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                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549






                                    FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
    ACT OF 1934 
                  For the quarterly period ended September 30, 1997

                                       OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT 
      OF 1934
                  For the transition period from           to

                         Commission file number 0-21373

                           ProMedCo Management Company

             (Exact name of Registrant as specified in its charter)



           Delaware                                      75-2529809
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                   Identification Number)


 801 Cherry Street, Suite 1450
        Fort Worth, Texas                                  76102
(Address of principal executive offices)                 (Zip Code)

                                    (817) 335-5035
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                  YES  ( X )                      NO (    )

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                                                          Outstanding at
        Class of Common Stock                             October 31, 1997
          $.01 par value                                  10,062,095 shares


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

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<PAGE>



               PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES

                                  INDEX


                                                                           Page
                                                                            No.

Part I. Financial Information

   Item 1. Financial Statements

     Condensed Consolidated Balance Sheets
      September 30, 1997 and December 31, 1996                              2

     Condensed Consolidated Statements of Operations
      Three Months and Nine Months Ended September 30, 1997 and 1996        3

     Condensed Consolidated Statements of Cash Flows
       Nine Months Ended September 30, 1997 and 1996                        4

     Notes to Condensed Consolidated Financial Statements                   5

   Item 2. Management's Discussion and Analysis of Financial 
     Condition and Results of Operations                                    11

Part II. Other Information

   Item 2. Changes in Securities and Use of Proceeds                        16

   Item 6. Exhibits and Reports on Form 8-K                                 16

Signatures                                                                  17




<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                           September 30, 1997       December 31,
                                                                               (Unaudited)              1996
                                     ASSETS
<S>                                                                       <C>                    <C>
Current assets:
         Cash and cash equivalents                                        $        17,098,313    $        1,633,534
         Accounts receivable, net                                                  13,807,217             6,227,228
         Management fees receivable                                                   161,105             1,266,598
         Due from affiliated physician groups                                       2,206,265               660,278
         Prepaid expenses and other current assets                                  3,501,605               742,845
                                                                           ------------------    ------------------
                  Total current assets                                             36,774,505            10,530,483
                                                                           ------------------    ------------------

Property and equipment, net                                                         6,337,628             3,930,191
Intangible assets, net                                                             46,237,534            14,860,171
Other assets                                                                       16,332,234             1,238,929
                                                                           ------------------    ------------------
                  Total assets                                             $      105,681,901    $       30,559,774
                                                                           ==================    ==================


                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Accounts payable                                                  $        1,437,015    $        1,505,762
         Payable to affiliated physician groups                                     3,596,788             1,341,876
         Accrued salaries, wages and benefits                                       1,628,373             1,153,558
         Accrued expenses and other current liabilities                             2,757,731             2,353,381
         Current maturities of long-term debt                                       3,668,146             1,151,191
         Current maturities of obligations under capital leases                       137,180               589,438
         Deferred purchase price                                                    8,434,428               181,986
                                                                           ------------------    ------------------
                  Total current liabilities                                        21,659,661             8,277,192
                                                                           ------------------    ------------------

Long-term debt, net of current maturities                                          15,245,130             4,585,173
Obligations under capital leases, net of current maturities                           746,414             1,030,171
Convertible subordinated notes payable                                              1,800,274             1,800,274
Other long term liabilities                                                         1,716,481               393,575
                                                                           ------------------    ------------------
                  Total liabilities                                                41,167,960            16,086,385
                                                                           ------------------    ------------------

Series A redeemable convertible preferred stock                                        -                  2,957,641
Redeemable common stock                                                                -                    991,776
Stockholders' equity:
         Class B Common Stock                                                          -                     12,262
         Common stock                                                                 100,621                31,871
         Additional paid-in capital                                                53,400,407            11,987,480
         Common stock to be issued                                                 11,878,044             2,303,212
         Stockholder notes receivable                                                (369,665)             (151,306)
         Accumulated deficit                                                         (495,466)           (3,659,547)
                                                                           -------------------   ------------------
                  Total stockholders' equity                                       64,513,941            10,523,972
                                                                           ------------------    ------------------
                  Total liabilities and stockholders' equity               $      105,681,901    $       30,559,774
                                                                           ==================    ==================

</TABLE>

   The accompanying notes are an integral part of these financial statements.

<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                Three Months Ended                  Nine Months Ended
                                                                   September 30,                      September 30,
                                                               1997             1996              1997             1996
<S>                                                       <C>             <C>                <C>             <C>
Physician groups revenue, net                             $   29,302,573  $   12,672,590     $   75,760,198  $   29,805,433
Less: amounts retained by physician groups                    11,496,972       5,332,128         31,037,320      13,472,676
                                                          --------------  --------------     --------------  --------------
Management fee revenue                                        17,805,601       7,340,462         44,722,878      16,332,757
                                                          --------------  --------------     --------------  --------------

Operating expenses:
         Clinic salaries and benefits                          6,795,818       3,301,399         17,362,170       7,526,661
         Clinic rent and lease expense                         1,620,677         727,252          4,129,602       1,688,280
         Clinic supplies                                       2,034,422         972,824          5,510,504       2,016,980
         Other clinic costs                                    2,826,303       1,631,434          8,225,318       3,921,005
         General corporate expenses                            1,113,978         643,704          2,756,283       1,901,399
         Depreciation and amortization                           923,093         204,369          1,961,520         323,001
         Interest expense                                        110,468          59,024            227,565          72,470
         Merger costs                                             -              139,501             -              139,501
                                                          -------------   --------------     -------------   --------------
                                                              15,424,759       7,679,507         40,172,962      17,589,297
                                                          --------------  --------------     --------------  --------------

Income (loss) before provision for income taxes                2,380,842        (339,045)         4,549,916      (1,256,540)

Provision for income taxes                                       778,494          -               1,385,835          -
                                                          --------------  --------------     --------------  --------------

Net income (loss)                                         $    1,602,348  $     (339,045)    $    3,164,081  $   (1,256,540)
                                                          ==============  ==============     ==============  ==============

Earnings (loss) per share                                 $         0.11  $        (0.04)    $         0.23  $        (0.15)
                                                          ==============  ==============     ==============  ==============

Weighted average number of common shares outstanding          15,060,419       8,190,404         13,939,114       8,198,698
                                                          ==============  ==============     ==============  ==============
</TABLE>















     The accompanying notes are an integral part of these financial statements.

<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                         Nine Months Ended
                                                                                           September 30,
                                                                                     1997                 1996
<S>                                                                            <C>                 <C>
Cash flows from operating activities:
     Net income (loss)                                                          $    3,164,081       $   (1,256,540)
     Adjustments to reconcile net income (loss) to net cash provided
         by (used in) operating activities (net of effects of
         purchase transactions):
         Depreciation and amortization                                               1,961,520              323,001
         Provision for deferred income taxes                                           109,046                -
         Net gain on disposal of fixed assets                                            -                 (229,251)
         Noncash compensation                                                            -                   14,750
         Changes in assets and liabilities:
              Accounts receivable                                                   (2,105,236)            (697,842)
              Management fees receivable                                              (726,767)            (965,782)
              Due from affiliated physician groups                                  (1,570,472)            (307,550)
              Other assets                                                          (3,519,524)            (218,007)
              Accounts payable                                                        (231,608)             400,114
              Payable to physician groups                                            2,254,912                -
              Accrued expenses and other current liabilities                           964,567            2,488,126
                                                                                --------------      ---------------
Net cash provided by (used in) operating activities                                    300,519             (448,981)
                                                                                --------------      ----------------

Cash flows from investing activities:
     Purchases of property and equipment                                            (1,451,354)            (512,777)
     Proceeds from sale of fixed assets                                                  -                  242,175
     Purchases of clinic assets, net of cash                                       (14,010,972)          (1,670,620)
                                                                                ---------------     ----------------
Net cash used in investing activities                                              (15,462,326)          (1,941,222)
                                                                                ---------------     ----------------

Cash flows from financing activities:
     Borrowings under long-term debt                                                 2,076,242            1,029,949
     Payments on long-term debt                                                     (2,640,048)            (265,908)
     Payments on capital lease obligations                                            (736,015)               -
     Payment of deferred financing costs                                                 -                 (565,137)
     Payment of deferred offering costs                                                  -                  (36,393)
     Proceeds from issuance of common stock, net                                    32,308,489              125,000
     Purchase and retirement of treasury stock                                        (382,082)               -
     Payment on stockholder notes receivable                                             -                   (3,636)
                                                                                --------------      ----------------
Net cash provided by financing activities                                           30,626,586              283,875
                                                                                --------------      ---------------

Increase (decrease) in cash and cash equivalents                                    15,464,779           (2,106,328)
Cash and cash equivalents, beginning of period                                       1,633,534            3,047,366
                                                                                --------------      ---------------
Cash and cash equivalents, end of period                                        $   17,098,313      $       941,038
                                                                                ==============      ===============

Supplemental disclosure of cash flow information
     Cash paid during the period for -
         Interest expense                                                       $      528,436      $        46,628
         Income taxes                                                           $      551,440      $           -
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>



                           PROMEDCO MANAGEMENT COMPANY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation/Principles of Consolidation

The  condensed  consolidated  financial  statements  included  herein  have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant  to such  SEC  rules  and  regulations.  Management  believes  that the
disclosures herein are adequate to prevent the information  presented from being
misleading.  The foregoing  financial  information,  not audited by  independent
public  accountants,  reflects,  in the opinion of the Company,  all adjustments
(which  included  only  normal  recurring  adjustments)  necessary  for  a  fair
presentation  of the financial  position and the results of  operations  for the
interim periods presented.  The results of operations for any interim period are
not necessarily indicative of the results of the operations for the entire year.
It is suggested that these condensed  consolidated  financial statements be read
in  conjunction  with the  financial  statements  and notes thereto for the year
ended  December 31, 1996,  included in the Company's  registration  statement on
Form S-1.

Certain  prior period  amounts have been  reclassified  to conform with the 1997
presentation.

In November 1996, the Company  entered into a definitive  agreement with Western
Medical Management Corp., Inc. ("Reno"), a physician  management company.  Under
the terms of the agreement,  Reno exchanged its common stock for common stock of
the Company upon consummation of the Company's initial public offering of common
stock in March 1997 (see Note 4). This  transaction  has been accounted for as a
pooling of interests,  as defined by APB No. 16,  "Business  Combinations."  The
accompanying financial statements are based on the assumption that the companies
were combined for the full periods presented and prior financial statements have
been restated to give effect to the combination.

Earnings Per Share

Primary  earnings per share ("EPS") of common stock have been computed using the
weighted  average  number of shares of common  stock  outstanding  and  dilutive
common stock  equivalents.  Fully diluted EPS is not  materially  different from
primary EPS.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standards ("SFAS") No. 128, "Earnings per Share," which will require
the Company to change its method of calculating EPS. SFAS No. 128 simplifies the
computation  of  EPS  by  replacing  the  presentation  of  primary  EPS  with a
presentation of basic EPS. Basic EPS is calculated by dividing income  available
to  common  stockholders  by  the  weighted  average  number  of  common  shares
outstanding during the period. Options, warrants, and other potentially dilutive
securities are excluded from the  calculation  of basic EPS.  Diluted EPS, which
has not changed significantly from the current calculation of fully diluted EPS,
includes the options,  warrants and other potentially  dilutive  securities that
are excluded from basic EPS. In accordance  with the provisions of SFAS No. 128,
the Company  will adopt this new  standard  beginning  in 1998.  Had the Company
adopted the new standard in 1997,  (early adoption is  specifically  prohibited)
basic EPS would be as follows:
<PAGE>


<TABLE>
<CAPTION>

                                                           Three Months                       Nine Months
                                                        Ended September 30,               Ended September 30,
                                                         1997            1996           1997              1996
<S>                                                <C>                <C>           <C>                <C>
Net income per share                               $         0.16     $    (0.07)   $       0.35       $     (0.26)
                                                   ==============     ==========    ============       ===========

Weighted average number of common 
      shares outstanding                               10,063,095      4,785,524       8,999,857         4,785,744
                                                   ==============     ==========    ============       ===========
</TABLE>

Management Fee Revenue

Management fee revenue represents physician groups revenue less amounts retained
by physician groups.  The amounts retained by physician groups (typically 85% of
the clinic operating income) represents amounts paid to the physicians  pursuant
to the service  agreements  between the Company and the physician groups.  Under
the service  agreements,  the Company  provides  each  physician  group with the
facilities and equipment used in its medical  practice,  assumes  responsibility
for the management of the operations of the practice,  and employs substantially
all of the non-physician personnel utilized by the group.

The Company's management fee revenues are dependent upon the operating income of
the physician  groups.  As discussed  previously,  the physician groups retain a
fixed percentage of physician group operating income.  Physician group operating
income is defined in the service agreements as the physician group's net medical
revenue  less  certain  contractually  agreed-upon  clinic  expenses,  including
non-physician clinic salaries and benefits, rent, insurance,  interest and other
direct clinic expenses. The amount of the physician group's revenue retained and
paid to the physician  group  primarily  consists of the cost of the  affiliated
services.  The remaining amount of the clinic  operating income  (typically 15%)
and an amount equal to 100% of the clinic  expenses are  reflected as management
fee  revenue  earned  by  the  Company.   Other  revenue  represents  management
consulting  and other  transitional  services  provided to physician  groups and
other companies.

Management fee revenue is detailed as follows:
<TABLE>
<CAPTION>

                                                           Three Months                       Nine Months
                                                        Ended September 30,               Ended September 30,
                                                         1997            1996           1997              1996
<S>                                                <C>             <C>              <C>             <C>
     Component based upon percentage of physician
         groups operating income                   $    2,028,877  $       940,964  $    5,477,174  $     2,377,531
     Other revenue                                      2,040,000           -            2,840,000           -
     Reimbursement of clinic expenses                  13,736,724        6,399,498      36,405,704       13,955,226
                                                   --------------  ---------------  --------------  ---------------
     Management fee revenue                        $   17,805,601  $     7,340,462  $   44,722,878  $    16,332,757
                                                   ==============  ===============  ==============  ===============
</TABLE>

<PAGE>

2.       ACQUISITIONS:

Through   September  30,  1997  and  during  1996,  the  Company,   through  its
wholly-owned  subsidiaries,  acquired certain  operating assets of the following
clinics:

<TABLE>
<CAPTION>

                   Clinic                              Effective Date             Location
<S>      <C>                                         <C>                        <C>
1997:
         Naples Medical Center, P.A.                 March 1, 1997              Naples, FL
         Abilene Diagnostic Clinic, P.L.L.C.         June 1, 1997 (a)           Abilene, TX
         Intercoastal Medical Group, Inc.            August 1, 1997             Sarasota, FL
         Beacon Medical Group                        October 1, 1997 (b)        Harrisburg, PA

1996:
         Cullman Primary Care, P.C.                  March 6, 1996              Cullman, AL
         Morgan-Haugh, P.S.C.                        April 1, 1996              Mayfield, KY
         HealthFirst Medical Group, P.A.             June 1, 1996               Lake Worth, TX
         King's Daughters Clinic, P.A.               September 1, 1996          Temple, TX
</TABLE>

         (a)  Abilene  Diagnostic Clinic,  P.L.L.C.  was operated by the Company
              under an interim service agreement effective December 1, 1995. The
              Company  completed its acquisition of certain  operating assets on
              June 5, 1997, and entered into a long-term  service agreement with
              the physician group effective June 1, 1997.

         (b)  Beacon  Medical Group was operated by the Company under an interim
              service  agreement  effective April 1, 1997. The Company completed
              its  acquisition of certain  operating  assets on October 1, 1997,
              and entered into a long-term service  agreement  effective on that
              date.

Aggregate  purchase price for the 1997  acquisitions  amounted to $53.6 million,
consisting of cash and deferred cash payments,  notes  payable,  common stock of
the Company and the assumption of certain  liabilities.  These acquisitions were
accounted  for  as  purchases,   and  the  accompanying  condensed  consolidated
financial  statements  include the results of their operations from the dates of
their  respective  acquisitions.  Purchase price  allocations to tangible assets
acquired and  liabilities  assumed are based on the estimated fair values at the
dates of acquisitions and are subject to final  revisions.  The impacts of these
acquisitions have been eliminated from the statement of cash flows. Simultaneous
with each  acquisition,  the Company entered into a long-term  service agreement
with the related clinic physician group.  The service agreements are 40 years in
length.

<PAGE>


The  following   unaudited  pro  forma   information   reflects  the  effect  of
acquisitions on the consolidated results of operations of the Company, including
the  operations  for Reno,  had the  acquisitions  occurred  at January 1, 1996.
Future  results may differ  substantially  from pro forma results and may not be
indicative of future operations.

<TABLE>
<CAPTION>
                                                            Three Months                      Nine Months
                                                         Ended September 30,              Ended September 30,
                                                         1997            1996           1997              1996
<S>                                                <C>             <C>              <C>             <C>
Physician groups revenue, net                      $   30,188,765  $    23,832,788  $   87,446,531  $    73,996,459
Less: amounts retained by physician groups             11,769,184        9,165,385      35,407,284       30,232,627
                                                   --------------  ---------------  --------------  ---------------
Management fee revenue                             $   18,419,581  $    14,667,403  $   52,039,247  $    43,763,832
                                                   ==============  ===============  ==============  ===============

Net income                                         $    1,502,025  $       134,186  $    3,092,445  $       816,031
Net income per share                               $         0.10  $          0.01  $         0.22  $          0.08
                                                   ==============  ===============  ==============  ===============
</TABLE>

Pro forma net income and pro forma net income per share for the three months and
nine months ended  September 30, 1997 are lower than  historical  net income and
net income per share for the same  periods  primarily  due to a higher pro forma
tax rate,  which assumes that all net operating  loss  carryforwards  would have
been recognized prior to 1997.

As discussed in Note 1, the Company  completed its merger with Reno on March 17,
1997,  the date of the closing of the Company's  initial  public  offering.  The
accompanying  condensed  consolidated  financial  statements  are  based  on the
assumption  that the companies were combined for the full periods  presented and
prior financial statements have been restated to give effect to the combination.
The  following  unaudited  information  reflects  the  separate  results  of the
combined entities for periods prior to the combination:
<TABLE>
<CAPTION>

                                Three Months Ending             Three Months Ending            Nine Months Ending
                                  March 31, 1997                 September 30,1996              September 30,1996
                               ProMedCo         Reno         ProMedCo          Reno         ProMedCo         Reno
<S>                         <C>            <C>             <C>            <C>            <C>             <C>
Physician groups
    revenue, net            $  17,343,665  $   3,381,912   $   9,659,391  $   3,013,199  $   20,779,713  $   9,025,720
Less: amounts retained
    by physician groups         7,669,484      1,338,687       3,953,024      1,379,104       9,249,420      4,223,256
                            -------------  -------------   -------------  -------------  --------------  -------------
Management fee revenue          9,674,181      2,043,225       5,706,367      1,634,095      11,530,293      4,802,464
                            -------------  -------------   -------------  -------------  --------------  -------------
Operating expenses
    Clinic expenses             8,025,524      1,671,579       4,883,539      1,749,370       9,762,036      5,390,890
    General corporate
     expenses                     818,772         -              643,704         -            1,901,399         -
    Depreciation and
     amortization                 391,507         44,368         180,328         24,041         262,528         60,473
    Interest expense              112,666          3,283          51,505          7,519              50         22,115
    Merger costs                    -              -               -            139,501           -            139,501
                            -------------  -------------   -------------  -------------  --------------  -------------

                                9,348,469      1,719,230       5,759,076      1,920,431      11,976,318      5,612,979
                            -------------  -------------   -------------  -------------  --------------  -------------
Income (loss) before
    provision for income
    taxes                         325,712        323,995         (52,709)      (286,336)       (446,025)      (810,515)
Provision for income taxes         97,714         97,198          -              -               -              -
                            -------------  -------------   -------------  -------------  --------------  -------------
Net income (loss)           $     227,998  $     226,797   $     (52,709) $    (286,336) $     (446,025) $    (810,515)
                            =============  =============   =============  =============  ==============  =============
</TABLE>

<PAGE>


3.       LONG-TERM DEBT:

Long-term debt is summarized as follows:
<TABLE>
<CAPTION>

                                                                              September 30,         December 31,
                                                                                  1997                  1996
<S>                                                                        <C>                   <C>
         Borrowings under bank credit facility                             $        4,468,000    $        4,157,027
         Notes payable issued to physician groups                                   9,041,404               851,549
         Other long-term debt                                                       5,403,872               727,788
                                                                           ------------------    ------------------
                                                                                   18,913,276             5,736,364
         Less current maturities                                                    3,668,146             1,151,191
                                                                           ------------------    ------------------
         Long-term debt, net of current maturities                         $       15,245,130    $        4,585,173
                                                                           ==================    ==================
</TABLE>

In connection with the Naples  affiliation,  the Company issued notes payable to
the group totaling $8.7 million. These notes payable are payable in three annual
installments  in each of April 1998,  1999 and 2000.  The notes bear interest at
9%, with interest payable in options to purchase the Company's common stock at a
price of $9.00 per share,  providing the market price for the stock is above the
exercise  price  at the  time of  payment.  Interest  may be paid in cash at the
option of either party if the market price for the stock is $9.00 or less at the
time of payment.

Included  in other  long-term  debt is $5  million  of  deferred  cash  payments
relating to the acquisition of Intercoastal  Medical Group,  Inc.  Subsequent to
September 30, 1997, these deferred cash payments were funded through  borrowings
under the bank credit facility.


4.       CAPITALIZATION:

During March 1997,  the Company  completed  the initial  public  offering of its
common stock (the  "Offering").  The Offering  consisted of 4,000,000  shares of
common stock sold at a price of $9.00 per share. Gross and net proceeds from the
Offering  were $36 million and $33.5  million,  respectively.  In addition,  net
proceeds were reduced by approximately  $1.7 million of expenses relating to the
Offering,  of which  approximately  $1.6 million had been paid by September  30,
1997.  Upon the completion of the Offering,  500,000  shares of preferred  stock
were converted into common stock. Similarly, 165,296 shares of redeemable common
stock and  613,075  shares of Class B Common  Stock were  converted  into common
stock.

During May 1997, the Company issued an additional  $3.6 million of the Company's
common stock to a physician group acquired in late 1996 relating to post-closing
consideration  adjustments.  In  connection  with the Abilene  acquisition,  the
Company will issue, in January 1998,  approximately  2,000,000  shares of common
stock.  This amount is included in common stock to be issued in the accompanying
September 30, 1997 balance sheet.
<PAGE>


5.       SUPPLEMENTAL EARNINGS PER SHARE DATA:

In March 1997, the Company sold  4,000,000  shares of common stock at a price of
$9.00 per share in the Offering.  The unaudited  supplemental earnings per share
data has been calculated  assuming the Offering  occurred as of the beginning of
each respective period.
<TABLE>
<CAPTION>

                                                            Three Months                     Nine Months
                                                         Ended September 30,             Ended September 30,
                                                         1997            1996           1997              1996
<S>                                                <C>             <C>               <C>              <C>
     Supplemental income per share (primary and
         fully diluted)
     Net income (loss) per share                   $         0.11  $         (0.03)  $        0.21    $      (0.10)
                                                   ==============  ===============   =============    ============
     Supplemental weighted average 
         shares outstanding                            15,060,419       12,190,404      14,994,059      12,198,698
                                                   ==============   ==============   =============    ============
</TABLE>



<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Overview

ProMedCo   Management   Company,   ("ProMedCo"  or  the  "Company")  a  Delaware
corporation,  is a physician  practice  management company that consolidates its
affiliated physician groups into primary-care-driven  multi-specialty  networks.
ProMedCo  commenced  operations in December 1994 and affiliated with its initial
physician  group in June 1995.  The Company's  rapid growth in 1996 and 1997 has
resulted  primarily from its affiliation with additional  physician groups.  The
Company  is  currently  affiliated  with  ten  physician  groups  in six  states
representing 224 physicians and 56 physician extenders  practicing at 48 service
sites.  An  affiliation  with an  eleventh  physician  group,  consisting  of 87
physicians,  39 physician  extenders  and 18  physicians  in an  affiliated  IPA
network,  was completed November 13, 1997. During the third quarter of 1997, the
Company provided certain  management  consulting and strategic planning services
to this group.  The Company is also in the process of completing its acquisition
of a risk management company located in Portland, Maine, which will bring with
it 240 physicians in an affiliated IPA network and  capitation  contracts  
covering 30,000 lives. This acquisition is expected to close in the fourth 
quarter.

When affiliating with a physician group, the Company typically  acquires at fair
market  value the group's  non-real  estate  operating  assets and enters into a
40-year service agreement with the group in exchange for a combination of common
stock,  cash, other securities of the Company,  and/or the assumption of certain
liabilities. The Company is continually seeking additional physician groups with
which to affiliate and is currently  engaged in  negotiations  with several such
groups.

ProMedCo  focuses on pre-managed  care  secondary  markets  located  principally
outside of or  adjacent to large  metropolitan  areas.  The key  elements of the
Company's   strategy   are   to   (i)   affiliate   with   primary-care-oriented
multi-specialty  groups,  (ii) continue to penetrate  pre-managed  care markets,
(iii)  expand  its  affiliated  groups'  market  presence  through  addition  of
physicians  and  ancillary  services,  (iv)  preserve the local  autonomy of the
Company's affiliated physician groups and maintain decentralized  management and
(v) align the Company's economic interests with those of its physician partners.

Results of Operations

As a result of the Company's rapid growth and limited period of affiliation with
its  affiliated  physician  groups,  the  Company  does  not  believe  that  the
period-to-period  comparisons  and percentage  relationships  within periods set
forth below are meaningful.  The Company  commenced  operations in December 1994
and affiliated  with its first physician group in June 1995 and its second group
in December 1995. The Company entered into  affiliations  with eight  additional
groups  during  1996 and the first  nine  months of 1997.  The  significance  of
individual  affiliations,   the  mix  of  physician  specialties  and  ancillary
services,  and the  levels  of  management  consulting  and  other  transitional
services can have  significant  impacts on the percentage  relationships  of the
various income  statement  components.  Changes in results of operations for the
three and nine months ended September 30, 1997 as compared to the three and nine
months ended September 30, 1996 were caused primarily by affiliations with these
additional physician groups.

<PAGE>


The  following  table sets forth the  percentages  of physician  groups  revenue
represented by certain items reflected in the Company's  condensed  consolidated
statements of operations.
<TABLE>
<CAPTION>

                                                           Three Months                      Nine Months
                                                        Ended September 30,              Ended September 30,
                                                        1997           1996             1997            1996
<S>                                                  <C>           <C>              <C>             <C>
Physician groups revenue, net                           100.0%        100.0%           100.0%          100.0%
Less: amounts retained by physician groups               39.2          42.1             41.0            45.2
                                                       ------        ------           ------         -------
Management fee revenue                                   60.8          57.9             59.0            54.8
Operating expenses:
     Clinic salaries and benefits                        23.2          26.0             22.8            25.2
     Clinic rent and lease expense                        5.5           5.7              5.5             5.7
     Clinic supplies                                      6.9           7.7              7.3             6.8
     Other clinic costs                                   9.6          12.9             10.9            13.1
     General corporate expenses                           3.8           5.1              3.6             6.4
     Depreciation and amortization                        3.2           1.6              2.6             1.1
         Interest expense                                 0.4           0.5              0.3             0.2
     Merger costs                                          -            1.1               -              0.5
                                                        -----        ------            -----          ------
Income (loss) before provision for income taxes           8.1%         (2.7)%            6.0%         (4.2)%
Provision for income taxes                                2.6           -                1.8             -
                                                        -----        ------            -----          ------
Net income (loss)                                         5.5%         (2.7)%            4.2%         (4.2)%
                                                        =====        ======            =====          ======
</TABLE>

Physician  groups revenue  increased to $29.3 million for the three months ended
September 30, 1997 from $12.7  million for the three months ended  September 30,
1996, an increase of 131%, and to $75.8 million from $29.8 million for the first
nine months of 1997  compared to 1996,  an  increase  of 154%.  The  increase in
physician groups revenue resulted  primarily from the various  affiliations with
physician groups in 1996 and 1997.

Amounts retained by physician groups as a percentage of physician groups revenue
declined to 39.2% for the three months  ended  September  30, 1997,  compared to
42.1% for the three months ended  September 30, 1996, and to 41.0% for the first
nine months of 1997 compared to 45.2% for the first nine months of 1996. Overall
clinic costs as a percentage of physician  groups revenue  declined to 45.2% for
the three  months  ended  September  30,  1997,  compared to 52.3% for the three
months ended  September 30, 1996, and to 46.5% for the first nine months of 1997
compared  to 50.8%  for the first  nine  months  of 1996.  The mix of  physician
specialties  and ancillary  services  affects the cost of  affiliated  physician
services,  clinic  salaries  and benefits  and clinic  supplies.  Because of the
significance of individual group  affiliations and the level of other revenue to
the  Company  as  a  whole,  these  expense  ratios  will  vary  with  each  new
acquisition.  Generally,  primary  care  and  office-based  physician  practices
require a higher number of support staff than specialty  care or  hospital-based
practices.  Clinic rent and lease  expense as  percentage  of  physician  groups
revenue will vary based on the size of each of the  affiliated  group's  offices
and the current  market rental rate for medical  office space in the  particular
geographic  markets.  Other clinic costs will vary as a percentage  of physician
groups revenue based on regional cost  differences and the Company's  ability to
implement  operational  efficiencies  and negotiate  more  favorable  purchasing
arrangements.


<PAGE>


General corporate  expenses as a percentage of physician groups revenue declined
to 3.8% for the three months ended September 30, 1997,  compared to 5.1% for the
three months ended  September 30, 1996, and to 3.6% for the first nine months of
1997  compared  to 6.4% for the first nine  months of 1996.  The amount of these
expenses continued to increase during the remainder of 1996 and through the nine
months  ended  September  30,  1997,  as  the  Company  continued  to add to its
management  infrastructure.  While the Company  expects that these expenses will
continue to increase as the Company increases the number of affiliated physician
groups, it believes that these expenses will continue to decline as a percentage
of physician groups revenue.

Depreciation  and  amortization  as a  percentage  of physician  groups  revenue
increased  to 3.2% for the three months ended  September  30, 1997,  compared to
1.6% for the three  months  ended  September  30, 1996 and to 2.6% for the first
nine months of 1997  compared  to 1.1% for the first nine  months of 1996.  This
increase is  attributable  to differences  in the mix of assets  acquired in the
various affiliations that have occurred over the past year.

Net interest  expense as a percentage of physician  groups revenue  decreased to
0.4% for the three months  ended  September  30, 1997,  compared to 0.5% for the
three  months ended  September  30, 1996,  primarily  due to increased  interest
income from the investment of unused proceeds from the Company's  initial public
offering of its common stock (the "Offering"),  completed on March 12, 1997. For
the first nine months of 1997, net interest expense as a percentage of physician
groups  revenue  increased to 0.3% for the first nine months of 1997 compared to
0.2% for the  first  nine  months  of 1996 as a result  of  higher  debt  levels
associated with the new affiliations.

Provision for income taxes  reflects an effective  rate of 30.5%,  the Company's
estimated  effective rate for all of 1997. This effective rate is lower than the
Federal   statutory   rate  due  to  the   realization  of  net  operating  loss
carryforwards, which had been previously reserved for.

Liquidity and Capital Resources

At  September  30,  1997,  the  Company had  working  capital of $15.1  million,
compared to $2.3 million at December 31, 1996.  This increase was largely due to
completion of the  Offering,  which  resulted in net proceeds of $33.5  million,
before  expenses of the Offering.  This was  partially  offset by an increase in
deferred  purchase  price of $13.3  million,  resulting  from the Naples Medical
Center and Intercoastal Medical Group affiliations.

Cash from  operations for the nine months ended September 30, 1997 was $301,000.
Net income combined with  depreciation  and  amortization,  deferred taxes,  and
increases in amounts payable to affiliated physician groups and accrued expenses
to provide $8.4  million in cash flows.  This was offset by uses of cash of $8.1
million,  resulting  from  increases  in accounts  receivable,  management  fees
receivable,  amounts  due  from  affiliated  physicians  and  other  assets  and
decreases in accounts payable.


<PAGE>


The Company  had  expenditures  for the  acquisition  of clinic  assets of $14.0
million for the nine months ended  September  30, 1997.  Of this,  approximately
$12.6 million related to the  affiliations  with Abilene and Naples and $535,000
related  to the  affiliation  with  Sarasota.  The  remaining  amounts  were for
additional  physicians at existing clinics and deferred payments associated with
previously completed acquisitions. Capital expenditures amounted to $1.5 million
for the nine months ended  September  30, 1997.  Although  each of the Company's
service agreements with its affiliated  physician groups requires the Company to
provide capital for equipment,  expansion, additional physicians and other major
expenditures,  no specific  amounts  have been  committed  in  advance.  Capital
expenditures  are made  based  partially  upon the  availability  of funds,  the
sources of funds, alternative projects and an acceptable repayment period.

In November 1997, the Company completed an expansion of its bank credit facility
from $25 million to $50 million.  The facility  provides for working capital and
acquisition financing, subject to certain restrictions.  The interest rate under
this facility is, at the Company's option, either the adjusted 30 day commercial
paper rate or one month LIBOR plus 2.70% to 3.25%,  or the bank's base rate plus
0.35% to 0.875%,  depending on certain debt  levels.  The bank credit  facility,
which expires January 2, 2004, contains certain restrictive covenants, including
prohibitions  on paying  dividends,  limitations  on  capital  expenditures  and
maintenance  of minimum  net worth and  certain  financial  ratios.  Outstanding
borrowings  against the bank credit  facility were $4.5 million at September 30,
1997.

In connection with the Naples  affiliation,  the Company issued notes payable to
the group  totaling  $8.7  million.  These  notes are  payable  in three  annual
installments  in each of April 1998,  1999 and 2000.  The notes bear interest at
9%, with interest payable in options to purchase the Company's common stock at a
price of $9.00 per share,  providing the market price for the stock is above the
exercise  price  at the  time of  payment.  Interest  may be paid in cash at the
option of either party if the market price for the stock is $9.00 or less at the
time of payment.

The Company had cash and cash  equivalents  of $17.1  million at  September  30,
1997.  In addition to this,  the  Company's  principal  sources of liquidity are
accounts  receivable  of $13.8  million at September  30, 1997 and  availability
under the working  capital  portion of the bank line of credit of $7.3  million.
The Company believes that the combination of these sources will be sufficient to
meet the  Company's  working  capital  needs  for the next  twelve  months.  The
Company's future acquisition,  expansion and capital  expenditure  programs will
require substantial  amounts of capital resources.  To meet the capital needs of
these  programs,  the Company will continue to evaluate  alternative  sources of
financing,  including short- and long-term bank indebtedness,  additional equity
and other forms of financing,  the  availability  and terms of which will depend
upon market and other  conditions.  There can be no  assurance  that  additional
financing will be available on terms acceptable to the Company.

<PAGE>



Forward-Looking Statements

From time to time,  the  Company may publish  forward-looking  statements  about
anticipated  results.  The  Private  Securities  Litigation  Reform  Act of 1995
provides a safe harbor for forward-looking  statements.  In order to comply with
the terms of the safe  harbor,  the  Company  notes  that  such  forward-looking
statements are based upon internal estimates which are subject to change because
they reflect  preliminary  information  and management  assumptions,  and that a
variety of factors could cause the Company's  actual  results and  experience to
differ materially from the anticipated  results or other expectations  expressed
in the  Company's  forward-looking  statements.  The  factors  which could cause
actual results or outcomes to differ from such  expectations  include the extent
of the  Company's  success in (i)  negotiating  the  acquisition  of  additional
physician groups; (ii) integrating all operations within the planned time frame;
(iii) locating and negotiating additional financing at terms that are acceptable
to the Company; and (iv) negotiating  favorable  reimbursement rates, along with
the uncertainties and other factors described from time to time in the Company's
SEC  filings and  reports.  This report  includes  "forward-looking  statements"
including, without limitation, statements as to operating results, liquidity and
capital resources,  and the negotiation and acquisition of additional  physician
groups.




<PAGE>



Item 2. Changes in Securities and Use of Proceeds

In March, 1997,  ProMedCo Management Company completed the offering of 4,000,000
shares of its common stock at an aggregate price of  $36,000,000.  The effective
date of the  registration  statement  (SEC file number  333-10557) was March 12,
1997.  Managing  underwriters  for  the  offering  were  Piper  Jaffray,   Inc.;
Robertson,  Stephens & Company and Cowen & Company.  All securities offered were
sold  in  the  offering.  Expenses  incurred  through  September  30,  1997,  in
connection with the offering were:

                                                (A)                   (B)

 Underwriting discount                                             $2,520,000
 Other expenses                                $49,986             $1,685,014

    (A) Direct or indirect payments to directors or officers of the issuer.
    (B) Direct or indirect payments to others.

The use of net proceeds of $31,745,000 through September 30, 1997 is:

                                                 (A)                   (B)

 Purchase and installation of
    machinery and equipment                                         $1,030,238
 Acquisition of other businesses                                   $11,626,134
 Repayment of indebtedness                                          $1,715,935
 Working capital                                                    $4,269,508
 Temporary investments                                             $13,103,185

    (A) Direct or indirect payments to directors or officers of the issuer.
    (B) Direct or indirect payments to others.


Item 6.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits:

                  11       Computation of Per Share Earnings

                  27       Financial Data Schedule

         (b)      Reports on Form 8-K

                  On October 15,  1997,  the Company  filed a report on Form 8-K
                  reporting an acquisition  of a physician  group in Harrisburg,
                  Pennsylvania, pursuant to Item 2. of Form 8-K.

                  On October 23,  1997,  the Company  filed a report on Form 8-K
                  reporting  an  acquisition  of a physician  group in Sarasota,
                  Florida, pursuant to Item 2. of Form 8-K.


<PAGE>



                                     SIGNATURES


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


<TABLE>
<CAPTION>

Signature                                                 Title                                  Date



<S>                                             <C>                                        <C>


/s/ H. WAYNE POSEY
H. Wayne Posey                                  President, Chief Executive                  November 14, 1997
                                                Officer, and Director
                                                (Chief Executive Officer)

/s/ ROBERT D. SMITH
Robert D. Smith                                 Vice President - Finance                    November 14, 1997
                                                (Chief Accounting Officer)
</TABLE>