launched "Centers of Excellence," an innovative Customer Care program
         and service model, designed to provide a more personalized and
         streamlined customer service experience.

|X|      The Company regained compliance with the minimum bid price listing
         requirements under the Nasdaq Marketplace Rules to continue to trade
         its common stock on The Nasdaq SmallCap Market(R).

|X|      McLeodUSA was named to the Russell 3000(R) Index effective July 1,
         2003. The Index contains the largest 3,000 incorporated companies in
         the United States and its territories.

|X|      McLeodUSA Chairman and CEO, Chris A. Davis was awarded a national
         2003 StevieTM Award for "Best Executive" in the inaugural American
         Business AwardsSM ceremony held April 30, 2003 in New York City. The
         American Business Awards are the first national, all-encompassing
         business awards program honoring great performances in the workplace.

|X|      Added two experienced executives to the Company's Leadership Team:
         Patrice Carroll as Group Vice President to lead the development and
         implementation of the Company's strategic business initiatives; and
         Kurt Langel as Vice President to lead the Human Resources team and
         the Company's ongoing employee StarQuality Training and Certification
         program.

Conference Call

McLeodUSA will host a conference call on Wednesday, July 23, 2003, at 10 a.m.
Eastern Time to discuss second quarter results and the information contained
in this release. The call may be accessed at 888-271-9098 (U.S.) or
706-634-6027 (International). A replay will be available approximately 2 hours
after completion of the call at 800-642-1687 (U.S.) or 706-645-9291
(International), Conference ID No. 1715163. The audio replay will be available
through midnight ET on Wednesday, July 30, 2003. The call will also be Webcast
live and available via replay at:
http://www.mcleodusa.com/html/ir/streamingmedia.php3

                                     # # #


About McLeodUSA

McLeodUSA provides integrated communications services, including local
services, in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The
Company is a facilities-based telecommunications provider with, as of June 30,
2003, 38 ATM switches, 45 voice switches, 584 collocations, 435 DSLAMs and
3,710 employees. As of April 16, 2002, Forstmann Little & Co. became a 58%
shareholder in the Company. Visit the Company's Web site at www.mcleodusa.com.

Some of the statements in this press release include statements about our
future expectations. Statements that are not historical facts are
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act. Such
statements may include projections of financial and operational results and
goals, including revenue, EBITDA, profitability, savings and cash. These
forward-looking statements are subject to known as well as unknown risks and
uncertainties that may cause actual results to differ materially from our
expectations. Our expectations are based on various factors and assumptions
and reflect only our predictions. Factors that could cause actual results to
differ materially from the forward-looking statement include technological,
regulatory, public policy or other developments in our industry, availability
and adequacy of capital resources, current and future economic conditions, the
existence of strategic alliances, our ability to generate cash, our ability to
implement process and network improvements, our ability to attract and retain
customers, our ability to migrate traffic to appropriate platforms and changes
in the competitive climate in which we operate. These and other risks are
described in more detail in our most recent Annual Report on Form 10-K and
Form 10-K/A both filed with the SEC. The Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of future
events, new information or otherwise.

Contact:

McLeodUSA Incorporated, Cedar Rapids, IA

Investor Contact: Bryce Nemitz

Press Contact:    Bruce Tiemann

Phone:  (319) 790-7800

mcleodusa_ir@mcleodusa.com
<PAGE>

MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share data)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                     REORGANIZED           REORGANIZED         PREDECESSOR
                                                                      MCLEODUSA             MCLEODUSA           MCLEODUSA

                                                                 ---------------------  ------------------ ---------------------
                                                                  THREE MONTHS ENDED     APRIL 17, 2002       APRIL 1, 2002
                                                                    JUNE 30, 2003       TO JUNE 30, 2002    TO APRIL 16, 2002
                                                                 ---------------------  ------------------ ---------------------

<S>                                                                    <C>                  <C>                  <C>
Revenue                                                                $       222.6        $      207.2         $        47.3

Operating expenses:

    Cost of service (exclusive of depreciation shown
        separately below)                                                      128.1               119.4                  32.1
    Selling, general and administrative                                         73.5                79.5                  17.5
    Depreciation and amortization                                               85.1                59.5                  17.4
    Reorganization charges, net                                                    -                   -               1,539.6
    Restructuring charge (adjustment)                                              -                   -                  (6.8)
                                                                 ---------------------  ------------------ ---------------------
        TOTAL OPERATING EXPENSES                                               286.7               258.4               1,599.8
                                                                 ---------------------  ------------------ ---------------------
        OPERATING LOSS                                                         (64.1)              (51.2)             (1,552.5)
                                                                 ---------------------  ------------------ ---------------------

Nonoperating (expense) income:

    Interest expense, net of amounts capitalized                                (8.3)               (8.2)                 (1.8)
    Other (expense) income                                                      (0.4)                1.1                  (1.0)
    Gain on the cancellation of debt                                               -                   -               2,372.8
                                                                 ---------------------  ------------------ ---------------------
        TOTAL NONOPERATING (EXPENSE) INCOME                                     (8.7)               (7.1)              2,370.0
                                                                 ---------------------  ------------------ ---------------------

        (LOSS) INCOME FROM CONTINUING OPERATIONS                               (72.8)              (58.3)                817.5

Discontinued operations:

    Income from discontinued operations (including net (losses) gains on
       disposals of ($2.9) and $151.2 for the periods April 17, to

       June 30, and April 1 to April 16, 2002, respectively.)                      -                13.0                 152.6
                                                                 ---------------------  ------------------ ---------------------
        NET (LOSS) INCOME                                             $        (72.8)       $      (45.3)        $       970.1
                                                                 ---------------------  ------------------ ---------------------
Preferred stock dividend                                                        (1.2)               (1.1)                    -
                                                                 ---------------------  ------------------ ---------------------
        NET (LOSS) INCOME APPLICABLE TO COMMON SHARES                 $        (74.0)       $      (46.4)        $       970.1
                                                                 =====================  ================== =====================

Basic and diluted (loss) income per common share:

    (Loss) income from continuing operations                          $        (0.27)       $      (0.22)        $        1.30
    Discontinued operations                                                        -                0.05                  0.25
                                                                 ---------------------  ------------------ ---------------------
    (Loss) income per common share                                    $        (0.27)       $      (0.17)        $        1.55
                                                                 =====================  ================== =====================
Weighted average common shares outstanding                                     276.9               276.3                 627.7
                                                                 =====================  ================== =====================

RECONCILIATION OF EBITDA(1):

Net (loss) income                                                     $        (72.8)       $      (45.3)        $       970.1
Discontinued operations                                                            -               (13.0)               (152.6)
Nonoperating expense (income)                                                    8.7                 7.1              (2,370.0)
Restructuring charge (adjustment)                                                  -                   -                  (6.8)
Reorganization charges, net                                                        -                   -               1,539.6
Depreciation and amortization                                                   85.1                59.5                  17.4
                                                                 ---------------------  ------------------ ---------------------
                                                                       $        21.0         $       8.3         $        (2.3)
                                                                 =====================  ================== =====================

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.

</TABLE>




<PAGE>

MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share data)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                       REORGANIZED          REORGANIZED          PREDECESSOR
                                                                        MCLEODUSA            MCLEODUSA            MCLEODUSA

                                                                   --------------------  -------------------  ------------------
                                                                    SIX MONTHS ENDED       APRIL 17, 2002      JANUARY 1, 2002
                                                                      JUNE 30, 2003       TO JUNE 30, 2002    TO APRIL 16, 2002
                                                                   --------------------  -------------------  ------------------

<S>                                                                     <C>                   <C>                 <C>
Revenue                                                                 $       448.5         $      207.2        $      311.4

Operating expenses:

    Cost of service (exclusive of depreciation shown
        separately below)                                                       265.5                119.4               211.2
    Selling, general and administrative                                         155.2                 79.5               108.9
    Depreciation and amortization                                               167.3                 59.5               126.3
    Reorganization charges, net                                                     -                    -             1,596.8
    Restructuring charge (adjustment)                                               -                    -                (6.8)
                                                                   --------------------  -------------------  ------------------
        TOTAL OPERATING EXPENSES                                                588.0                258.4             2,036.4
                                                                   --------------------  -------------------  ------------------
        OPERATING LOSS                                                         (139.5)               (51.2)           (1,725.0)
                                                                   --------------------  -------------------  ------------------

Nonoperating (expense) income:

    Interest expense, net of amounts capitalized                                (17.0)                (8.2)              (33.2)
    Other (expense) income                                                       (0.4)                 1.1                 2.0
    Gain on the cancellation of debt                                                -                    -             2,372.8
                                                                   --------------------  -------------------  ------------------
        TOTAL NONOPERATING (EXPENSE) INCOME                                     (17.4)                (7.1)            2,341.6
                                                                   --------------------  -------------------  ------------------

        (LOSS) INCOME FROM CONTINUING OPERATIONS                               (156.9)               (58.3)              616.6

Discontinued operations:

    Income from discontinued operations (including net gain on
     disposals of $148.3 for the period January 1 to April 16, 2002).               -                 13.0               167.1
                                                                   --------------------  -------------------  ------------------
        NET (LOSS) INCOME                                              $       (156.9)        $      (45.3)       $      783.7
                                                                   --------------------  -------------------  ------------------
Preferred stock dividend                                                         (2.4)                (1.1)               (4.8)
                                                                   --------------------  -------------------  ------------------
        NET (LOSS) INCOME APPLICABLE TO COMMON SHARES                  $       (159.3)        $      (46.4)       $      778.9
                                                                   ====================  ===================  ==================

Basic and diluted (loss) income per common share:

    (Loss) income from continuing operations                           $        (0.58)        $      (0.22)       $       0.97
    Discontinued operations                                                         -                 0.05                0.27
                                                                   --------------------  -------------------  ------------------
    (Loss) income per common share                                     $        (0.58)        $      (0.17)       $       1.24
                                                                   ====================  ===================  ==================
Weighted average common shares outstanding                                      276.6                276.3               627.7
                                                                   ====================  ===================  ==================

RECONCILIATION OF EBITDA(1):

Net (loss) income                                                      $       (156.9)        $      (45.3)       $      783.7
Discontinued operations                                                             -                (13.0)             (167.1)
Nonoperating expense (income)                                                    17.4                  7.1            (2,341.6)
Restructuring charge (adjustment)                                                   -                    -                (6.8)
Reorganization charges, net                                                         -                    -             1,596.8
Depreciation and amortization                                                   167.3                 59.5               126.3
                                                                   --------------------  -------------------  ------------------
                                                                        $        27.8         $        8.3        $       (8.7)
                                                                   ====================  ===================  ==================

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.

</TABLE>


<PAGE>

MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)



<TABLE>
<CAPTION>
                                                                  JUNE 30, 2003            DECEMBER 31, 2002
                                                               ---------------------      ---------------------
                                                                   (UNAUDITED)

ASSETS

CURRENT ASSETS

<S>                                                                    <C>                       <C>
    Cash and cash equivalents                                          $       83.0              $       170.6
    Trade receivables, net                                                     82.2                       93.1
    Prepaid expense and other                                                  24.0                       26.2
    Assets held for sale                                                       10.4                       11.1
                                                               ---------------------      ---------------------
    Total Current Assets                                                      199.6                      301.0
                                                               ---------------------      ---------------------

NON-CURRENT ASSETS

    Property and equipment, net                                             1,107.0                    1,203.1
    Goodwill and other intangibles, net                                       462.8                      472.3
    Other non-current assets                                                   20.5                       23.9
                                                               ---------------------      ---------------------
    TOTAL NON-CURRENT ASSETS                                                1,590.3                    1,699.3
                                                               ---------------------      ---------------------

TOTAL ASSETS                                                         $      1,789.9             $      2,000.3
                                                               =====================      =====================

LIABILITIES AND EQUITY

CURRENT LIABILITIES

    Current maturities of long-term debt                               $       24.4               $       15.0
    Accounts payable                                                           61.1                       71.1
    Deferred revenue, current portion                                           9.2                        9.8
    Other current liabilities                                                 140.4                      176.4
    Liabilities related to discontinued operations                              1.0                        6.3
                                                               ---------------------      ---------------------
    TOTAL CURRENT LIABILITIES                                                 236.1                      278.6
                                                               ---------------------      ---------------------

LONG-TERM LIABILITIES

    Long-term debt, excluding current maturities                              693.1                      704.9
    Deferred revenue less current portion                                      12.4                       13.5
    Other long-term liabilities                                                56.7                       54.9
                                                               ---------------------      ---------------------
    TOTAL LONG-TERM LIABILITIES                                               762.2                      773.3
                                                               ---------------------      ---------------------

REDEEMABLE CONVERTIBLE PREFERRED STOCK                                        166.6                      172.6

STOCKHOLDERS' EQUITY                                                          625.0                      775.8
                                                               ---------------------      ---------------------

TOTAL LIABILITIES AND EQUITY                                         $      1,789.9             $      2,000.3
                                                               =====================      =====================
</TABLE>


<PAGE>

MCLEODUSA INCORPORATED AND SUBSIDIARIES
COMPARISON OF SELECTED COMPETITIVE TELCO OPERATIONS

(In millions)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                       Q2 2003           YTD 2003         Q2 2002         YTD 2002
-----------------------------------------------------------------------------------------------------------------------

REVENUES

<S>                                                      <C>               <C>              <C>            <C>
    As reported                                          $   222.6         $   448.5        $   254.5      $   518.6
    Non-core business dispositions*                           ----              ----             ----           (4.7)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco revenues                               $   222.6         $   448.5        $   254.5      $   513.9

-----------------------------------------------------------------------------------------------------------------------

COST OF GOODS SOLD

    As reported                                          $   128.1         $   265.5        $   151.5      $   330.6
    Non-core business dispositions*                           ----              ----             ----           (5.9)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco cost of service                        $   128.1         $   265.5        $   151.5      $   324.7

-----------------------------------------------------------------------------------------------------------------------

MARGIN

    As reported                                          $    94.5         $   183.0        $   103.0      $   188.0
    Non-core business dispositions*                           ----              ----             ----            1.2
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco margin                                 $    94.5         $   183.0        $   103.0      $   189.2
                                          % Revenue          42.4%             40.8%            40.5%           36.8%

-----------------------------------------------------------------------------------------------------------------------

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

    As reported                                          $    73.5         $   155.2        $    97.0      $   188.4
    Non-core business dispositions*                           ----              ----             ----           (0.3)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco SG&A expenses                          $    73.5         $   155.2        $    97.0      $   188.1

-----------------------------------------------------------------------------------------------------------------------

DEPRECIATION & AMORTIZATION

    As reported                                          $    85.1         $   167.3        $    76.9      $   185.8
    Non-core business dispositions*                           ----              ----             ----           (0.9)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco depreciation and amortization          $    85.1         $   167.3        $    76.9      $   184.9

-----------------------------------------------------------------------------------------------------------------------

EBITDA1

    As reported                                          $    21.0         $    27.8        $     6.0       $   (0.4)
    Non-core business dispositions*                           ----              ----             ----            1.5
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco EBITDA(1)                              $    21.0         $    27.8        $     6.0       $    1.1
                                          % Revenue            9.4%              6.2%             2.4%           0.2%

-----------------------------------------------------------------------------------------------------------------------

*  Non-core business dispositions include Splitrock and Devise

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.


</TABLE>



<PAGE>

MCLEODUSA INCORPORATED AND SUBSIDIARIES

SELECTED TELECOMMUNICATIONS STATISTICAL DATA

<TABLE>
<CAPTION>
                                                        ------------------     -------------------     -------------------
                                                             6/30/02                3/31/03                 6/30/03
                                                        ------------------     -------------------     -------------------

<S>                                                                 <C>                     <C>                     <C>
Active central offices                                              1,779                   1,684                   1,722

Collocations                                                          507                     567                     584

Switches owned

    CO / LD                                                            55                      46                      45
    ATM / Frame Relay                                                  43                      38                      38

DSLAMs installed                                                      525                     433                     435

Total Competitive:

    Customers                                                     461,951                 424,683                 414,767
    Access Units / Customer                                           2.7                     2.8                     2.7

    Revenue per Customer / Month

        Local                                                 $    103.46             $    112.66             $    112.10
        Long distance                                               44.94                   38.14                   36.92
        Private line & data                                         25.34                   27.03                   26.82
                                                        ------------------     -------------------     -------------------
        Total                                                 $    173.74             $    177.83             $    175.84
                                                        ==================     ===================     ===================

    Platform Distribution

        Resale                                                        21%                     13%                      7%
        UNE-M/P                                                       37%                     31%                     35%
        UNE-L                                                         42%                     56%                     58%
                                                        ------------------     -------------------     -------------------
        Total                                                        100%                    100%                    100%
                                                        ==================     ===================     ===================
</TABLE>
[{"type": "8-K", "sequence": "1", "filename": "chi406453.txt", "secsgml_size_bytes": 42543}]
{"company-data": {"conformed-name": "MCLEODUSA INC", "cik": "0000919943", "assigned-sic": "4812", "irs-number": "421407240", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-20763", "film-number": "03797444"}, "business-address": {"street1": "6400 C ST SW", "street2": "PO BOX 3177", "city": "CEDAR RAPIDS", "state": "IA", "zip": "52406", "phone": "3193640000"}, "mail-address": {"street1": "6400 C ST SW", "street2": "PO BOX 3177", "city": "CEDAR RAPIDS", "state": "IA", "zip": "52406"}, "former-company": {"former-conformed-name": "MCLEOD INC", "date-changed": "19960403"}}
SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                   FORM 8-K

                                CURRENT REPORT

                    PURSUANT TO SECTION 13 OR 15(D) OF THE

                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of Earliest Event Reported): July 23, 2003

                                ______________

                            MCLEODUSA INCORPORATED

                                ______________

              (Exact Name of Registrant as Specified in Charter)

            DELAWARE                    0-20763           42-1407240
----------------------------------   -------------  ---------------------
(State or Other Jurisdiction of       (Commission       (IRS Employer
         Incorporation)               File Number)    Identification No.)

                          McLeodUSA Technology Park,
                               6400 C Street SW,
                                P.O. Box 3177,
                          Cedar Rapids, IA 52406-3177
                  __________________________________________
              (Address of Principal Executive Offices) (Zip Code)

      Registrant's telephone number, including area code: (319) 364-0000
                                ______________

ITEM 9.       REGULATION FD DISCLOSURE.

The information contained in this Item 9 of this Current Report is being
furnished pursuant to "Item 12. Results of Operations and Financial Condition"
of Form 8-K. The information in this Current Report, including the attached
Exhibit, shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be deemed
incorporated by reference into any filing under the Securities Act of 1933,
except as shall be expressly set forth by specific reference in such filing.

On July 23, 2003, we announced our financial and operating results for the
fiscal quarter ended June 30, 2003, and certain other information, in a press
release, a copy of which is attached hereto as Exhibit 99.1.

                                   SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: July 23, 2003                    McLEODUSA INCORPORATED

                                       By: /s/ G. Kenneth Burckhardt
                                       ------------------------------
                                       G. Kenneth Burckhardt
                                       Chief Financial Officer

                                 EXHIBIT INDEX

Exhibit
  No.                        Exhibits

99.1                         Press Release, dated July 23, 2003
Exhibit 99.1

[GRAPHIC OMITTED]

                 McLeodUSA Reports Second Quarter 2003 Results

o     EBITDA OF $21 MILLION MARKS FIFTH CONSECUTIVE POSITIVE EBITDA QUARTER

o     ON-SWITCH PLATFORM MIX INCREASES TO 58% FROM 42% IN 2Q '02

o     CUSTOMER TURNOVER DECREASES TO 2.4% FROM 3.1% IN 2Q '02

CEDAR RAPIDS, IOWA - JULY 23, 2003 - McLeodUSA Incorporated (Nasdaq: MCLD),
one of the nation's largest independent, competitive telecommunications
services providers, today reported financial and operating results for the
quarter ended June 30, 2003.

Total revenues for the quarter were $222.6 million and gross margin was $94.5
million. SG&A expenses for the quarter were $73.5 million, including a $7.9
million recovery of the reserve for WorldCom pre-petition receivables that was
recorded in the second quarter of 2002. EBITDA(1) (earnings before interest,
taxes, depreciation and amortization) for the competitive telecommunications
("Telco") business for the period was $21.0 million including the receivables
recovery. Reported net loss for the quarter was $(72.8) million, or a loss per
common share of $(0.27).

"In the second quarter, we remained focused on the execution of our strategic
plan. Given the sustained economic challenges in our marketplace, we were
particularly pleased to add Walgreens to our customer list and to be approved
by General Motors Dealer Equipment to provide critical data services for GM
dealers across our 25 state-footprint," said Chris A. Davis, Chairman and
Chief Executive Officer. "In the quarter, we also saw the benefits of the
significant operational improvements we continue to make, resulting in gross
margin of 42.4% of revenue compared with 39.2% in the first quarter of this
year. We are very pleased to have again achieved positive Telco EBITDA for the
fifth consecutive quarter."

For the quarter ended June 30, 2003, total Telco revenues of $222.6 million
compared to $225.9 million in the first quarter of 2003 and $254.5 million in
the second quarter of 2002. Second quarter revenues include the impact of the
most recent reduction in access rates being phased in under a June 2001 FCC
order. Excluding this access rate reduction, second quarter revenues were
essentially flat with the first quarter. The full impact of this most recent
access rate reduction will affect the Company's third quarter results by
reducing revenue approximately $10 million. Compared with the second
quarter of 2002, revenue for second quarter 2003 was down $31.9 million
primarily driven by fewer customers, including the Company's planned efforts
to eliminate non-profitable customers. Year over year, local service, private
line and data revenues per customer increased, but were partially offset by
lower average long distance revenue per customer.

---------
(1)EBITDA is a non-GAAP industry convention or standard measure portraying cash
operating earnings. It is included in the Company's discussion of its 2003 and
2002 financial results because the Company believes it is a meaningful measure
of actual operating performance. EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals and results of
discontinued operations. Use of EBITDA is not intended to replace measures of
financial performance that are reported in accordance with U.S. generally
accepted accounting principles.

Gross margin for the second quarter 2003 was $94.5 million compared to $88.5
million in the first quarter of 2003 and $103.0 million in the second quarter
of 2002. Gross margin as a percent of revenue improved to 42.4% versus 39.2%
in the first quarter of 2003 and 40.5% in the second quarter of 2002. The
improvement in gross margin reflects the ongoing benefit of network cost
reductions, continued migration of customers to the McLeodUSA network and the
elimination of non-profitable customers versus the 2002 results.

Customer platform mix at the end of the second quarter 2003 was 58% UNE-L, 7%
resale and 35% UNE-M/P versus 56%, 13% and 31%, respectively, at the end of
the first quarter of 2003 and 42%, 21% and 37%, respectively, at the end of
the second quarter 2002 reflecting continued migration of customers from
resale to higher margin platforms, as well as installation of new customers
on-switch. Customer turnover in the second quarter was essentially flat with
first quarter of 2003 at 2.4% and down from 3.1% in the second quarter of
2002.

SG&A expenses of $73.5 million in the second quarter of 2003 include a $7.9
million recovery against $8.3 million of WorldCom pre-petition receivables
that were reserved in the second quarter of 2002. An agreement was reached
with WorldCom in June of 2003 to offset pre-petition receivables against
amounts the Company owed WorldCom for pre-petition services. Excluding this
reserve and recovery second quarter 2003 SG&A expenses were $81.4 million
compared to $81.7 million in the first quarter of 2003 and $88.7 million in
the second quarter of 2002. Telco EBITDA in the second quarter of 2003 was
$21.0 million (including the $7.9 million recovery) versus $6.8 million in the
first quarter of 2003 and $6.0 million in the second quarter of 2002
(including the $8.3 million reserve).

Total Telco revenues, excluding discontinued operations, for the six months
ended June 30, 2003 were $448.5 million versus $513.9 million in the
comparable 2002 period. Telco gross margin for the six-month period ending
June 30, 2003 was $183.0 million in 2003 versus $189.2 million in 2002. Gross
margin as a percent of revenue for the six-month period improved to 40.8% from
36.8% in 2002. Telco EBITDA was $27.8 million for the six month 2003 period
versus $1.1 million in 2002.

The Company ended the quarter with $83.0 million of cash on hand. Total
capital expenditures for the second quarter of 2003 were $23.1 million and for
the six-month period ending June 30, 2003 were $36.9 million as the Company
continued to manage volume related capital expenditures consistent with
realized revenue. Network quality, process improvement and cost reduction
capex remained essentially on plan. The Company is currently re-evaluating the
timing of its $350 million 2003-2004 capex plan.

Other highlights in the quarter included:

|X|      Signed an agreement with Walgreen Co., the nation's largest drugstore
         chain, to be their primary local telecommunications services provider
         to 538 Walgreen's stores with nearly 5,000 business lines. The
         installation for all 538 locations was completed in approximately
         three weeks.

|X|      Announced General Motors Dealer Equipment has approved McLeodUSA to
         provide critical data services for General Motors dealers across the
         25 states where McLeodUSA offers services.

|X|      Announced the launch of Preferred Advantage Integrated Access, which
         combines voice, data and Internet services over a single, reliable
         high-speed connection. McLeodUSA customers will now have the
         opportunity to add single channel increments of additional local
         service and high-speed Internet access at a single price per voice or
         data channel.

|X|      Announced a substantially strengthened joint marketing program with
         Yellow Book USA. McLeodUSA's new corporate branding will now be
         included in the top advertising position on 30 million Yellow Book
         phone directory covers, and the Company's new branding and Preferred
         AdvantageSM messaging will appear in key headings inside the
         directories and on Yellow Book's Website.

|X|      Completed tariff approval in all eight states for McLeodUSA to expand
         its residential Preferred Advantage local, long distance and Internet
         services. These states include Washington, Texas, Utah, Oregon,
         Missouri, Arizona, New Mexico and Ohio.

|X|      Launched "Centers of Excellence," an innovative Customer Care program
         and service model, designed to provide a more personalized and
         streamlined customer service experience.

|X|      The Company regained compliance with the minimum bid price listing
         requirements under the Nasdaq Marketplace Rules to continue to trade
         its common stock on The Nasdaq SmallCap Market(R).

|X|      McLeodUSA was named to the Russell 3000(R) Index effective July 1,
         2003. The Index contains the largest 3,000 incorporated companies in
         the United States and its territories.

|X|      McLeodUSA Chairman and CEO, Chris A. Davis was awarded a national
         2003 StevieTM Award for "Best Executive" in the inaugural American
         Business AwardsSM ceremony held April 30, 2003 in New York City. The
         American Business Awards are the first national, all-encompassing
         business awards program honoring great performances in the workplace.

|X|      Added two experienced executives to the Company's Leadership Team:
         Patrice Carroll as Group Vice President to lead the development and
         implementation of the Company's strategic business initiatives; and
         Kurt Langel as Vice President to lead the Human Resources team and
         the Company's ongoing employee StarQuality Training and Certification
         program.

Conference Call

McLeodUSA will host a conference call on Wednesday, July 23, 2003, at 10 a.m.
Eastern Time to discuss second quarter results and the information contained
in this release. The call may be accessed at 888-271-9098 (U.S.) or
706-634-6027 (International). A replay will be available approximately 2 hours
after completion of the call at 800-642-1687 (U.S.) or 706-645-9291
(International), Conference ID No. 1715163. The audio replay will be available
through midnight ET on Wednesday, July 30, 2003. The call will also be Webcast
live and available via replay at:
http://www.mcleodusa.com/html/ir/streamingmedia.php3

                                     # # #

About McLeodUSA

McLeodUSA provides integrated communications services, including local
services, in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The
Company is a facilities-based telecommunications provider with, as of June 30,
2003, 38 ATM switches, 45 voice switches, 584 collocations, 435 DSLAMs and
3,710 employees. As of April 16, 2002, Forstmann Little & Co. became a 58%
shareholder in the Company. Visit the Company's Web site at www.mcleodusa.com.

Some of the statements in this press release include statements about our
future expectations. Statements that are not historical facts are
"forward-looking statements" for the purpose of the safe harbor provided by
Section 21E of the Exchange Act and Section 27A of the Securities Act. Such
statements may include projections of financial and operational results and
goals, including revenue, EBITDA, profitability, savings and cash. These
forward-looking statements are subject to known as well as unknown risks and
uncertainties that may cause actual results to differ materially from our
expectations. Our expectations are based on various factors and assumptions
and reflect only our predictions. Factors that could cause actual results to
differ materially from the forward-looking statement include technological,
regulatory, public policy or other developments in our industry, availability
and adequacy of capital resources, current and future economic conditions, the
existence of strategic alliances, our ability to generate cash, our ability to
implement process and network improvements, our ability to attract and retain
customers, our ability to migrate traffic to appropriate platforms and changes
in the competitive climate in which we operate. These and other risks are
described in more detail in our most recent Annual Report on Form 10-K and
Form 10-K/A both filed with the SEC. The Company undertakes no obligation to
update publicly any forward-looking statements, whether as a result of future
events, new information or otherwise.

Contact:

McLeodUSA Incorporated, Cedar Rapids, IA

Investor Contact: Bryce Nemitz

Press Contact:    Bruce Tiemann

Phone:  (319) 790-7800

mcleodusa_ir@mcleodusa.com
MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share data)
(UNAUDITED)
REORGANIZED           REORGANIZED         PREDECESSOR
                                                                      MCLEODUSA             MCLEODUSA           MCLEODUSA

                                                                 ---------------------  ------------------ ---------------------
                                                                  THREE MONTHS ENDED     APRIL 17, 2002       APRIL 1, 2002
                                                                    JUNE 30, 2003       TO JUNE 30, 2002    TO APRIL 16, 2002
                                                                 ---------------------  ------------------ ---------------------
Revenue                                                                $       222.6        $      207.2         $        47.3

Operating expenses:

    Cost of service (exclusive of depreciation shown
        separately below)                                                      128.1               119.4                  32.1
    Selling, general and administrative                                         73.5                79.5                  17.5
    Depreciation and amortization                                               85.1                59.5                  17.4
    Reorganization charges, net                                                    -                   -               1,539.6
    Restructuring charge (adjustment)                                              -                   -                  (6.8)
                                                                 ---------------------  ------------------ ---------------------
        TOTAL OPERATING EXPENSES                                               286.7               258.4               1,599.8
                                                                 ---------------------  ------------------ ---------------------
        OPERATING LOSS                                                         (64.1)              (51.2)             (1,552.5)
                                                                 ---------------------  ------------------ ---------------------

Nonoperating (expense) income:

    Interest expense, net of amounts capitalized                                (8.3)               (8.2)                 (1.8)
    Other (expense) income                                                      (0.4)                1.1                  (1.0)
    Gain on the cancellation of debt                                               -                   -               2,372.8
                                                                 ---------------------  ------------------ ---------------------
        TOTAL NONOPERATING (EXPENSE) INCOME                                     (8.7)               (7.1)              2,370.0
                                                                 ---------------------  ------------------ ---------------------

        (LOSS) INCOME FROM CONTINUING OPERATIONS                               (72.8)              (58.3)                817.5

Discontinued operations:

    Income from discontinued operations (including net (losses) gains on
       disposals of ($2.9) and $151.2 for the periods April 17, to

       June 30, and April 1 to April 16, 2002, respectively.)                      -                13.0                 152.6
                                                                 ---------------------  ------------------ ---------------------
        NET (LOSS) INCOME                                             $        (72.8)       $      (45.3)        $       970.1
                                                                 ---------------------  ------------------ ---------------------
Preferred stock dividend                                                        (1.2)               (1.1)                    -
                                                                 ---------------------  ------------------ ---------------------
        NET (LOSS) INCOME APPLICABLE TO COMMON SHARES                 $        (74.0)       $      (46.4)        $       970.1
                                                                 =====================  ================== =====================

Basic and diluted (loss) income per common share:

    (Loss) income from continuing operations                          $        (0.27)       $      (0.22)        $        1.30
    Discontinued operations                                                        -                0.05                  0.25
                                                                 ---------------------  ------------------ ---------------------
    (Loss) income per common share                                    $        (0.27)       $      (0.17)        $        1.55
                                                                 =====================  ================== =====================
Weighted average common shares outstanding                                     276.9               276.3                 627.7
                                                                 =====================  ================== =====================

RECONCILIATION OF EBITDA(1):

Net (loss) income                                                     $        (72.8)       $      (45.3)        $       970.1
Discontinued operations                                                            -               (13.0)               (152.6)
Nonoperating expense (income)                                                    8.7                 7.1              (2,370.0)
Restructuring charge (adjustment)                                                  -                   -                  (6.8)
Reorganization charges, net                                                        -                   -               1,539.6
Depreciation and amortization                                                   85.1                59.5                  17.4
                                                                 ---------------------  ------------------ ---------------------
                                                                       $        21.0         $       8.3         $        (2.3)
                                                                 =====================  ================== =====================

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.
MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share data)
(UNAUDITED)
REORGANIZED          REORGANIZED          PREDECESSOR
                                                                        MCLEODUSA            MCLEODUSA            MCLEODUSA

                                                                   --------------------  -------------------  ------------------
                                                                    SIX MONTHS ENDED       APRIL 17, 2002      JANUARY 1, 2002
                                                                      JUNE 30, 2003       TO JUNE 30, 2002    TO APRIL 16, 2002
                                                                   --------------------  -------------------  ------------------
Revenue                                                                 $       448.5         $      207.2        $      311.4

Operating expenses:

    Cost of service (exclusive of depreciation shown
        separately below)                                                       265.5                119.4               211.2
    Selling, general and administrative                                         155.2                 79.5               108.9
    Depreciation and amortization                                               167.3                 59.5               126.3
    Reorganization charges, net                                                     -                    -             1,596.8
    Restructuring charge (adjustment)                                               -                    -                (6.8)
                                                                   --------------------  -------------------  ------------------
        TOTAL OPERATING EXPENSES                                                588.0                258.4             2,036.4
                                                                   --------------------  -------------------  ------------------
        OPERATING LOSS                                                         (139.5)               (51.2)           (1,725.0)
                                                                   --------------------  -------------------  ------------------

Nonoperating (expense) income:

    Interest expense, net of amounts capitalized                                (17.0)                (8.2)              (33.2)
    Other (expense) income                                                       (0.4)                 1.1                 2.0
    Gain on the cancellation of debt                                                -                    -             2,372.8
                                                                   --------------------  -------------------  ------------------
        TOTAL NONOPERATING (EXPENSE) INCOME                                     (17.4)                (7.1)            2,341.6
                                                                   --------------------  -------------------  ------------------

        (LOSS) INCOME FROM CONTINUING OPERATIONS                               (156.9)               (58.3)              616.6

Discontinued operations:

    Income from discontinued operations (including net gain on
     disposals of $148.3 for the period January 1 to April 16, 2002).               -                 13.0               167.1
                                                                   --------------------  -------------------  ------------------
        NET (LOSS) INCOME                                              $       (156.9)        $      (45.3)       $      783.7
                                                                   --------------------  -------------------  ------------------
Preferred stock dividend                                                         (2.4)                (1.1)               (4.8)
                                                                   --------------------  -------------------  ------------------
        NET (LOSS) INCOME APPLICABLE TO COMMON SHARES                  $       (159.3)        $      (46.4)       $      778.9
                                                                   ====================  ===================  ==================

Basic and diluted (loss) income per common share:

    (Loss) income from continuing operations                           $        (0.58)        $      (0.22)       $       0.97
    Discontinued operations                                                         -                 0.05                0.27
                                                                   --------------------  -------------------  ------------------
    (Loss) income per common share                                     $        (0.58)        $      (0.17)       $       1.24
                                                                   ====================  ===================  ==================
Weighted average common shares outstanding                                      276.6                276.3               627.7
                                                                   ====================  ===================  ==================

RECONCILIATION OF EBITDA(1):

Net (loss) income                                                      $       (156.9)        $      (45.3)       $      783.7
Discontinued operations                                                             -                (13.0)             (167.1)
Nonoperating expense (income)                                                    17.4                  7.1            (2,341.6)
Restructuring charge (adjustment)                                                   -                    -                (6.8)
Reorganization charges, net                                                         -                    -             1,596.8
Depreciation and amortization                                                   167.3                 59.5               126.3
                                                                   --------------------  -------------------  ------------------
                                                                        $        27.8         $        8.3        $       (8.7)
                                                                   ====================  ===================  ==================

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.
MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)
JUNE 30, 2003            DECEMBER 31, 2002
                                                               ---------------------      ---------------------
                                                                   (UNAUDITED)

ASSETS

CURRENT ASSETS
Cash and cash equivalents                                          $       83.0              $       170.6
    Trade receivables, net                                                     82.2                       93.1
    Prepaid expense and other                                                  24.0                       26.2
    Assets held for sale                                                       10.4                       11.1
                                                               ---------------------      ---------------------
    Total Current Assets                                                      199.6                      301.0
                                                               ---------------------      ---------------------

NON-CURRENT ASSETS

    Property and equipment, net                                             1,107.0                    1,203.1
    Goodwill and other intangibles, net                                       462.8                      472.3
    Other non-current assets                                                   20.5                       23.9
                                                               ---------------------      ---------------------
    TOTAL NON-CURRENT ASSETS                                                1,590.3                    1,699.3
                                                               ---------------------      ---------------------

TOTAL ASSETS                                                         $      1,789.9             $      2,000.3
                                                               =====================      =====================

LIABILITIES AND EQUITY

CURRENT LIABILITIES

    Current maturities of long-term debt                               $       24.4               $       15.0
    Accounts payable                                                           61.1                       71.1
    Deferred revenue, current portion                                           9.2                        9.8
    Other current liabilities                                                 140.4                      176.4
    Liabilities related to discontinued operations                              1.0                        6.3
                                                               ---------------------      ---------------------
    TOTAL CURRENT LIABILITIES                                                 236.1                      278.6
                                                               ---------------------      ---------------------

LONG-TERM LIABILITIES

    Long-term debt, excluding current maturities                              693.1                      704.9
    Deferred revenue less current portion                                      12.4                       13.5
    Other long-term liabilities                                                56.7                       54.9
                                                               ---------------------      ---------------------
    TOTAL LONG-TERM LIABILITIES                                               762.2                      773.3
                                                               ---------------------      ---------------------

REDEEMABLE CONVERTIBLE PREFERRED STOCK                                        166.6                      172.6

STOCKHOLDERS' EQUITY                                                          625.0                      775.8
                                                               ---------------------      ---------------------

TOTAL LIABILITIES AND EQUITY                                         $      1,789.9             $      2,000.3
                                                               =====================      =====================
MCLEODUSA INCORPORATED AND SUBSIDIARIES
COMPARISON OF SELECTED COMPETITIVE TELCO OPERATIONS

(In millions)
(UNAUDITED)
Q2 2003           YTD 2003         Q2 2002         YTD 2002
-----------------------------------------------------------------------------------------------------------------------

REVENUES
As reported                                          $   222.6         $   448.5        $   254.5      $   518.6
    Non-core business dispositions*                           ----              ----             ----           (4.7)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco revenues                               $   222.6         $   448.5        $   254.5      $   513.9

-----------------------------------------------------------------------------------------------------------------------

COST OF GOODS SOLD

    As reported                                          $   128.1         $   265.5        $   151.5      $   330.6
    Non-core business dispositions*                           ----              ----             ----           (5.9)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco cost of service                        $   128.1         $   265.5        $   151.5      $   324.7

-----------------------------------------------------------------------------------------------------------------------

MARGIN

    As reported                                          $    94.5         $   183.0        $   103.0      $   188.0
    Non-core business dispositions*                           ----              ----             ----            1.2
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco margin                                 $    94.5         $   183.0        $   103.0      $   189.2
                                          % Revenue          42.4%             40.8%            40.5%           36.8%

-----------------------------------------------------------------------------------------------------------------------

SELLING, GENERAL & ADMINISTRATIVE EXPENSES

    As reported                                          $    73.5         $   155.2        $    97.0      $   188.4
    Non-core business dispositions*                           ----              ----             ----           (0.3)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco SG&A expenses                          $    73.5         $   155.2        $    97.0      $   188.1

-----------------------------------------------------------------------------------------------------------------------

DEPRECIATION & AMORTIZATION

    As reported                                          $    85.1         $   167.3        $    76.9      $   185.8
    Non-core business dispositions*                           ----              ----             ----           (0.9)
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco depreciation and amortization          $    85.1         $   167.3        $    76.9      $   184.9

-----------------------------------------------------------------------------------------------------------------------

EBITDA1

    As reported                                          $    21.0         $    27.8        $     6.0       $   (0.4)
    Non-core business dispositions*                           ----              ----             ----            1.5
                                                    ---------------   ---------------  --------------- ----------------
    Ongoing Telco EBITDA(1)                              $    21.0         $    27.8        $     6.0       $    1.1
                                          % Revenue            9.4%              6.2%             2.4%           0.2%

-----------------------------------------------------------------------------------------------------------------------

*  Non-core business dispositions include Splitrock and Devise

-----------------------

(1) Earnings before interest, taxes, depreciation and amortization ("EBITDA") is a non-GAAP industry convention or standard measure
portraying cash operating earnings.  It is included in the Company's discussion of its 2003 and 2002 financial results because the
Company believes that it is a meaningful measure of actual operating performance.  EBITDA excludes reorganization charges,
restructuring adjustments, gains and losses on disposals, and results of discontinued operations.  Use of EBITDA is not intended to
replace measures of financial performance that are reported in accordance with U.S. generally accepted accounting principles.
MCLEODUSA INCORPORATED AND SUBSIDIARIES

SELECTED TELECOMMUNICATIONS STATISTICAL DATA
------------------     -------------------     -------------------
                                                             6/30/02                3/31/03                 6/30/03
                                                        ------------------     -------------------     -------------------
Active central offices                                              1,779                   1,684                   1,722

Collocations                                                          507                     567                     584

Switches owned

    CO / LD                                                            55                      46                      45
    ATM / Frame Relay                                                  43                      38                      38

DSLAMs installed                                                      525                     433                     435

Total Competitive:

    Customers                                                     461,951                 424,683                 414,767
    Access Units / Customer                                           2.7                     2.8                     2.7

    Revenue per Customer / Month

        Local                                                 $    103.46             $    112.66             $    112.10
        Long distance                                               44.94                   38.14                   36.92
        Private line & data                                         25.34                   27.03                   26.82
                                                        ------------------     -------------------     -------------------
        Total                                                 $    173.74             $    177.83             $    175.84
                                                        ==================     ===================     ===================

    Platform Distribution

        Resale                                                        21%                     13%                      7%
        UNE-M/P                                                       37%                     31%                     35%
        UNE-L                                                         42%                     56%                     58%
                                                        ------------------     -------------------     -------------------
        Total                                                        100%                    100%                    100%
                                                        ==================     ===================     ===================