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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549




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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 March 31, 2003 or                                        
|  |  |                                                                                         
|o |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|  |  |                                                                                         
|  |  | For the transition period from      
     to                                            

Commission File Number 0-23639

PROVINCE HEALTHCARE COMPANY

(Exact Name of Registrant as Specified in Its Charter)


|                                                                                           |  |                                                
|------------------------------------------------------------------------------------------ |  | -----------------------------------------------
|Delaware
(State or Other Jurisdiction of
Incorporation or Organization)                    |  | 62-1710772
(I.R.S. Employer
Identification No.)
|                                                                                           |  |                                                
|105 Westwood Place
Suite 400
Brentwood, Tennessee
(Address of Principal Executive Offices) |  | 37027
(Zip Code)                               

(615) 370-1377
(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   o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act)
   
Yes   x   
No   o

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

|                                   |  |                                             
|---------------------------------- |  | --------------------------------------------
|Class
Common Stock, $.01 par value |  | Outstanding at May 1, 2003
48,724,829 shares





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TABLE OF CONTENTS



|                                                                                              |                                                             |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------- |  |  |  |  |  |  | 
|                                                                                              | CONDENSED BALANCE SHEETS                                   
|                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)    
|                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|                                                                                              | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS       
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|ITEM 4. CONTROLS AND PROCEDURES                                                              
|ITEM 6. EXHIBITS AND REPORTS ON FORM -K                                                      
|SIGNATURES                                                                                   
|Ex-99.1 Section 906 Certification of the CEO                                                 
|Ex-99.1 Section 906 Certification of the CFO                                                 



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##### Table of Contents



PART I
FINANCIAL INFORMATION

|                                                                                              |                                                                                            |  |    |   | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ |  | -- | - | 
|Item 1. Financial Statements (Unaudited)                                                      |                                                                                            |  |    |  
|                                                                                              | Condensed Consolidated Balance Sheets
March 31, 2003 and December 31, 2002                 |  |    | 1 | 
|                                                                                              | Condensed Consolidated Statements of Income
Three Months Ended March 31, 2003 and 2002     |  |    | 2 | 
|                                                                                              | Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2003 and 2002 |  |    | 3 | 
|                                                                                              | Notes to Condensed Consolidated Financial Statements                                       |  |    | 4 | 
|Item 2. Managements Discussion and Analysis of Financial Condition
And Results of Operations |                                                                                            |  | 11 |  
|Item 3. Quantitative and Qualitative Disclosures About
Market Risk                            |                                                                                            |  | 18 |  
|Item 4. Controls and Procedures                                                               |                                                                                            |  | 18 |  





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##### Table of Contents



PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES




CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)


|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |         |         | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ----------- | ------- | ------------ | ------- | ------- | ------- | 
|                                     |                                                                                                                                                                                                                               |                            |         | March 31,   |         | December 31,
|                                     |                                                                                                                                                                                                                               |                            |         | 2003        |         | 2002        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |             
|                                     |                                                                                                                                                                                                                               |                            |         | (Unaudited) |         | (Note 1)    
|ASSETS                               |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|Current assets:                      |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     | Cash and cash equivalents                                                                                                                                                                                                     |                            | $       | 15,891      |         |              | $       | 14,417  |        
|                                     | Accounts receivable, less allowance for doubtful accounts
of $73,447 in 2003 and $68,158 in 2002                                                                                                                              |                            |         | 118,858     |         |              |         | 117,431 |        
|                                     | Inventories                                                                                                                                                                                                                   |                            |         | 19,728      |         |              |         | 19,835  |        
|                                     | Prepaid expenses and other                                                                                                                                                                                                    |                            |         | 20,285      |         |              |         | 14,071  |        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     |                                                                                                                                                                                                                               |                            | 174,762 |             |         |              | 165,754 |        
|Property and equipment, net          |                                                                                                                                                                                                                               |                            | 453,508 |             |         |              | 447,379 |        
|Goodwill                             |                                                                                                                                                                                                                               |                            | 319,390 |             |         |              | 319,390 |        
|Other assets                         |                                                                                                                                                                                                                               |                            | 39,604  |             |         |              | 39,188  |        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     |                                                                                                                                                                                                                               | $                          | 987,264 |             |         | $            | 971,711 |        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|Current liabilities:                 |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     | Accounts payable                                                                                                                                                                                                              |                            | $       | 32,106      |         |              | $       | 20,162  |        
|                                     | Accrued salaries and benefits                                                                                                                                                                                                 |                            |         | 25,261      |         |              |         | 25,380  |        
|                                     | Accrued expenses                                                                                                                                                                                                              |                            |         | 22,313      |         |              |         | 13,198  |        
|                                     | Current portion of long-term debt                                                                                                                                                                                             |                            |         | 1,612       |         |              |         | 1,668   |        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     |                                                                                                                                                                                                                               |                            | 81,292  |             |         |              | 60,408  |        
|Long-term debt, less current portion |                                                                                                                                                                                                                               |                            | 441,276 |             |         |              | 461,576 |        
|Other liabilities                    |                                                                                                                                                                                                                               |                            | 37,824  |             |         |              | 33,913  |        
|Minority interests                   |                                                                                                                                                                                                                               |                            | 2,656   |             |         |              | 2,612   |        
|Stockholders equity:                |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     | Preferred stock  $0.01 par value, 100,000 shares
authorized, none issued and outstanding                                                                                                                                     |                            |         |            |         |              |         |        |        
|                                     | Common stock  $0.01 par value; 150,000,000 shares
authorized at March 31, 2003 and December  31, 2002,
issued and outstanding 48,720,594 shares
and 48,581,549 shares at March 31, 2003 and
December  31, 2002, respectively |                            |         | 487         |         |              |         | 486     |        
|                                     | Additional paid-in-capital                                                                                                                                                                                                    |                            |         | 305,264     |         |              |         | 304,102 |        
|                                     | Retained earnings                                                                                                                                                                                                             |                            |         | 119,418     |         |              |         | 109,567 |        
|                                     | Accumulated other comprehensive loss                                                                                                                                                                                          |                            |         | (953        | )       |              |         | (953    | )      
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     |                                                                                                                                                                                                                               | Total stockholders equity |         |             | 424,216 |              |         |         | 413,202 | 
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        
|                                     |                                                                                                                                                                                                                               | $                          | 987,264 |             |         | $            | 971,711 |        
|                                     |                                                                                                                                                                                                                               |                            |         |             |         |              |         |        

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES




CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(In thousands, except per share data)


|                                         |                                 |                       |         |         |                              |   |         |         |         |  | 
|---------------------------------------- | ------------------------------- | --------------------- | ------- | ------- | ---------------------------- | - | ------- | ------- | ------- |  | 
|                                         |                                 |                       |         |         | Three Months Ended March 31,
|                                         |                                 |                       |         |         |                             
|                                         |                                 |                       |         |         | 2003                         |   | 2002   
|                                         |                                 |                       |         |         |                              |   |        
|Revenue:                                 |                                 |                       |         |         |                              |   |         |        
|                                         | Net patient service revenue     |                       | $       | 187,559 |                              |   | $       | 159,780 |        
|                                         | Other                           |                       |         | 6,841   |                              |   |         | 5,821   |        
|                                         |                                 |                       |         |         |                              |   |         |        
|                                         |                                 | Net operating revenue |         |         | 194,400                      |   |         |         | 165,601 | 
|Expenses:                                |                                 |                       |         |         |                              |   |         |        
|                                         | Salaries, wages and benefits    |                       |         | 75,330  |                              |   |         | 62,152  |        
|                                         | Purchased services              |                       |         | 17,784  |                              |   |         | 17,091  |        
|                                         | Supplies                        |                       |         | 24,747  |                              |   |         | 19,745  |        
|                                         | Provision for doubtful accounts |                       |         | 17,194  |                              |   |         | 14,738  |        
|                                         | Other operating expenses        |                       |         | 25,287  |                              |   |         | 18,396  |        
|                                         | Rentals and leases              |                       |         | 2,433   |                              |   |         | 2,152   |        
|                                         | Depreciation and amortization   |                       |         | 9,277   |                              |   |         | 7,581   |        
|                                         | Interest expense                |                       |         | 5,859   |                              |   |         | 4,196   |        
|                                         | Minority interests              |                       |         | 67      |                              |   |         | 59      |        
|                                         | Loss on sale of assets          |                       |         | 3       |                              |   |         | 5       |        
|                                         |                                 |                       |         |         |                              |   |         |        
|                                         |                                 |                       | 177,981 |         |                              |   | 146,115 |        
|                                         |                                 |                       |         |         |                              |   |         |        
|Income before provision for income taxes |                                 |                       | 16,419  |         |                              |   | 19,486  |        
|Income taxes                             |                                 |                       | 6,568   |         |                              |   | 7,794   |        
|                                         |                                 |                       |         |         |                              |   |         |        
|Net income                               |                                 | $                     | 9,851   |         |                              | $ | 11,692  |        
|                                         |                                 |                       |         |         |                              |   |         |        
|Net income per common share (Note 7):    |                                 |                       |         |         |                              |   |         |        
|                                         |                                 | Basic                 |         | $       | 0.20                         |   |         | $       | 0.25    | 
|                                         |                                 |                       |         |         |                              |   |         |        
|                                         |                                 | Diluted               |         | $       | 0.20                         |   |         | $       | 0.23    | 
|                                         |                                 |                       |         |         |                              |   |         |        

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |         |   |       |        |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------- | ------------------------------------- | - | ---------------------------- | ------ | ------- | - | ----- | ------ | -
|                                                 |                                                                                   |   |                                                                                              |                                       |   | Three Months Ended March 31,
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                             
|                                                 |                                                                                   |   |                                                                                              |                                       |   | 2003                         |        | 2002   
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|Cash flows from operating activities:            |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Net Income                                                                        |   | $                                                                                            | 9,851                                 |   |                              | $      | 11,692  |  
|                                                 | Adjustments to reconcile net income to net cash provided by
operating activities: |   |                                                                                              |                                       |   |                              |        |         |  
|                                                 |                                                                                   |   | Depreciation and amortization                                                                |                                       |   | 9,277                        |        |         |   | 7,581 |       
|                                                 |                                                                                   |   | Deferred income taxes                                                                        |                                       |   | 830                          |        |         |   | 112   |       
|                                                 |                                                                                   |   | Provision for professional liability                                                         |                                       |   | 1,979                        |        |         |   | 1,646 |       
|                                                 |                                                                                   |   | Loss of sale of assets                                                                       |                                       |   | 3                            |        |         |   | 5     |       
|                                                 |                                                                                   |   | Changes in operating assets and liabilities, net of effects
from acquisitions and disposals: |                                       |   |                              |        |         |   |       |       
|                                                 |                                                                                   |   |                                                                                              | Accounts receivable                   |   |                              | (1,427 | )       |   |       | (6,098 | )
|                                                 |                                                                                   |   |                                                                                              | Inventories                           |   |                              | 107    |         |   |       | (1,010 | )
|                                                 |                                                                                   |   |                                                                                              | Prepaid expenses and other            |   |                              | (4,804 | )       |   |       | 4,930  |  
|                                                 |                                                                                   |   |                                                                                              | Accounts payable and accrued expenses |   |                              | 21,059 |         |   |       | 5,930  |  
|                                                 |                                                                                   |   |                                                                                              | Accrued salaries and benefit          |   |                              | (119   | )       |   |       | (1,056 | )
|                                                 |                                                                                   |   | Other                                                                                        |                                       |   | (798                         | )      |         |   | (245  | )     
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Net cash provided by operating activities                                         |   |                                                                                              | 35,958                                |   |                              |        | 23,487  |  
|Cash flows from investing activities:            |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Purchase of property and equipment                                                |   |                                                                                              | (15,288                               | ) |                              |        | (15,578 | )
|                                                 | Purchase of acquired hospitals                                                    |   |                                                                                              | (3                                    | ) |                              |        | (329    | )
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Net cash used in investing activities                                             |   |                                                                                              | (15,291                               | ) |                              |        | (15,907 | )
|Cash flows from financing activities:            |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Proceeds from long-term debt                                                      |   |                                                                                              |                                      |   |                              |        | 11,425  |  
|                                                 | Repayments of debts                                                               |   |                                                                                              | (20,356                               | ) |                              |        | (13,774 | )
|                                                 | Issuance of common stock                                                          |   |                                                                                              | 1,163                                 |   |                              |        | 1,537   |  
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Net cash used in financing activities                                             |   |                                                                                              | (19,193                               | ) |                              |        | (812    | )
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|                                                 | Net increase in cash and cash equivalents                                         |   |                                                                                              | 1,474                                 |   |                              |        | 6,768   |  
|Cash and cash equivalents at beginning of period |                                                                                   |   | 14,417                                                                                       |                                       |   |                              | 39,375 |        
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|Cash and cash equivalents at end of period       |                                                                                   | $ | 15,891                                                                                       |                                       |   | $                            | 46,143 |        
|                                                 |                                                                                   |   |                                                                                              |                                       |   |                              |        |        
|Interest payments                                |                                                                                   | $ | 1,742                                                                                        |                                       |   | $                            | 424    |        
|Income taxes received, net                       |                                                                                   | $ | (6,500                                                                                       | )                                     |   | $                            | (7,590 | )      

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. Interim results are not necessarily indicative
of results that may be expected for the full year. In the opinion of
management, the accompanying interim financial statements contain all material
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the consolidated financial position, results of operations and
cash flows of Province Healthcare Company (the Company).

The balance sheet at December 31, 2002, has been derived from the audited
consolidated financial statements at that date, but does not include all of the
financial information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.

For further information, refer to the consolidated financial statements
and footnotes thereto included in the Companys Annual Report on Form 10-K for
the year ended December 31, 2002.

On April 30, 2002, the Company effected a three-for-two stock split, in
the form of a 50% stock dividend, to stockholders of record on April 20, 2002.
The stock split resulted in the issuance of 15.9 million shares of common stock
and a transfer between additional paid in capital and common stock of $159,000.
All historical references to common share and earnings per share amounts
included in the condensed consolidated financial statements and notes thereto
have been restated to reflect the three-for-two split.

2. USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management of the
Company to make estimates and assumptions that affect the amounts reported in
the condensed consolidated financial statements. Actual results could differ
from the estimates.

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

3. ACQUISITIONS

Memorial Hospital of Martinsville and Henry County

In May 2002, the Company acquired Memorial Hospital of Martinsville and
Henry County in Martinsville, Virginia, for approximately $129.2 million,
including working capital. To finance this acquisition, the Company borrowed
$86.0 million under its revolving credit facility and used approximately $43.2
million of available cash. This is the Companys first Virginia hospital and is
the only hospital in the county, serving a population in excess of 100,000.

Los Alamos Medical Center

In June 2002, the Company acquired Los Alamos Medical Center in Los
Alamos, New Mexico, for approximately $39.0 million, including working capital.
To finance this acquisition, the Company borrowed $37.0 million under its
revolving credit facility. This is the Companys first New Mexico hospital and
is the only hospital in the community, serving a population of approximately
50,000.

The operating results of the hospitals acquired in 2002 have been included
in the accompanying condensed consolidated statements of income from the
respective dates of acquisition.

4. GOODWILL AND INTANGIBLE ASSETS

The Company adopted Statement of Financial Accounting Standards No. 142
(SFAS No. 142), Goodwill and Other Intangible Assets, effective January 1,
2002. Under SFAS No. 142, goodwill is no longer amortized, but is subject to
annual impairment tests, or more frequently if certain indicators arise. The
Company performed an impairment test of goodwill upon adoption of SFAS No. 142
on January 1, 2002 and an annual impairment test on October 1, 2002. The
results of the tests had no effect on the operations or financial position of
the Company.

The Company has other intangible assets, net of accumulated amortization
of $1.4 million as of March 31, 2003 which are included in other assets on
the condensed consolidated balance sheet. The intangible assets relate primarily to
non-compete agreements and are amortized over two (2) years.

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

5. LONG-TERM DEBT

In March 2003, the Company amended its $250.0 million credit agreement.
The amendment increased the total debt leverage ratio covenant from 3.75 to
4.25 through the periods ending December 31, 2003, and 4.0 through the
subsequent periods ending December 31, 2004. The covenant will return to its
previous level of 3.75 through the subsequent periods ending December 31,
2005. In addition, the Company decreased the senior debt leverage ratio
covenant from 2.5 to 2.0 for the term of the agreement and increased the
interest rates on the credit facility by 0.5% plus customary closing fees and
expenses.

6. COMPREHENSIVE INCOME

The following table presents the components of comprehensive income, net
of related taxes (in thousands):

|                                               |  |                    |       |      |  |   |        | 
|---------------------------------------------- |  | ------------------ | ----- | ---- |  | - | ------ | 
|                                               |  | Three Months Ended
|                                               |  | March 31,         
|                                               |  |                   
|                                               |  | 2003               |       | 2002
|                                               |  |                    |       |     
|Net income                                     |  | $                  | 9,851 |      |  | $ | 11,692 | 
|Net change in fair value of interest rate swap |  |                    |      |      |  |   | 179    | 
|                                               |  |                    |       |      |  |   |        | 
|Comprehensive income                           |  | $                  | 9,851 |      |  | $ | 11,871 | 
|                                               |  |                    |       |      |  |   |        | 

The net change in fair value of interest rate swap is included in retained
earnings on the condensed consolidated balance sheets.

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

7. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):

|                                          |                                            |                         |      |                    |        |      |      |        |        | 
|----------------------------------------- | ------------------------------------------ | ----------------------- | ---- | ------------------ | ------ | ---- | ---- | ------ | ------ | 
|                                          |                                            |                         |      | Three Months Ended
|                                          |                                            |                         |      | March 31,         
|                                          |                                            |                         |      |                   
|                                          |                                            |                         |      | 2003               |        | 2002
|                                          |                                            |                         |      |                    |        |     
|Numerator:                                |                                            |                         |      |                    |        |      |      |       
|                                          | Net income                                 |                         | $    | 9,851              |        |      | $    | 11,692 |       
|                                          | Add convertible notes interest, net of tax |                         |      |                   |        |      |      | 2,407  |       
|                                          |                                            |                         |      |                    |        |      |      |       
|                                          | Adjusted net income                        |                         | $    | 9,851              |        |      | $    | 14,099 |       
|                                          |                                            |                         |      |                    |        |      |      |       
|Denominator:                              |                                            |                         |      |                    |        |      |      |       
|                                          | Denominator for basic income per share    |                         |      |                    |        |      |      |        |       
|                                          |                                            | Weighted-average shares |      |                    | 48,681 |      |      |        | 47,550 | 
|                                          | Effect of dilutive securities             |                         |      |                    |        |      |      |        |       
|                                          |                                            | Employee stock options  |      |                    | 77     |      |      |        | 1,745  | 
|                                          |                                            | Convertible notes       |      |                    |       |      |      |        | 11,899 | 
|                                          |                                            |                         |      |                    |        |      |      |       
|Denominator for diluted income per share |                                            |                         |      |                    |        |      |      |       
|                                          | Adjusted weighted average shares           |                         |      | 48,758             |        |      |      | 61,194 |       
|                                          |                                            |                         |      |                    |        |      |      |       
|Basic net income per share                |                                            | $                       | 0.20 |                    |        | $    | 0.25 |       
|                                          |                                            |                         |      |                    |        |      |      |       
|Diluted net income per share              |                                            | $                       | 0.20 |                    |        | $    | 0.23 |       
|                                          |                                            |                         |      |                    |        |      |      |       

The add-back of the interest and potential issuance of shares related to the
convertible notes was not included in the computation for 2003 because the
effect would have been anti-dilutive.

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

8. STOCK BASED COMPENSATION

The Company, from time to time, grants stock options for a fixed number of
common shares to employees and directors. The Company accounts for employee
stock option grants using the intrinsic value method in accordance with
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees(Opinion 25), and related interpretations, and accordingly,
recognizes no compensation expense for the stock option grants when the
exercise price of the options equals, or is greater than, the market price of
the underlying stock on the date of grant.

The following pro forma information is being presented in accordance with
SFAS No. 148, Accounting for Stock-Based Compensation-Transition & Disclosure
(adopted by the Company on January 1, 2003). If the compensation cost for the
Companys stock-based compensation plans had been determined based on the fair
value at the grant date for awards under these plans consistent with the
methodology prescribed under SFAS No. 123, Accounting for Stock-Based
Compensation, net income and earnings per share would have been reduced to the
pro forma amounts indicated in the following table:

|                                                          |             |   |                    |      |      |   |        |      | 
|--------------------------------------------------------- | ----------- | - | ------------------ | ---- | ---- | - | ------ | ---- | 
|                                                          |             |   | Three Months Ended
|                                                          |             |   | March 31,         
|                                                          |             |   |                   
|                                                          |             |   | 2003               |      | 2002
|                                                          |             |   |                    |      |     
|Net income  as reported                                  |             | $ | 9,851              |      |      | $ | 11,692 |     
|Less
pro forma effect of stock options
Grants, net of tax |             |   | (1,042             | )    |      |   | (3,567 | )   
|                                                          |             |   |                    |      |      |   |        |     
|Pro forma net income                                      |             | $ | 8,809              |      |      | $ | 8,125  |     
|                                                          |             |   |                    |      |      |   |        |     
|Basic earnings per share                                  |             |   |                    |      |      |   |        |     
|                                                          | As reported |   | $                  | 0.20 |      |   | $      | 0.25 | 
|                                                          | Pro forma   |   | $                  | 0.18 |      |   | $      | 0.17 | 
|Diluted earnings per share                                |             |   |                    |      |      |   |        |     
|                                                          | As reported |   | $                  | 0.20 |      |   | $      | 0.23 | 
|                                                          | Pro forma   |   | $                  | 0.18 |      |   | $      | 0.16 | 

The fair values of stock options granted used to compute pro forma net
income were estimated at the date of grant using a Black-Scholes option
valuation model based on the following weighted-average assumptions:

|                         |  |                    |      |      |  |  |      |  
|------------------------ |  | ------------------ | ---- | ---- |  |  | ---- | -
|                         |  | Three Months Ended
|                         |  | March 31,         
|                         |  |                   
|                         |  | 2003               |      | 2002
|                         |  |                    |      |     
|Risk-free interest rate  |  |                    | 2.43 | %    |  |  | 5.02 | %
|Dividend yield           |  |                    | 0.0  | %    |  |  | 0.0  | %
|Volatility               |  |                    | .638 |      |  |  | .594 |  
|Expected life (in years) |  |                    | 4.0  |      |  |  | 3.1  |  

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. Option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
The Companys employee stock options have characteristics significantly
different from those of traded options. Changes in subjective input
assumptions can materially affect the fair value estimate. Other option
valuation models may produce significantly different fair values of the
Companys employee stock options.

9. CONTINGENCIES

Management continually evaluates contingencies based on the best available
evidence and believes that adequate provision for losses has been provided to
the extent necessary. In the opinion of management, the ultimate resolution of
the following contingencies will not have a material effect on the Companys
results of operations or financial position.

General and Professional Liability Risks

Effective January 1, 2003, the Company increased its self-insurance
retention related to general and professional liability risks to $5.0 million.
The 2003 policy provides coverage up to $50.0 million for claims incurred
during the annual policy term. This increase in retention amount increases our
exposure for claims occurring in 2001 and 2002, and reported in 2003.

The Company estimates its self-insured retention portion of the
malpractice risks using historical claims data, demographic factors, severity
factors and other actuarial assumptions. We maintain a reserve for the
anticipated claims within our deductible and self-insured retentions. The
reserve for general and professional liability risks is included in other
liabilities on the condensed consolidated balance sheet.

Workers Compensation Risks

Effective January 1, 2003, the Company increased its deductible for
workers compensation claims to $500,000 per accident. The Company has
purchased a minimum cap of $12.0 million for total workers compensation losses
within this deductible for 2003. The Companys arrangement with the insurance
provider allows us to prepay the expected amounts of annual workers
compensation claims, which is based upon claims experience. The claims
processor tracks payments for the policy year. At the end of the policy year,
the claims processor compares the total amount prepaid by us to the actual
amount paid by the claims processor. This comparison will ultimately result in
a receivable from or a payable to the claims processor.

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PROVINCE HEALTHCARE COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)  (continued)

Litigation

The Company currently is, and from time to time is expected to be, subject
to claims and suits arising in the ordinary course of business.

Net Patient Service Revenue

Final determination of amounts earned under the Medicare and Medicaid
programs often occurs in subsequent periods because of audits by the programs,
rights of appeal and the application of numerous technical provisions.
Differences between original estimates and subsequent revisions (including
settlements) are included in the consolidated statements of income in the
period in which revisions are made, and result in adjustments in net patient
service revenue. The adjustments for the three months ended March 31, 2003 and
2002 were not material.

Financial Instruments

Interest rate swap agreements are used to manage the Companys interest
rate exposure under the revolving credit facility. The Company maintains a
$28.5 million interest rate swap agreement with a 4.45% fixed interest rate.
This agreement exposes the Company to credit losses in the event of
non-performance by the counterparty to the financial instrument. The Company
anticipates that the counterparty will fully satisfy its obligations under the
contract.

10. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51 (FIN 46). FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
after June 15, 2003. The Company does not expect this new interpretation to
have a material effect on its future results of operations or financial
position.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following along with the Condensed Consolidated
Financial Statements and accompanying notes.

OVERVIEW

We are a healthcare services company focused on acquiring and operating
hospitals in attractive non-urban markets in the United States. As of March
31, 2003, we owned or leased 20 general acute care hospitals in 13 states with
a total of 2,281 licensed beds, and managed 37 hospitals in 14 states, with a
total of 2,955 licensed beds.

Our owned and leased hospitals accounted for 97.9% and 97.7% of our net
operating revenue in the three months ended March 31, 2003 and 2002,
respectively.

IMPACT OF ACQUISITIONS

An integral part of our strategy is to acquire non-urban acute care
hospitals. Because of the financial impact of our recent acquisitions, it is
difficult to make meaningful comparisons between our financial statements for
the fiscal periods presented. In addition, because of the relatively small
number of owned and leased hospitals, each hospital acquisition can materially
affect our overall operating performance. Upon the acquisition of a hospital,
we typically take a number of steps to lower operating costs. The impact of
such actions may be offset by cost increases to expand services, strengthen
medical staff and improve market position. The benefits of these investments
and of other activities to improve operating margins generally do not occur
immediately. Consequently, the financial performance of a newly-acquired
hospital may adversely affect overall operating margins in the near term. As we
make additional hospital acquisitions, we expect that this effect will be
mitigated by the expanded financial base of existing hospitals and the
allocation of corporate overhead among a larger number of hospitals. We may
also divest certain hospitals in the future, if we determine a hospital no
longer fits within our strategy.

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RESULTS OF OPERATIONS

Operating Results Summary

The following are comparative summaries of results from operations for the
three months ended March 31, 2003 and 2002 (dollars in thousands):

|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |    |  |      |  
|---------------------------------------- | ------------------------------- | ------- | --------------------- | ------- | ---------------------------- | ------- | -------- | ---- | ------ | ----- | -------- | ------- | ---------- | ------- | ---- | ---- | ------------- | ----- | ----- | -- |  | ---- | -
|                                         |                                 |         |                       |         | Three Months Ended March 31,
|                                         |                                 |         |                       |         |                             
|                                         |                                 |         |                       |         | 2003                         |         | 2002     |      |        |       |         
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |         
|                                         |                                 |         |                       |         |                              |         |          |      | % of   |       |          |         |            |         | % of |      | % Change from
|                                         |                                 |         |                       |         | Amount                       |         | Revenues |      | Amount |       | Revenues |         | prior year
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |           
|Revenue:                                 |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         | Net patient service revenue     |         | $                     | 187,559 |                              |         |          |      |        |       | $        | 159,780 |            |         |      |      |               |       |       |    | 
|                                         | Other                           |         |                       | 6,841   |                              |         |          |      |        |       |          | 5,821   |            |         |      |      |               |       |       |    | 
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         |                                 |         | Net operating revenue |         |                              | 194,400 |          |      |        | 100.0 | %        |         |            | 165,601 |      |      |               | 100.0 | %     |    |  | 17.4 | %
|Operating expenses:                      |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         | Salaries, wages and benefits    |         |                       | 75,330  |                              |         |          | 38.8 | %      |       |          | 62,152  |            |         |      | 37.5 | %             |       |       |    | 
|                                         | Purchases services              |         |                       | 17,784  |                              |         |          | 9.1  | %      |       |          | 17,091  |            |         |      | 10.3 | %             |       |       |    | 
|                                         | Supplies                        |         |                       | 24,747  |                              |         |          | 12.7 | %      |       |          | 19,745  |            |         |      | 11.9 | %             |       |       |    | 
|                                         | Provision for doubtful accounts |         |                       | 17,194  |                              |         |          | 8.8  | %      |       |          | 14,738  |            |         |      | 8.9  | %             |       |       |    | 
|                                         | Other operating expenses        |         |                       | 25,287  |                              |         |          | 13.0 | %      |       |          | 18,396  |            |         |      | 11.2 | %             |       |       |    | 
|                                         | Rentals and leases              |         |                       | 2,433   |                              |         |          | 1.3  | %      |       |          | 2,152   |            |         |      | 1.3  | %             |       |       |    | 
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         |                                 |         | 162,775               |         |                              |         | 83.7     | %    |        |       | 134,274  |         |            |         | 81.1 | %    |               |       | 21.2  | % 
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|EBITDA (*)                               |                                 |         | 31,625                |         |                              |         | 16.3     | %    |        |       | 31,327   |         |            |         | 18.9 | %    |               |       | 1.0   | % 
|Depreciation and amortization            |                                 |         | 9,277                 |         |                              |         | 4.8      | %    |        |       | 7,581    |         |            |         | 4.6  | %    |               |       |       |   
|Interest expense                         |                                 |         | 5,859                 |         |                              |         | 3.0      | %    |        |       | 4,196    |         |            |         | 2.5  | %    |               |       |       |   
|Minority interests                       |                                 |         | 67                    |         |                              |         |         |      |        |       | 59       |         |            |         |     |      |               |       |       |   
|Loss on sale of assets                   |                                 |         | 3                     |         |                              |         |         |      |        |       | 5        |         |            |         |     |      |               |       |       |   
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|Income before provision for income taxes |                                 |         | 16,419                |         |                              |         | 8.5      | %    |        |       | 19,486   |         |            |         | 11.8 | %    |               |       | (15.7 | %)
|Income taxes                             |                                 |         | 6,568                 |         |                              |         | 3.4      | %    |        |       | 7,794    |         |            |         | 4.7  | %    |               |       |       |   
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|Net income                               |                                 | $       | 9,851                 |         |                              |         | 5.1      | %    |        | $     | 11,692   |         |            |         | 7.1  | %    |               |       | (15.7 | %)
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|Net income per common share:             |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         |                                 | Basic   |                       | $       | 0.20                         |         |          |      |        |       |          | $       | 0.25       |         |      |      |               |       |       |    |  |     
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   
|                                         |                                 | Diluted |                       | $       | 0.20                         |         |          |      |        |       |          | $       | 0.23       |         |      |      |               |       |       |    |  |     
|                                         |                                 |         |                       |         |                              |         |          |      |        |       |          |         |            |         |      |      |               |       |       |   



|(*) |  | EBITDA for 2003 and 2002, respectively, represents the sum of income
before provision for income taxes, depreciation and amortization,
interest, minority interests and gain or loss on sale of assets, and
is reconciled to net income in the table above. EBITDA
serves as a measure of leverage capacity and debt service ability, and
is commonly used as an analytical indicator within the healthcare
industry. Our management considers EBITDA to be one measure of our
ability to service existing debt, sustain potential increases in debt in
the future and to satisfy capital requirements. EBITDA, however, is not
a measure of financial performance under accounting principles generally
accepted in the United States, and should not be considered an
alternative to net income as a measure of operating performance or to
cash flows from operating, investing or financing activities as a
measure of liquidity. Because EBITDA is not a measurement determined in
accordance with accounting principles generally accepted in the United
States and is susceptible to varying calculations, EBITDA as presented
may not be comparable to other similarly titled measures of other
companies.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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|                        |                                            |            |         |                    |         |      |         |          |         |  |      |      |      |  
|----------------------- | ------------------------------------------ | ---------- | ------- | ------------------ | ------- | ---- | ------- | -------- | ------- |  | ---- | ---- | ---- | -
|                        |                                            |            |         | Three Months Ended
|                        |                                            |            |         | March 31,         
|                        |                                            |            |         |                   
|                        |                                            |            |         | 2003               |         | 2002 |         | % Change
|                        |                                            |            |         |                    |         |      |         |         
|Consolidated Hospitals: |                                            |            |         |                    |         |      |         |          |         |  |      |     
|                        | Number of hospitals at end of period       |            |         | 20                 |         |      |         | 18       |         |  |      | 11.1 | %   
|                        | Licensed beds at end of period (a)         |            |         | 2,281              |         |      |         | 2,156    |         |  |      | 5.8  | %   
|                        | Beds in service at end of period           |            |         | 1,994              |         |      |         | 1,831    |         |  |      | 8.9  | %   
|                        | Net patient service revenue (in thousands) |            | $       | 187,559            |         |      | $       | 159,780  |         |  |      | 17.4 | %   
|                        | Admissions (b)                             |            |         | 19,768             |         |      |         | 17,999   |         |  |      | 9.8  | %   
|                        | Adjusted admissions (c)                    |            |         | 34,692             |         |      |         | 29,097   |         |  |      | 19.2 | %   
|                        | Patient days (d)                           |            |         | 84,132             |         |      |         | 80,329   |         |  |      | 4.7  | %   
|                        | Adjusted patient days (e)                  |            |         | 147,683            |         |      |         | 129,896  |         |  |      | 13.7 | %   
|                        | Average length of stay (days) (f)          |            |         | 4.3                |         |      |         | 4.5      |         |  |      | (4.4 | %)  
|                        | Gross revenue (in thousands) (g):          |            |         |                    |         |      |         |          |         |  |      |      |     
|                        |                                            | Inpatient  |         | $                  | 242,061 |      |         | $        | 215,389 |  |      |      | 12.4 | %
|                        |                                            | Outpatient |         |                    | 182,790 |      |         |          | 132,867 |  |      |      | 37.6 | %
|                        |                                            |            |         |                    |         |      |         |          |         |  |      |     
|                        |                                            | $          | 424,851 |                    |         | $    | 348,256 |          |         |  | 22.0 | %   
|                        |                                            |            |         |                    |         |      |         |          |         |  |      |     
|Same Hospitals (h):     |                                            |            |         |                    |         |      |         |          |         |  |      |     
|                        | Number of hospitals at end of period       |            |         | 18                 |         |      |         | 18       |         |  |      |     |     
|                        | Licensed beds at end of period (a)         |            |         | 1,997              |         |      |         | 2,156    |         |  |      | (7.4 | %)  
|                        | Beds in service at end of period           |            |         | 1,795              |         |      |         | 1,831    |         |  |      | (2.0 | %)  
|                        | Net patient service revenue (in thousands) |            | $       | 155,606            |         |      | $       | 159,637  |         |  |      | (2.5 | %)  
|                        | Admissions (b)                             |            |         | 17,541             |         |      |         | 17,999   |         |  |      | (2.5 | %)  
|                        | Adjusted admissions (c)                    |            |         | 29,771             |         |      |         | 29,097   |         |  |      | 2.3  | %   
|                        | Patient days (d)                           |            |         | 74,206             |         |      |         | 80,329   |         |  |      | (7.5 | %)  
|                        | Adjusted patient days (e)                  |            |         | 125,967            |         |      |         | 129,896  |         |  |      | (3.0 | %)  
|                        | Average length of stay (days) (f)          |            |         | 4.2                |         |      |         | 4.5      |         |  |      | (6.7 | %)  
|                        | Gross revenue (in thousands) (g):          |            |         |                    |         |      |         |          |         |  |      |      |     
|                        |                                            | Inpatient  |         | $                  | 218,795 |      |         | $        | 215,389 |  |      |      | 1.6  | %
|                        |                                            | Outpatient |         |                    | 152,603 |      |         |          | 132,867 |  |      |      | 14.9 | %
|                        |                                            |            |         |                    |         |      |         |          |         |  |      |     
|                        |                                            | $          | 371,398 |                    |         | $    | 348,256 |          |         |  | 6.6  | %   
|                        |                                            |            |         |                    |         |      |         |          |         |  |      |     



|(a) |  | Beds for which a hospital has been granted approval to operate
from the applicable state licensing agency.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Represents the total number of patients admitted (in a facility
for a period in excess of 23 hours) and used by management and
investors as a general measure of inpatient volume.                                                                                                                                                                                                                                                                                                                                                                     
|   
|(c) |  | Used by management and investors as a general measure of
combined inpatient and outpatient volume. Adjusted admissions are
computed by multiplying admissions (inpatient volume) by the
outpatient factor. The outpatient factor is the sum of gross
inpatient revenue and gross outpatient revenue divided by gross
inpatient revenue. The adjusted admissions computation equates
outpatient revenue to the volume measure (admissions) used to
measure inpatient volume, resulting in a general measure of
combined inpatient and outpatient volume.
|   
|(d) |  | Represents the total number of days the patients who are
admitted stay in our hospitals.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(e) |  | Adjusted patient days are computed by multiplying patient days
(inpatient volume) by the outpatient factor. The outpatient
factor is the sum of gross inpatient revenue and gross outpatient
revenue divided by gross inpatient revenue. The adjusted patient
days computation equates outpatient revenue to the volume measure
(patient days) used to measure inpatient volume, resulting in a
general measure of combined inpatient and outpatient volume.                                                                                           
|   
|(f) |  | The average number of days admitted patients stay in our
hospitals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(g) |  | Represents revenues prior to reductions for discounts and
contractual allowances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(h) |  | Same hospital information includes the operations of only those
hospitals which were owned during both entire periods presented.                                                                                                                                                                                                                                                                                                                                                                                                                       

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Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Net operating revenue increased 17.4% or $28.8 million to $194.4 million
for the three months ended March 31, 2003, compared to the same period last
year. The increase was primarily attributable to the acquisitions of
Los Alamos Medical Center and Memorial Hospital of Martinsville and
Henry County, which were completed in the second quarter of last year. The
increase was partially offset by a 2.3% decrease in same hospital revenues.
Same hospital revenues declined, primarily due to decreases in inpatient
admissions, resulting from the unusually high number of physician departures
during 2002 (partially offset by newly recruited physicians), and decreases in
net revenue per adjusted admission.

Operating expenses were $162.8 million, or 83.7% of net operating revenue,
for the three months ended March 31, 2003, compared to $134.3 million, or 81.1%
of net operating revenue, for the comparable period of 2002. Salaries and
benefits as a percentage of net operating revenue, increased to 38.8% from
37.5%, primarily due to a decrease in same hospital revenues during the three
months ended March 31, 2003, compared to the same period last year. Purchased
services, as a percentage of net operating revenue, decreased to 9.1% for the
three months ended March 31, 2003, compared to 10.3% for the comparable period
of the prior year. This decrease is primarily attributable to reductions in
contract labor and collection fees as the Company was less reliant on outside
collection consultants and staffing. Supplies increased to 12.7% of net
operating revenue, for the three months ended March 31, 2003, compared to 11.9%
for the comparable period of 2002, due primarily to acquisitions of Memorial
Hospital of Martinsville and Henry County and Los Alamos Medical Center. The
provision for doubtful accounts was relatively unchanged at 8.8% of net
operating revenue for the three months ended March 31, 2003, compared to 8.9%
for the comparable period of 2002. Other operating expenses increased as a
percentage of net operating revenue to 13.0% from 11.1% in the prior year
primarily due to increases in insurance costs and physician recruitment
expenses. Rentals and leases were 1.3% of net operating revenue for both
periods.

The increase in operating expenses as a percentage of net operating
revenue described above resulted in a decrease in EBITDA as a percentage of net
operating revenue. EBITDA was $31.6 million, or 16.3% of net operating revenue,
for the three months ended March 31, 2003, compared to $31.3 million, or 18.9%
of net operating revenue, for the comparable period of 2002.

Depreciation and amortization expense was $9.3 million, or 4.8% of net
operating revenue, for the three months ended March 31, 2003, compared to $7.6
million, or 4.6% of net operating revenue, for the comparable period of 2002.
The increase in depreciation and amortization expense resulted primarily due to
depreciation at the hospitals acquired in 2002.

Interest expense was $5.9 million for the three months ended March 31,
2003, compared to $4.2 million for the comparable period of 2002, primarily due
to increased borrowings from the revolving credit facility to finance the 2002
hospital acquisitions.

Income before provision for income taxes was $16.4 million for the three
months ended March 31, 2003, compared to $19.5 million for the comparable
period of 2002, a decrease of $3.1 million or 15.7%, primarily due to the
factors discussed above. Our provision for income taxes was $6.6 million for
the three months ended March 31, 2003, compared to $7.8 million for the
comparable period of 2002, primarily due to the decrease in pre-tax income.

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As a result of the foregoing, our net income was $9.9 million, or 5.1% of
net operating revenue, for the three months ended March 31, 2003, compared to
$11.7 million, or 7.1% of net operating revenue for the comparable period of
2002.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2003, we had working capital of $93.5 million, including cash
and cash equivalents of $15.9 million compared to working capital of $105.3
million, including $14.4 million in cash and cash equivalents at December 31,
2002. The decline in working capital was primarily due to an increase in
current liabilities.

Cash provided by operations was $36.0 million for the three months ended
March 31, 2003, compared to $23.5 million last year, primarily due to improved
cash collections and the financing of a portion of our insurance premiums
during the first quarter ended March 31, 2003. Cash used in investing
activities was primarily for capital expenditures and totaled $15.3 million and
$15.9 million for the three months ended March 31, 2003 and 2002, respectively.
Net cash used in financing activities increased to $19.2 million for the three
months ended March 31, 2003, compared to $0.8 million for the same period last
year, primarily due to repayments of borrowings from the revolving credit
facility.

The debt repayments decreased long-term debt to $441.3 million at March
31, 2003, from $461.6 million at December 31, 2002. At March 31, 2003, we had
$132.0 million available for borrowing under our senior credit facility.

We intend to acquire additional acute care facilities and are actively
seeking out such acquisitions. There can be no assurance that we will not
require additional debt or equity financing for any particular acquisition.
Also, we continually review our capital needs and financing opportunities and
may seek additional equity or debt financing for our acquisition program or
other needs.

On June 14, 2002, the Securities and Exchange Commission (SEC) declared
effective our shelf registration statement on Form S-3 providing for the offer,
from time to time, of common stock and debt securities, up to an aggregate of
$300.0 million. The shelf registration statement will enable us to raise funds
from the offering of any individual securities covered by the shelf
registration statement as well as any combination thereof, subject to market
conditions and our capital needs.

Capital expenditures for our owned hospitals may vary from year to year
depending on facility improvements and service enhancements undertaken by the
hospitals. We expect to make total capital expenditures in 2003 of
approximately $60.0 million, exclusive of any acquisitions of businesses or new
hospital construction projects. Planned capital expenditures for 2003 consist
principally of capital improvements to owned and leased hospitals. We expect
to fund these expenditures through cash provided by operating activities and
borrowings under our revolving credit facility.

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CRITICAL ACCOUNTING POLICIES AND IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

A description of our critical accounting policies is contained in our
Annual Report on Form 10-K for the year ended December 31, 2002. We have made
no changes in those policies since year end.

MARKET RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS

Our interest expense is sensitive to changes in the general level of
interest rates. To mitigate the impact of fluctuations in interest rates, we
generally maintain 50%  75% of our debt at a fixed rate, either by borrowings
on a long-term basis or entering into an interest rate swap.

At March 31, 2003, approximately 80% of our outstanding debt was
effectively at a fixed rate primarily due to a reduced amount of borrowings on
our revolving line of credit.

Our interest rate swap contract allows us to periodically exchange fixed
rate and floating rate payments over the life of the agreement. Floating-rate
payments are based on LIBOR, and fixed-rate payments are dependent upon market
levels at the time the interest rate swap was consummated. Our interest rate
swap is a cash flow hedge, which effectively converted an aggregate notional
amount of $28.5 million of floating rate borrowings to fixed rate borrowings at
March 31, 2003. Our policy is not to hold or issue derivatives for trading
purposes and to avoid derivatives with leverage features. We are exposed to
credit losses in the event of nonperformance by the counterparty to the
financial instrument. We anticipate that the counterparty will fully satisfy
its obligations under the contract.

GENERAL

The Medicare program accounted for approximately 54.9% and 57.5% of
hospital patient days for the three months ended March 31, 2003 and 2002,
respectively. The Medicaid programs accounted for approximately 20.5% and
19.1% of hospital patient days for the three months ended March 31, 2003 and
2002, respectively. The payment rates under the Medicare program for
inpatients are prospective, based upon the diagnosis of a patient. The
Medicare payment rate increases historically have been less than actual
inflation.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires us to make
estimates and assumptions that affect the amounts reported in our financial
statements. Resolution of matters, for example, final settlements with third
party payors, may result in changes from those estimates. The timing and amount
of such changes in estimates may cause fluctuations in our quarterly or annual
operating results.

FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this report contain some forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements by the fact that
they do not relate strictly to historical or current facts. Such statements may
include words such as anticipate, estimate, expect, project, intend,
plan, believe

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and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. Any or all of our
forward-looking statements in this report may turn out to be wrong. They can be
affected by inaccurate assumptions we might make or by known or unknown risks
and uncertainties. Many factors mentioned in our discussion in this report will
be important in determining future results. Consequently, no forward-looking
statement can be guaranteed. Actual future results may vary materially.
Factors that may cause our plans, expectations, future financial condition and
results to change include, but are not limited to:



| |  |  | the highly competitive nature of the healthcare business;                                                                                                     
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the efforts of insurers, healthcare providers and others to contain healthcare costs;                                                                         
|
| |  |  | the financial condition of managed care organizations that pay
us for healthcare services;                                                                    
|
| |  |  | possible changes in the levels and terms of reimbursement for
our charges by government programs, including Medicare and Medicaid
or other third-party payors;
|
| |  |  | changes in or failure to comply with federal, state or local
laws and regulations affecting the healthcare industry;                                          
|
| |  |  | the possible enactment of federal or state healthcare reform;                                                                                                 
|
| |  |  | the departure of key members of our management;                                                                                                               
|
| |  |  | claims and legal actions relating to professional liability;                                                                                                  
|
| |  |  | our ability to implement successfully our acquisition and development strategy;                                                                               
|
| |  |  | our ability to recruit and retain qualified personnel and physicians;                                                                                         
|
| |  |  | potential federal or state investigations;                                                                                                                    
|
| |  |  | fluctuations in the market value of our common stock or notes;                                                                                                
|
| |  |  | changes in accounting principles generally accepted in the
United States or in our critical accounting policies;                                              
|
| |  |  | changes in demographic, general economic and business
conditions, both nationally and in the regions in which we operate;
and                                 
|
| |  |  | other risks described in this report.                                                                                                                         

Except as required by law, we undertake no obligation to publicly update
any forward-looking statements, whether as a result of new information, future
events or otherwise. You are

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advised, however, to consult any additional disclosures and discussions of
risks we make in our Form 10-K, 10-Q and 8-K reports and other filings with the
Securities and Exchange Commission. These are factors that we think could
cause our actual results to differ materially from expected results. Other
factors besides those listed here also could affect us adversely. This
discussion is provided as permitted by the Private Securities Litigation Reform
Act of 1995.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the three months ended March 31, 2003, there were no material
changes in the quantitative and qualitative disclosures about market risks
presented in our Annual Report on Form 10-K for the year ended December 31,
2002. Our only derivative instrument relates to an interest rate swap
agreement. See Item 2 Market Risks Associated with Financial Instruments.




ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Within 90 days prior to the date of this report we carried out an
evaluation, under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Exchange Act Rule 13a-14 (c)). Based on their
evaluation of such controls and procedures, our chief executive officer and
chief financial officer concluded that our disclosure controls and procedures
are effective to ensure that information required to be disclosed by our
company in the reports we file under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission and that such information is accumulated and communicated to
management, including our chief executive officer and chief financial officer,
as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the evaluation referred to above.

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PART II
OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON
FORM 8-K



|(a) |  | Exhibits
|--- |  | --------

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Number  |  | Description of Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|3.1     |  | Amended and Restated Certificate of Incorporation of Province
Healthcare Company, as filed with the Delaware Secretary of State on
June 16, 2000 (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.2     |  | Certificate of Amendment to the Amended and Restated Certificate of
Incorporation of Province Healthcare Company, as filed with the
Delaware Secretary of State on May 22, 2002 (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3.3     |  | Amended and Restated Bylaws of Province Healthcare Company (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10.1    |  | Second Amendment to Credit Agreement and Consent, dated March
28, 2003, among Province Healthcare Company, Wachovia Bank, National
Association, as Agent, and various parties thereto (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10.2    |  | Amendment No. 2 to Certain Operative Agreements, dated as of
March 28, 2003, among Province Healthcare Company, as the Lessee and
as the Construction Agent, the various parties thereto from time to
time, as guarantors, Wells Fargo Bank Northwest, National
Association, as the Owner Trustee, the various banks and other
lending institutions which are parties thereto from time to time, as
holders, the various banks and lending institutions which are parties
thereto from time to time, as lenders, and Wachovia Bank, National
Association, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders (d)
|99.1    |  | Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes Oxley Act of 2002 *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|99.2    |  | Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes Oxley Act of 2002 *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



---

|(a) |  | Incorporated by reference to the exhibits filed with the
Registrants Quarterly Report filed on Form 10-Q, for the quarterly
period ended June 30, 2000, Commission File No. 0-23639.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Incorporated by reference to the exhibits filed with the
Registrants Registration Statement on Form S-3/A filed
June 11, 2002, Registration No. 333-86578.                          
|   
|(c) |  | Incorporated by reference to the exhibits filed with the
Registrants Current Report on Form 8-K, dated December 12, 2002,
Commission File No. 0-23639                               
|   
|(d) |  | Incorporated by reference to the exhibits filed with the
Registrants Current Report on Form 8-K, dated April 4, 2003,
Commission File No. 0-23639                                   
|   
|*   |  | furnished herewith                                                                                                                                                                   

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|(b) |  | Reports on Form 8-K                                                                             
|--- |  | ------------------------------------------------------------------------------------------------
|   
|    |  | During the three months ended March 31, 2003, we filed the following
current report on
Form 8-K:



| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | Form 8-K, filed on January 6, 2003, with respect to the adoption of
the Preferred Stock Purchase Rights Plan




SIGNATURES

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 thereunto duly authorized.

|                  |  |                             |  |                                               
|----------------- |  | --------------------------- |  | ----------------------------------------------
|                  |  | Province Healthcare Company
|                  |  |                             |  |                                               
|Date: May 9, 2003 |  | By:                         |  | /s/ Brenda B. Rector                          
|                  |  |                             |  |                                               
|                  |  |                             |  | Brenda B. Rector
Vice President and Controller

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PROVINCE HEALTHCARE COMPANY

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Martin S. Rash, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of the registrant,
Province Healthcare Company;

2.     Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors:



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal
controls; and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect

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internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

|                  |  |                                       
|----------------- |  | --------------------------------------
|Date: May 9, 2003 |  |                                       
|                  |  | /s/ Martin S. Rash                    
|                  |  |                                       
|                  |  | Martin S. Rash
Chief Executive Officer

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PROVINCE HEALTHCARE COMPANY

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher T. Hannon, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of the registrant,
Province Healthcare Company;

2.     Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant, and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the Evaluation Date); and



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of the registrants board of directors:



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified
for the registrants auditors any material weaknesses in internal
controls; and



| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal
controls; and

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6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                  |  |                                              
|----------------- |  | ---------------------------------------------
|Date: May 9, 2003 |  |                                              
|                  |  | /s/ Christopher T. Hannon                    
|                  |  |                                              
|                  |  | Christopher T. Hannon
Chief Financial Officer

24