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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

|           |  |                                                                                                                                    
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------
|(Mark One)
|x          |  | Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended December 31, 2002 or
|           |  |                                                                                                                                    
|[   ]      |  | 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 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)

Securities registered pursuant to Section 12 (b) of the Act: None

Securities registered pursuant to Section 12 (g) of the Act:

Common Stock, $.01 Par Value Per Share
(Title of Class)

Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]          No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [   ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X]          No [   ]

The aggregate market value of the shares of Common Stock of the Registrant
held by nonaffiliates on June 28, 2002 (the last business day of the
Registrants second fiscal quarter) was $1,065,041,547 (based upon the closing
price of $22.36 per share as reported on the New York Stock Exchange on such
date).

As of March 1, 2003, 48,713,946 shares of the Registrants Common Stock
were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrants Definitive Proxy Statement for the 2003
Annual Meeting of Shareholders are incorporated by reference under Part III of
this report. The Proxy Statement will be filed with the Securities and
Exchange Commission within 120 days after December 31, 2002.





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EXPLANATORY NOTE

This amendment to our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 is being filed for the sole purpose of correcting the Summary of Obligations and Commitments
table found on page 32 of the Form 10-K. The two parentheticals in
the table should read in thousands instead of in
millions.



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ITEM 7.      MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our
consolidated financial statements and related notes, appearing elsewhere in
this report.

Overview

We are a healthcare services company focused on acquiring and operating
hospitals in attractive non-urban markets in the United States. As of December
31, 2002, we owned or leased 20 general acute care hospitals in 13 states with
a total of 2,280 licensed beds, and managed 36 hospitals in 14 states with a
total of 2,897 licensed beds.

Impact of Acquisitions and Divestitures

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 also
may divest certain hospitals in the future if we determine a hospital no longer
fits within our strategy.

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Industry Trends

The federal Medicare program accounted for approximately 44.5%, 39.8% and
39.7% of net patient revenue in 2002, 2001 and 2000, respectively. The state
Medicaid programs accounted for approximately 12.0%, 10.9% and 9.5% of net
patient revenue in 2002, 2001 and 2000, 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.

Both federal and state legislatures are continuing to scrutinize the
healthcare industry for the purpose of reducing healthcare costs. While we are
unable to predict what, if any, future healthcare-reform legislation may be
enacted at the federal or state level, we expect continuing pressure to limit
expenditures by governmental healthcare programs. The Balanced Budget Act of
1997 imposed certain limitations on increases in the inpatient Medicare rates
paid to acute care hospitals. As required by the Balanced Budget Act of 1997,
payments for hospital outpatient, psychiatric sub-acute, home health and
rehabilitation sub-acute services have converted to prospective payment
systems, instead of payments being based on costs. Most hospital outpatient
services are now reimbursed under an outpatient prospective payment system
based on a system of Ambulatory Payment Classification. Rehabilitation and
psychiatric sub-acute services began transitioning to a prospective payment
system in 2002. The Balanced Budget Act of 1997 also includes a managed care
option that could direct Medicare patients to managed care organizations. The
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) amended the Balanced Budget Act of 1997 by giving hospitals a full
market basket increase in fiscal years 2002 and 2003. In addition, BIPA
contains provisions delaying scheduled reductions in payment for home health
agencies and other provisions designed to lessen the impact on providers of
spending reductions contained in the Balanced Budget Act of 1997. Further
changes in the Medicare or Medicaid programs and other proposals to limit
healthcare spending could have a material adverse effect on the healthcare
industry and our company.

The hospital industry and some of our hospitals continue to have
significant unused capacity. The result is substantial competition for patients
and physicians. Inpatient utilization continues to be affected negatively by
payor-required pre-admission authorization and by payor pressure to maximize
outpatient and alternative healthcare delivery services for less acutely ill
patients. We expect increased competition and admission constraints to continue
in the future. The ability to respond successfully to these trends, as well as
spending reductions in governmental healthcare programs, will play a
significant role in determining the ability of our hospitals to maintain their
current rate of net revenue growth and operating margins.

We expect the industry trend towards the provision of more services on an
outpatient basis to continue. This trend is the result of increased focus on
managed care and advances in technology.

The billing and collection of accounts receivable by hospitals are
complicated by a number of factors, including:



| |  |  | the complexity of the Medicare and Medicaid regulations;                      
| | - |  | ------------------------------------------------------------------------------
|
| |  |  | increases in managed care;                                                    
|
| |  |  | hospital personnel turnover;                                                  
|
| |  |  | the dependence of hospitals on physician documentation of medical records; and
|
| |  |  | the subjective judgment involved.                                             

These factors, or any combination of them, may impact our ability to bill
and collect our accounts receivable at the rates we have anticipated, which
could negatively affect our future cash flows.

The federal government and a number of states are increasing the resources
devoted to investigating allegations of fraud and abuse in the Medicare and
Medicaid programs. At the same time, regulatory and law enforcement authorities
are taking an increasingly strict view of the requirements imposed on providers
by the Social Security Act and Medicare and Medicaid regulations. Although we
believe that we are in material compliance with such laws, a determination that
we have violated such laws, or even the public announcement that we were being
investigated concerning possible violations, could have a material adverse
effect on our company.

26



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Our historical financial trend has been impacted favorably by our success
in acquiring acute care hospitals. While we believe that the healthcare
industry trends described above may create future acquisition opportunities,
our future financial growth rates will be impacted by our ability to acquire
hospitals and to successfully integrate them into our system.

Results of Operations

The following table presents, for the periods indicated, information
expressed as a percentage of net operating revenue. Such information has been
derived from our consolidated statements of income included elsewhere in this
report. The results of operations for the periods presented include hospitals
from their acquisition dates, as previously discussed.

|                              |  |                         |       |      |  |      |       |   |  |  |       |  
|----------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                              |  | Year Ended December 31,
|                              |  |                        
|                              |  | 2002                    |       | 2001 |  | 2000
|                              |  |                         |       |      |  |     
|Net operating revenue         |  |                         | 100.0 | %    |  |      | 100.0 | % |  |  | 100.0 | %
|Operating expenses(1)         |  |                         | (83.5 | )    |  |      | (81.3 | ) |  |  | (82.1 | )
|                              |  |                         |       |      |  |      |       |   |  |  |       |  
|EBITDA(2)                     |  |                         | 16.5  |      |  |      | 18.7  |   |  |  | 17.9  |  
|Depreciation and amortization |  |                         | (4.9  | )    |  |      | (5.7  | ) |  |  | (5.7  | )
|Interest, net                 |  |                         | (3.1  | )    |  |      | (2.3  | ) |  |  | (3.5  | )
|Minority interest             |  |                         | (0.0  | )    |  |      | (0.0  | ) |  |  | (0.0  | )
|Gain (Loss) on sale           |  |                         | 0.0   |      |  |      | (0.0  | ) |  |  | (1.3  | )
|                              |  |                         |       |      |  |      |       |   |  |  |       |  
|Income before income taxes    |  |                         | 8.5   |      |  |      | 10.7  |   |  |  | 7.4   |  
|Provision for income taxes    |  |                         | (3.4  | )    |  |      | (4.5  | ) |  |  | (3.2  | )
|                              |  |                         |       |      |  |      |       |   |  |  |       |  
|Net income(3)                 |  |                         | 5.1   | %    |  |      | 6.2   | % |  |  | 4.2   | %
|                              |  |                         |       |      |  |      |       |   |  |  |       |  

|                                |  |                         |         |      |  |      |         |  |  |   |         | 
|------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                                |  | Year Ended December 31,
|                                |  |                        
|                                |  | 2002                    |         | 2001 |  | 2000
|                                |  |                         |         |      |  |     
|Revenues                        |  | $                       | 704,347 |      |  | $    | 530,739 |  |  | $ | 469,858 | 
|Salaries and benefits           |  |                         | 277,843 |      |  |      | 205,628 |  |  |   | 180,881 | 
|Supplies                        |  |                         | 87,473  |      |  |      | 59,341  |  |  |   | 54,465  | 
|Other operating expenses (1)    |  |                         | 165,934 |      |  |      | 117,017 |  |  |   | 106,790 | 
|Provision for doubtful accounts |  |                         | 56,765  |      |  |      | 49,283  |  |  |   | 43,604  | 
|                                |  |                         |         |      |  |      |         |  |  |   |         | 
|                                |  |                         | 588,015 |      |  |      | 431,269 |  |  |   | 385,740 | 
|                                |  |                         |         |      |  |      |         |  |  |   |         | 
|EBITDA (2)                      |  | $                       | 116,332 |      |  | $    | 99,470  |  |  | $ | 84,118  | 
|                                |  |                         |         |      |  |      |         |  |  |   |         | 



---

|(1) |  | Operating expenses represent expenses before depreciation and
amortization, interest expense, minority interest, (gain) loss on sale of
assets and income taxes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | EBITDA represents the sum of income before income taxes, interest,
depreciation and amortization and minority interest and gain (loss) on
sale of assets. EBITDA is commonly used as an analytical indicator of
operating performance within the healthcare industry and also serves as a
measure of leverage and debt service capacity. Province 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.

27



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|(3) |  | 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. Had the Company been accounting for its goodwill under
SFAS No. 142 for all periods presented, the Companys pro forma net
income, as a percentage of net revenue, would have been 7.0% and 5.2%, for
the years ended December 31, 2001 and 2000, respectively.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Hospital revenues are received primarily from Medicare, Medicaid and
commercial insurance. The percentage of revenues received from the Medicare
program is expected to increase with the general aging of the population. The
payment rates under the Medicare program for inpatients are based on a
prospective payment system, based upon the diagnosis of a patient. While these
rates are indexed for inflation annually, the increases historically have been
less than actual inflation. In addition, states, insurance companies and
employers are actively negotiating the amounts paid to hospitals as opposed to
paying standard hospital rates. The trend toward managed care, including health
maintenance organizations, preferred provider organizations and various other
forms of managed care, may affect our hospitals ability to maintain their
current rate of net operating revenue growth.

We continuously monitor the cost/benefit relationship of services provided
at our hospitals, and make decisions related to adding new services or
discontinuing existing services.

Net patient service revenue is reported net of contractual adjustments and
policy discounts. The adjustments principally result from differences between
our hospitals customary charges and payment rates under the Medicare, Medicaid
and other third-party payor programs. Customary charges generally have
increased at a faster rate than the rate of increase for Medicare and Medicaid
payments. Operating expenses of our hospitals primarily consist of salaries,
wages and benefits, purchased services, supplies, provision for doubtful
accounts, rentals and leases, and other operating expenses, principally
consisting of utilities, insurance, property taxes, travel, physician
recruiting, telephone, advertising, repairs and maintenance.

Other revenue is comprised of fees from management and professional
consulting services provided to third-party hospitals pursuant to management
contracts and consulting arrangements, reimbursable expenses and miscellaneous
other revenue items. Management and professional services revenue plus
reimbursable expenses total less than 3% of our consolidated net operating
revenue for the year ended December 31, 2002. Operating expenses for the
management and professional services business primarily consist of salaries,
wages and benefits and reimbursable expenses.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Net operating revenue increased to $704.3 million in 2002 from $530.7
million in 2001, an increase of $173.6 million, or 32.7%. Cost report
settlements and the filing of cost reports had a minimal effect on net revenue
in 2002, and resulted in a positive revenue adjustment of $0.6 million, or 0.1%
of net operating revenue, in 2001. Net patient service revenue generated by the
17 hospitals owned during both periods increased $3.1 million. Price increases
for these hospitals were offset by a slight decrease in inpatient admissions
(less than 1%) and a decline in surgeries of 6.2%. The decline in admissions
and surgeries were attributable to the departure of 51 physicians at the
hospitals during 2002. Total net patient service revenue increased 33.8%
during 2002, primarily related to the hospitals acquired in the fourth quarter
of 2001 and during 2002.

Our 2002 operations were adversely affected by the loss of physicians.
During 2002, we lost 51 physicians who were major contributors, with the
majority leaving in the last six months of the year. We define a major
contributor as a physician generating $200,000 or more in revenues
annually. All of these physicians left for reasons unrelated to hospital
operations. We recruited 82 physicians in 2002, 59% of whom only started their
practices in the third and fourth quarters of the year. Therefore, the new
practices were unable to generate sufficient volume to replace the lost
revenues generated by the departing physicians. As the new physicians
practices move along the timeline toward full, mature practices, lost revenues
will be replaced. Of the 82 recruited physicians, 76 are admitting physicians.
Based on historic practice patterns of physicians recruited to our hospitals,
to date, these physician practices are tracking in line with historic trends
and our expectations.

28



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Our 2002 operations were adversely impacted by increased competition from
ambulatory surgery centers in two of our markets. We have been proactive in
the only other markets large enough to support full service ambulatory surgery
centers that currently do not have these services, by either pursuing a
certificate of need for a full service ambulatory surgery center ourselves, or
working with physicians in the market to address the community need for
outpatient surgery services.

Operating expenses increased to $588.0 million, or 83.5% of net operating
revenue, in 2002 from $431.3 million, or 81.3% of net operating revenue, in
2001. The increase in operating expenses of hospitals owned during both
periods resulted primarily from new services and increased physician
recruiting. The consolidated provision for doubtful accounts decreased to 8.1%
of net operating revenue in 2002 from 9.3% of net operating revenue in 2001,
primarily related to improvement in days in accounts receivable and increased
up-front cash collections. The majority of the increase in total operating
expenses was attributable to the acquisition of additional hospitals in the
fourth quarter of 2001 and in 2002.

EBITDA was $116.3 million, or 16.5% of net operating revenue, in 2002,
compared to $99.5 million, or 18.7% of net operating revenue, in 2001.

Depreciation and amortization expense increased to $34.2 million, or 4.9%
of net operating revenue, in 2002 from $30.2 million, or 5.7% of net operating
revenue in 2001. The increase in depreciation and amortization resulted
primarily from the acquisition of additional hospitals in 2002 and 2001, and
capital expenditures at hospitals owned during both periods, offset by
non-amortization of goodwill in 2002, which had an impact of approximately $4.4
million. Interest expense increased to $22.0 million in 2002 from $12.1
million in 2001, an increase of $9.9 million or 81.6%. This was a result of
increased borrowings to finance the acquisition of additional hospitals in the
fourth quarter of 2001 and in 2002, and interest on the $172.0 million, 4 1/2%
Convertible Subordinated Notes issued in October 2001.

Income before provision for income taxes was $60.2 million for the year
ended December 31, 2002, compared to $56.7 million in 2001, an increase of $3.5
million or 6.2%.

Our provision for income taxes was $24.1 million for the year ended
December 31, 2002, compared to $23.8 million in 2001. These provisions reflect
effective income tax rates of 40.0% in 2002 and 42.0% in 2001. See Note 8 of
the notes to our consolidated financial statements for information regarding
differences between effective tax rates and statutory rates.

Net income was $36.1 million, or 5.1% of net operating revenue, in 2002,
compared to $32.9 million, or 6.2% of net operating revenue, in 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

Net operating revenue increased from $469.9 million in 2000 to $530.7
million in 2001, an increase of $60.9 million or 13.0%. We divested two
hospitals in the fourth quarter of 2000, which prevents meaningful total
revenue comparisons. Net patient service revenue generated by hospitals owned
during both periods increased $57.9 million, or 14.7%, resulting from inpatient
and outpatient volume increases, new services and price increases. Cost report
settlements and the filing of cost reports resulted in negative revenue
adjustments of $0.7 million, or 0.1% of net operating revenue, in 2000, and a
positive revenue adjustment of $0.6 million, or 0.1% of net revenues in 2001.
The remaining increase was primarily attributable to the acquisitions of
additional hospitals in 2000 and 2001.

Operating expenses increased from $385.7 million, or 82.1% of net
operating revenue, in 2000 to $431.3 million, or 81.3% of net operating revenue
in 2001. The increase in operating expenses of hospitals owned during both
periods resulted primarily from new services, volume increases, changes in case
mix and increased recruiting expenses.

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EBITDA increased from $84.1 million, or 17.9% of net operating revenue, in
2000 to $99.5 million, or 18.7% of net operating revenue, in 2001, primarily as
a result of improved operations at hospitals owned during both periods.

Depreciation and amortization expense increased from $26.6 million, or
5.7% of net operating revenue, in 2000, to $30.2 million, or 5.7% of net
operating revenue in 2001. The increase in depreciation and amortization
resulted primarily from capital expenditures and the acquisitions in 2001, and
a full year of expense for acquisitions made in 2000.

Interest expense as a percent of net operating revenue decreased from 3.5%
in 2000 to 2.3% in 2001. Proceeds from the sale of convertible notes in
November and December 2000 and in October 2001 were used to reduce the higher
rate of indebtedness under the revolving credit facility.

Income before provision for income taxes was $56.7 million in 2001,
compared to $34.7 million in 2000, an increase of $22.0 million or 63.4%. The
increase resulted primarily from improved operations at hospitals owned during
both periods.

Provision for income taxes was $23.8 million in 2001, compared to $14.7
million in 2000. These provisions reflect effective income tax rates of 42.0%
in 2001 compared to 42.5% in 2000. See Note 8 of the notes to our consolidated
financial statements for information regarding differences between effective
tax rates and statutory rates.

Net income was $32.9 million, or 6.2% of net operating revenue, in 2001,
compared to $19.9 million, or 4.2% of net operating revenue in 2000.

Liquidity and Capital Resources

Capital Resources

Total long-term obligations, less current maturities, increased to $461.6
million at December 31, 2002, from $330.8 million at December 31, 2001. The
increase resulted primarily from the borrowings to finance the two hospitals
acquired in the second quarter of 2002.

In November 2001, we reduced the size of our credit facility to $250.0
million, which includes $40.3 million for capital leases and a $209.7 million
revolving line of credit. At December 31, 2002, we had outstanding letters of
credit of $4.3 million, $94.0 million outstanding and $111.4 million available
under our revolving line of credit.

The loans under the credit facility bear interest, at our option, at the
adjusted base rate or at the adjusted LIBOR rate. The interest rate ranged from
3.69% to 5.75% during 2002. We pay a commitment fee, which varies from one-half
to three-eighths of one percent of the unused portion, depending on compliance
with certain financial ratios. The principal amount outstanding under the
revolving credit agreement may be prepaid at any time before the maturity date
of May 31, 2005.

The credit facility contains limitations on our ability to incur
additional indebtedness (including contingent obligations), sell material
assets, retire, redeem or otherwise reacquire our capital stock, acquire the
capital stock or assets of another business, and pay dividends. The credit
facility also requires that we maintain a specified net worth and meet or
exceed certain coverage, leverage, and indebtedness ratios. Indebtedness under
the credit facility is secured by substantially all assets of our company. We
are in compliance with all covenants or other requirements set forth in our
credit agreements or indentures.

Interest rate swap agreements are used to manage our interest rate
exposure under our credit facility. In 1998, we entered into an interest rate
swap agreement that effectively converted for a five-year period $45.0 million
of floating-rate borrowings to fixed-rate borrowings at 5.625%. In September
2002, we amended the swap

30



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agreement and secured a 4.45% fixed interest rate and extended the term of
the agreement to September 30, 2005. All other terms and conditions of the
swap agreement remain unchanged.

Cash Flows  Year Ended December 31, 2002 Compared to Year Ended December 31,
2001

Working capital decreased to $105.3 million at December 31, 2002, from
$136.2 million at December 31, 2001, resulting primarily from decreased cash,
used for the acquisition of Memorial Hospital of Martinsville and Henry County
in 2002. The ratio of current assets to current liabilities was 2.7 to 1.0 at
December 31, 2002. Our cash flows from operating activities increased by $53.6
million to $92.1 million in 2002 from $38.4 million in 2001. This primarily
related to improvements in our cash collection cycle and an increase in
deferred taxes. The use of our cash in investing activities increased to
$217.5 million in 2002 from $169.8 million in 2001, resulting primarily from
smaller outlays of cash for acquisition of property, plant and equipment and
increased use of cash for hospital acquisitions in 2002, compared to 2001. Our
cash flows provided by financing activities decreased to $100.5 million in 2002
from $170.8 million in 2001, resulting from a decrease in net borrowings.

Cash Flows  Year Ended December 31, 2001 Compared to Year Ended December 31,
2000

Working capital increased to $136.2 million at December 31, 2001 from
$63.4 million at December 31, 2000, resulting primarily from increased business
volumes, growth in accounts receivable from acquired hospitals, and effective
management of our working capital. Our cash flows from operating activities
increased by $5.7 million from $32.7 million provided in 2000 to $38.4 million
provided in 2001. Offsetting our improved profitability was a large increase
in accounts receivable, both at hospitals owned during both periods, resulting
from volume increases, new services and price increases, and a build-up of
accounts receivable at newly-acquired hospitals. The use of our cash in
investing activities increased from $40.7 million in 2000 to $169.8 million in
2001, reflecting more acquisitions during 2001. Our cash flows provided by
financing activities increased $162.8 million from $8.0 million in 2000, to
$170.8 million in 2001, primarily because of increased borrowings related to
acquisitions and the sale of convertible notes.

Capital Expenditures

Capital expenditures, excluding acquisitions, in 2002, 2001 and 2000, were
$46.4 million, $72.2 million, and $44.0 million, respectively, inclusive of
construction projects. 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 $55.0 million, exclusive of any acquisitions of
businesses. Planned capital expenditures for 2003 consist principally of
capital improvements and revenue-generating capital expenditures to owned and
leased hospitals. We expect to fund these expenditures through cash provided by
operating activities and borrowings under our revolving credit facility.

If pre-determined operating levels are achieved, we have agreed to build
replacement facilities for Eunice Community Medical Center, currently expected
to cost approximately $20.0 million, and Glades General Hospital, currently
expected to cost approximately $25.0 million. We do not know whether and when
each hospital will achieve its individual pre-determined operating levels, but
we believe it will take approximately 36 months to complete construction from
such date. In connection with certain acquisitions we have made, we have
committed and may commit in the future to make specified capital expenditures.

Based upon our current level of operations and anticipated growth, we
believe that cash generated from operations and amounts available under our
credit facility will be adequate to meet our anticipated debt service
requirements, capital expenditures and working capital needs for the next 12
months. We cannot assure you, however, that our business will generate
sufficient cash flow from operations or that future borrowings will be
available under our credit facility, or otherwise, to enable us to grow our
business, service our indebtedness, including the credit facility and our
convertible subordinated notes, or make anticipated capital expenditures. One
element of our business strategy is expansion through the acquisition of
hospitals in existing and new markets. The completion of acquisitions may
result in the incurrence of, or assumption by us, of additional indebtedness.
Our future operating performance, ability to service or refinance the
convertible subordinated notes and ability to service and extend or refinance
the credit facility will be subject to future economic conditions and to
financial, business and other factors, many of which are beyond our control.

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The following table reflects a summary of obligations and commitments
outstanding as of December 31, 2002.

Payments due by periodLess than1 year
        
        1-2 years
        
        3-4 years
        
        Thereafter
        
        Total(In
thousands)Contractual Cash Obligations:Long-term debt
        
        $
        694
        
        
        $
        245,206
        
        
        $
        
        
        
        $
        172,500
        
        
        $
        418,400Capital lease obligations
        
        
        1,315
        
        
        
        41,742
        
        
        
        997
        
        
        
        2,518
        
        
        
        46,572Operating leases
        
        
        6,690
        
        
        
        9,677
        
        
        
        6,344
        
        
        
        10,863
        
        
        
        33,574Subtotal
        
        $
        8,699
        
        
        $
        296,625
        
        
        $
        7,341
        
        
        $
        185,881
        
        
        $
        498,546


Amount of commitment expiration per periodLess than1 year
        
        1-2 years
        
        3-4 years
        
        Thereafter
        
        Total(In
thousands)Other Commitments:Letters of credit
        
        $
        4,300
        
        
        $
        
        
        
        $
        
        
        
        $
        
        
        
        $
        4,300Total obligations and commitments
        
        $
        12,999
        
        
        $
        296,625
        
        
        $
        7,341
        
        
        $
        185,881
        
        
        $
        502,846


Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States. In
preparing our financial statements, we are required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. We evaluate our estimates and judgments on an ongoing basis.
We base our estimates and judgments on historical experience and on various
other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Our actual results may differ from these estimates, and different assumptions
or conditions may yield different estimates.

Allowance for Doubtful Accounts

Our ability to collect outstanding receivables from third-party payors is
critical to our operating performance and cash flows. The primary collection
risk lies with uninsured patient accounts or patient accounts for which a
balance remains after primary insurance has paid. We estimate the allowance
for doubtful accounts primarily based upon the age of the accounts since
patient discharge date. The allowance for doubtful accounts increased, as a
percentage of accounts receivable net of contractual adjustments, to 36.7% in
2002 from 31.1% in 2001. We continually monitor our accounts receivable
balances and utilize cash collections data and other analytical tools to
support the basis for our estimates of the provision for doubtful accounts.
Significant changes in payor mix or business office operations, or
deterioration in aging accounts receivable could result in a significant
increase in this allowance.

Allowance for Contractual Discounts

The percentage of our patient service revenue derived from Medicare and
Medicaid patients continues to be high. For the year ended December 31, 2002,
Medicare and Medicaid combined was 56.6% of net revenue,

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compared to 50.7% in 2001. The Medicare and Medicaid contracts are often
complex and may include multiple reimbursement mechanisms for different types
of services provided in our hospitals, and cost settlement provisions requiring
complex calculations and assumptions subject to interpretation. We use an
exhibit system to estimate the allowance for contractual discounts on a
payor-specific basis, given our interpretation of the applicable regulations or
contract terms. We have invested significant human resources and information
systems to improve the estimation process; however, the services authorized and
provided and related reimbursement are often subject to interpretation that
could result in payments that differ from our estimates. Additionally, updated
regulations and contract negotiations occur frequently, necessitating our
continual review and assessment of the estimation process.

General and Professional Liability Reserves

We purchased a professional liability claims made reporting policy
effective January 1, 2002. This coverage is subject to a $750,000 deductible
per occurrence for general and professional liability and an additional $2.0
million self-insured retention for professional and general liability. The
policy provides coverage up to $51.0 million for claims incurred during the
annual policy term. We maintain a reserve for the anticipated claims within
these deductible and self-insured retentions. As of January 1, 2003, we
increased our self-insurance retention to $5.0 million. This increase in
retention amount increases our exposure for claims occurring prior to December
31, 2002, and reported in 2003. In 2001 we maintained insurance for individual
malpractice claims exceeding $50,000 per medical incident, subject to an annual
maximum of $500,000 for claims occurring and reported in 2001. We estimate our
self-insured retention portion of the malpractice risks using historical claims
data, demographic factors, severity factors and other actuarial assumptions.
The estimated accrual for malpractice claims could be significantly affected
should current and future occurrences differ from historical claims trends.
The estimation process is also complicated by the relatively short period of
time in which we have owned some of our healthcare facilities, as occurrence
data under previous ownership may not necessarily reflect occurrence data under
our ownership. While management monitors current claims closely and considers
outcomes when estimating our insurance accruals, the complexity of the claims
and wide range of potential outcomes often hampers timely adjustments to the
assumptions used in the estimates.

Workers Compensation Reserves

Workers compensation claims are insured with a large deductible with stop
loss limits of $250,000 per accident and a $6.6 million and $3.0 million
minimum cap on total losses for the 2002 and 2001 years, respectively. Our
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
ultimately will result in a receivable from or a payable to the claims
processor.

We are fully insured in the commercial marketplace for workers
compensation claims prior to January 1, 1999. We utilize loss run reports
provided by the claims administrator to determine the appropriate range of loss
reserves for the 1999 and subsequent years. Our accruals are calculated to
cover the risk from both reported claims and claims that have been incurred but
not yet reported.

Medical Claims Reserves

We maintain self-insured medical and dental plans for employees. Claims
are accrued under these plans as the incidents that give rise to them occur.
We use a third-party administrator to process all such claims. Unpaid claim
accruals are based on the estimated ultimate cost of settlement, including
claim settlement expenses, in accordance with an average lag time and past
experience. We have entered into a reinsurance agreement with an independent
insurance company to limit our losses on claims. Under the terms of this
agreement, the insurance company will reimburse us a maximum of $800,000 on any
individual claim. While management believes that its estimation methodology
effectively captures trends in medical claims costs, actual payments could
differ significantly from our estimates, given changes in the healthcare cost
structure or adverse experience.

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Goodwill and Long-Lived Assets, Including Impairment

Our consolidated financial statements primarily include the following
types of long-lived assets: property, plant and equipment, goodwill and other
intangible assets. Property, plant and equipment purchased in the normal
course of business are recorded at the cost of the purchase and a useful life
is assigned based upon the nature of the asset in comparison to our companys
policy. We also, in connection with our acquisition of businesses, acquire
property, plant and equipment, goodwill and other intangible assets. We use
outside firms to perform a valuation of these acquired assets for the purpose
of allocating the purchase price of the acquisition. As a result of the
adoption of Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets(SFAS No. 142), we have obtained valuation
reports to identify property, plant and equipment, as well as any intangible
assets purchased in our acquisitions. Based on the valuation reports completed
to date, the only identifiable intangible assets valued have been non-compete
agreements and licenses and accreditations, which have had minimal associated
value; the remainder was goodwill. In accordance with the new standard, we
have not recognized amortization of goodwill during the 2002 year.

Impairment of goodwill is governed by SFAS No. 142. In accordance with
the adoption of SFAS No. 142, we completed our transitional impairment test
prior to June 30, 2002 as of the beginning of 2002. The results of our review
indicated that no impairment was present related to the adoption of this
accounting standard. Additionally, we completed our annual impairment test as
of October 1, 2002. Our annual impairment test is based upon a combination of
market capitalization and projected EBITDA run-rate (adjusted for a multiple of
earnings) for the consolidated Company. The results of this annual impairment
test indicated no impairment has occurred.

Impairment of long-lived assets other than goodwill are governed by SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. We
adopted this statement effective January 1, 2002. The adoption of this
statement did not have an impact on our results of operations or financial
condition for the 2002 year.

Inflation

The healthcare industry is labor intensive. Wages and other expenses
increase, especially during periods of inflation and labor shortages. In
addition, suppliers pass along to us rising costs in the form of higher prices.
We generally have been able to offset increases in operating costs by
increasing charges for services, expanding services, and implementing cost
control measures to curb increases in operating costs and expenses. In light of
cost containment measures imposed by government agencies and private insurance
companies, we do not know whether we will be able to offset or control future
cost increases, or be able to pass on the increased costs associated with
providing healthcare services to patients with government or managed care
payors, unless such payors correspondingly increase reimbursement rates.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 CompanyBy:
        
        /s/ Martin S.
RashMartin S. Rash
Chairman of the Board and 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, Martin S. Rash, certify that:

1. I have reviewed this annual report
on Form 10-K/A of the Registrant,
Province Healthcare Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 annual 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 annual report (the Evaluation Date); and

c) presented in this annual 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
annual 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:  March 27, 2003
        
        /s/ Martin S. RashMartin 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 annual report on Form 10-K/A of the Registrant,
Province Healthcare Company;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 annual 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 annual report (the Evaluation Date); and

c) presented in this annual 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
annual 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:  March 27, 2003
        
        /s/ Christopher T. HannonChristopher T. Hannon
Chief Financial Officer