QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

COMMUNITY HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

155 Franklin Road, Suite 400
Brentwood, Tennessee
(Address of principal executive offices)

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, and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)

As of November 3, 2003, there were outstanding 98,491,650 shares of the Registrant's Common Stock, $.01 par value.

Community Health Systems, Inc.
Form 10-Q
For the Quarter and Nine Months Ended September 30, 2003

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited condensed consolidated financial statements of Community Health Systems, Inc. and its subsidiaries (the "Company") as of and for the three and nine month periods ended September 30, 2003 and September 30, 2002, have been prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. All intercompany transactions and balances have been eliminated. The results of operations for the nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2003.

Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission, although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2002 contained in the Company's Annual Report on Form 10-K.

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

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities ("VIE's")" ("FIN No. 46"). This interpretation clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to certain entities in which equity investors 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 No. 46 applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. Effective with the quarter beginning July 1, 2003, the interpretation applies immediately to VIE's created before February 1, 2003, and to interest obtained in VIE's before February 1, 2003. Under certain conditions, the effective date has been delayed to the first year or interim period ending after December 15, 2003. The Company does not expect the adoption of this interpretation to have a material effect on our consolidated financial position or consolidated results of operations. As of September 30, 2003 the Company has no investments in VIE's.

In May 2003, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 149 "Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003. The Company does not anticipate a material impact on its results of operations or financial position from the adoption of SFAS No. 149.

In May 2003, the FASB issued SFAS No. 150 "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 is effective immediately for instruments entered into or modified after May 15, 2003, and to all other instruments that exist as of the beginning of the first interim reporting period beginning after June 15, 2003. The Company does not anticipate a material impact on its results of operations or financial position from the adoption of SFAS No. 150.

Effective January 1, 2003, the Company acquired seven hospitals located in West Tennessee from Methodist Healthcare Corporation of Memphis, Tennessee in a single purchase transaction. The aggregate consideration for the seven hospitals totaled approximately $150 million of which approximately $141 million was paid in cash and approximately $9 million was assumed in liabilities. Combined licensed beds at these seven facilities total 676.

Effective July 1, 2003, the Company acquired Pottstown Memorial Center located in Pottstown, Pennsylvania, approximately 50 miles west of Philadelphia and 25 miles east of Reading, Pennsylvania. The hospital, which has a total of 222 beds, was acquired from a local not-for-profit organization. The aggregate consideration for the hospital totaled approximately $87 million of which approximately $80 million was paid in cash and approximately $7 million was assumed in liabilities. Licensed beds at this facility total 222.

Effective August 1, 2003, the Company acquired Southside Regional Medical Center in Petersburg, Virginia in a capital lease transaction. The aggregate consideration for the hospital totaled approximately $92 million of which $81 million was paid in cash and approximately $11 million was assumed in liabilities. Licensed beds at this facility total 408. As part of this transaction, the Company has agreed to build a replacement hospital. This hospital was acquired from a public hospital authority.

Substantially all cash paid for acquisitions in 2003 was borrowed under the Company's Credit Agreement.

On July 2, 2003, the Company amended its senior secured credit facility by exercising the feature allowing the Company to add up to $200 million of funded term loans with the same interest rate per annum as the existing term loans. After borrowing the full $200 million of the incremental term loans, the amended facility consists of $850 million in term loans that mature in 2010, $200 million in incremental term loans that mature in 2011, and a $350 million revolving credit facility that expires in 2008.

The Company accounts for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. Compensation cost for stock-based compensation, which is an insignificant amount for the Company, is measured as the excess of the fair value of the Company's stock at the date of grant over the amount an employee must pay to acquire the stock. SFAS No. 123, "Accounting for Stock-Based Compensation," established accounting and disclosure requirements using a fair value based method of accounting for stock-based employee compensation plans; however, it allows an entity to continue to measure compensation for those plans using the intrinsic value method of accounting prescribed by APB Opinion No. 25. The Company has elected to continue to measure compensation under the method of accounting as described above, and has adopted the disclosure requirements of SFAS No. 123 and SFAS No. 148.

Had the fair value based method under SFAS No. 123 been used to value options granted and compensation expense recognized on a straight line basis over the vesting period of the grant, the

Company's net income and income per share would have been reduced to the pro-forma amounts indicated below (in thousands, except per share data):

The changes in the carrying amount of goodwill for the nine months ended September 30, 2003, are as follows (in thousands):

Balance as of December 31, 2002	$	1,029,975
Goodwill acquired as part of acquisitions during 2003		116,486
Consideration adjustments and finalization of purchase price allocations for acquisitions completed prior to 2003		8,020

Balance as of September 30, 2003	$	1,154,481

The Company completed its annual goodwill impairment test as required by SFAS No. 142, using a measurement date of September 30, 2002. Based on the results of the impairment test, the Company was not required to recognize an impairment of goodwill for the year ended December 31, 2002. The annual goodwill impairment test for 2003 is currently being performed using a measurement date of September 30, 2003.

The gross carrying amount of the Company's other intangible assets was $4.5 million as of September 30, 2003 and $3.7 million as of December 31, 2002, and the net carrying amount was $3.0 million and $2.6 million as of September 30, 2003 and December 31, 2002, respectively. Other intangible assets are included in Other assets, net on the Company's balance sheet.

The weighted-average amortization period for the intangible assets subject to amortization is approximately 6 years. There are no expected residual values related to these intangible assets. Amortization expense on intangible assets during the three and nine months ended September 30, 2003 was $0.1 million and $0.3 million, respectively. Amortization expense on existing intangible assets is estimated to be $0.2 million for the remainder of 2003, $0.6 million in fiscal 2004, $0.5 million in fiscal 2005, $0.3 million in fiscal 2006, $0.1 million in fiscal 2007, and $0.1 million in fiscal 2008.

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

Since the net income per share impact of the conversion of the convertible notes is less than the basic net income per share for the three and nine months ended September 30, 2003, and the three and nine months ended September 30, 2002, the convertible notes are dilutive for the periods and accordingly, must be included in the fully diluted calculation.

On January 23, 2003, the Company announced an open market share repurchase program for up to five million shares of its common stock. The share repurchase program will conclude at the earlier of three years or when the maximum number of shares have been repurchased. As of September 30, 2003, the Company has repurchased 760,000 shares at an average cost of $18.45 per share.

The following table presents the components of comprehensive income, net of related taxes. The change in fair value of interest rate swap agreements is a function of the spread between the fixed interest rate of the swap and the underlying variable interest rate (in thousands):

The net change in fair value of the interest rate swap is included in stockholders' equity on the condensed consolidated balance sheets.

Effective October 1, 2003, the Company completed the acquisition of Laredo Medical Center in Laredo, Texas. The acquisition includes a 326 bed hospital, an ambulatory care center, a diagnostic center, a cancer center and several medical office buildings. The consideration for this hospital totaled approximately $129 million of which approximately $121 million was paid in cash and approximately $8 million was assumed in liabilities. This hospital is located approximately 140 miles south of San Antonio, Texas.

Effective October 3, 2003, the Company entered into an additional $100 million interest rate swap agreement to limit the cash flow effect of changes in interest rates on a portion of our long-term borrowings. Under this agreement, the Company pays interest quarterly at an annualized fixed interest rate of 2.31% for a term ending October 3, 2006. On payment dates, the Company receives an offsetting variable rate of interest payment from a counterparty based on the three month London Inter-Bank Offer Rate, excluding the margin paid under the Company's credit agreement on a quarterly basis, which is currently 250 basis points.

At the time of acquisition of the hospitals from Methodist Healthcare Corporation of Memphis, Tennessee, the hospital in Jackson, Tennessee was defending a long standing certificate of need challenge by its competitor against the hospital's interventional cardiology and open heart surgery program. The litigation concluded in October 2003 and resulted in the voiding of the previously issued certificate of need and a discontinuation of these services. Further action at the agency level is being pursued by the hospital but there can be no assurance it will be able to reinstate these services.

On November 10, 2003, the Company entered into an agreement that provided for the sale of Berrien County Hospital (63 licensed beds) located in Nashville, Georgia for approximately $5 million in cash plus liabilities. This transaction was effective November 1, 2003. The results from this transaction are not expected to have a material impact on the Company's results of operations.

Item 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operations

This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements included herein.

Effective January 1, 2003, we acquired seven hospitals located in West Tennessee from Methodist Healthcare Corporation of Memphis, Tennessee in a single purchase transaction. The aggregate consideration for the seven hospitals totaled approximately $150 million of which approximately $141 million was paid in cash and approximately $9 million was assumed in liabilities. Combined licensed beds at these seven facilities totaled 676.

Effective July 1, 2003, we acquired Pottstown Memorial Medical Center located in Pottstown, Pennsylvania, approximately 50 miles west of Philadelphia and 25 miles east of Reading, Pennsylvania. The hospital, which has a total of 222 beds, was acquired from a local not-for-profit organization. The consideration for this hospital totaled approximately $87 million of which approximately $80 million was paid in cash and approximately $7 million was assumed in liabilities.

Effective August 1, 2003, we acquired Southside Regional Medical Center (408 beds) in Petersburg, Virginia located 22 miles south of Richmond, Virginia. The consideration for this hospital totaled approximately $92 million of which approximately $81 million was paid in cash and approximately $11 million was assumed in liabilities. As part of the transaction, we have agreed to build a replacement hospital. This hospital was acquired from a public hospital authority.

Effective October 1, 2003, the Company completed the acquisition of Laredo Medical Center (326 beds) in Laredo, Texas. The consideration for this hospital totaled approximately $129 million of which approximately $121 million was paid in cash and approximately $8 million was assumed in liabilities. This hospital was acquired from the Sisters of Mercy Health System, in St. Louis, Missouri.

Net operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems and provisions of cost-reimbursement and other payment methods. Approximately 41.9% and 42.8% of net operating revenues for the three month periods ended September 30, 2003 and September 30, 2002, respectively, and 43.0% and 44.1% of net operating revenues for the nine month periods ended September 30, 2003 and September 30, 2002, respectively, are related to services rendered to patients covered by the Medicare and Medicaid programs. In addition, we are reimbursed by non-governmental payors using a variety of payment methodologies. Amounts we receive for treatment of patients covered by these programs are generally less than the standard billing rates. We account for the differences between the estimated program reimbursement rates and the standard billing rates as contractual adjustments, which we deduct from gross revenues to arrive at net operating revenues. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. We account for adjustments to previous program reimbursement estimates as contractual adjustments and report them in the periods that such adjustments become known. Adjustments related to final settlements or appeals that increased revenue were insignificant in each of the three and nine month periods ended September 30, 2003 and 2002.

In the future, we expect the percentage of revenues received from the Medicare program to increase due to the general aging of the population. The payment rates under the Medicare program for inpatients are based on a prospective payment system, depending upon the diagnosis of a patient's condition. While these rates are indexed for inflation annually, the increases have historically been less than actual inflation. Reductions in the rate of increase in Medicare reimbursement may have an adverse impact on our net operating revenue growth. Effective April 1, 2002, Centers for Medicare and Medicaid Services implemented changes to the Medicare outpatient prospective payment system. Also beginning April 1, 2003, and extending through September 30, 2003, the Consolidated Appropriations Resolution of 2003 equalized the rural and urban standardized payment amounts under the Medicare inpatient prospective payment system. Congress further approved an extension of this measure through March 31, 2004, through an amendment to the Temporary Assistance for Needy Families Block Grant Extension bill. These changes should not materially affect our net operating revenue growth. In addition, Congress is considering passage of a Medicare Prescription Drug bill that contains provider payment provisions. The outcome of the bill and impact of its provisions are unknown at this time.

In addition, certain managed care programs, insurance companies, and employers are actively negotiating the amounts paid to hospitals. The trend toward increased enrollment in managed care may adversely effect our net operating revenue growth.

Our hospitals offer a variety of services involving a broad range of inpatient and outpatient medical and surgical services. These include orthopedics, cardiology, OB/GYN, occupational medicine, diagnostic services, emergency services, rehabilitation treatment, home health, and skilled nursing. The strongest demand for hospital services generally occurs during January through April and the weakest demand for these services occurs during the summer months. Accordingly, eliminating the effect of new acquisitions, our net operating revenues and earnings are historically highest during the first quarter and lowest during the third quarter.

The following tables summarize, for the periods indicated, selected operating data.

		Three Months Ended September 30,				Nine Months Ended September 30,
		2003		2002		2003		2002
Net Income		$	31,683	$	20,156	$	95,838	$	71,573
Provision for income taxes			21,117		14,397		63,934		50,698
Interest expense, net			18,468		14,788		52,151		48,039
Loss from early extinguishment of debt			—		8,646		—		8,646
Depreciation and amortization			36,374		28,982		103,974		86,417
Minority interest in earnings			651		345		1,703		1,861

	ADJUSTED EBITDA	$	108,293	$	87,314	$	317,600	$	267,234

		Three Months Ended September 30,						Nine Months Ended September 30,
		2003		%	2002		%	2003		%	2002		%
Net operating revenue		$	597,351	100.0	$	552,749	100.0	$	1,749,188	100.0	$	1,616,659	100.0

Income from operations			62,580	10.5		57,978	10.5		197,041	11.2		178,893	11.1
Depreciation and amortization			32,146	5.4		28,982	5.2		92,196	5.3		86,417	5.3
Minority interest in earnings			651	0.1		345	0.1		1,703	0.1		1,861	0.1

	ADJUSTED EBITDA	$	95,377	16.0	$	87,305	15.8	$	290,940	16.6	$	267,171	16.5

Three Months Ended September 30, 2003 Compared to Three Months Ended September 30, 2002

Net operating revenues increased by 30.8% to $723.0 million for the three months ended September 30, 2003 from $552.8 million for the three months ended September 30, 2002. Of the $170.2 million increase in net operating revenues, the hospitals we acquired in 2002 and 2003, which are not yet included in same-store revenues, contributed approximately $125.6 million, and hospitals we owned throughout both periods contributed $44.6 million, an increase of 8.1%. The increase from hospitals owned throughout both periods was attributable primarily to rate increases, increased intensity of services, increases in government reimbursement and a slight increase in volume.

Inpatient admissions increased by 23.5%. Adjusted admissions increased by 22.3%. Adjusted admissions is a general measure of combined inpatient and outpatient volume. We compute adjusted admissions by multiplying admissions by gross patient revenues and then dividing that number by gross inpatient revenues. On a same-store basis, inpatient admissions increased by 1.0%, adjusted admissions decreased by 1.0% and patient days increased 3.3%. The decrease in same-store adjusted admissions was due primarily to inpatient revenue growing at a faster rate than outpatient revenue and the slowing of home health and clinic revenue. We anticipate the economy will continue to negatively impact our ability to grow admissions above prior year levels for the remainder of 2003. On a same-store basis, net inpatient revenues increased 4.6% and net outpatient revenues increased 12.1%.

Operating expenses, as a percentage of net operating revenues, increased from 84.2% for the three months ended September 30, 2002 to 85.0% for the three months ended September 30, 2003. Salaries and benefits, as a percentage of net operating revenues, decreased from 40.1% for the three months ended September 30, 2002 to 39.9% for the three months ended September 30, 2003, primarily as a result of improvements at hospitals owned throughout both periods, offset by hospitals acquired in 2002 and 2003 having higher salaries and benefits as a percentage of net operating revenues, for which reductions have not yet been realized and the impact of the nurses strike at Easton Hospital that began in August 2003 and was settled in September, 2003. Provision for bad debts, as a percentage of net revenues, increased from 9.5% for the three months ended September 30, 2002 to 9.8% for the three months ended September 30, 2003, primarily as a result of an increase in self-pay accounts. Supplies, as a percentage of net operating revenues, increased from 11.4% for the three months ended September 30, 2002 to 11.6% for the three months ended September 30, 2003, due mainly to the impact of the larger hospitals recently acquired, which have significantly higher supply expense as a percentage of net revenue, and the timing of converting to contracted vendors in our Broadlane group purchasing arrangement, offset by improvements made to hospitals owned throughout both periods. Rent and other operating expenses, as a percentage of net operating revenues, increased from 23.2% for the three months ended September 30, 2002 to 23.7% for the three months ended September 30, 2003. This increase was caused primarily by an increase of 1.0% of net

operating revenue in contract labor expense and an increase in malpractice insurance expense of 0.3%, offset by a decrease of 0.8% for other operating expenses. The increase in contract labor expense is primarily attributable to the strike, at Easton Hospital. Adjusted EBITDA margins decreased from 15.8% for the three months ended September 30, 2002 to 15.0% for the three months ended September 30, 2003 due to the lower initial adjusted EDITDA margins associated with hospitals acquired in 2002 and 2003. Net income margins increased from 3.6% for the three months ended September 30, 2002 to 4.4% for the three months ended September 30, 2003 due to decreases in depreciation and interest as a percentage of net operating revenues, offset by the higher operating expenses as a percentage of net operating revenues at the hospitals acquired in 2002 and 2003.

On a same-store basis, operating expenses, as a percentage of net operating revenues, decreased from 84.2% for the three months ended September 30, 2002 to 84.0% for the three months ended September 30, 2003, resulting in an increase in our same-store adjusted EBITDA margin from 15.8% for the three months ended September 30, 2002 to 16.0% for the three months ended September 30, 2003. We achieved this reduction through a decrease in salary and benefits expense of 1.6% of net operating revenue resulting from a combination of operating efficiency gains and the impact of the strike at Easton Hospital, which was offset by an increase in contract labor, to replace the striking workers, of 1.0% of net operating revenue. In addition, the provision for bad debts expense increased 0.9% of net operating revenues and other operating expenses decreased 0.5% of net operating revenue. On a same-store basis, income from operations remained unchanged at 10.5% of net operating revenues for the three months ended September 30, 2002 and September 30, 2003.

Depreciation and amortization increased by $7.4 million from $29.0 million, or 5.2% of net operating revenues, for the three months ended September 30, 2002 to $36.4 million, or 5.0% of net operating revenues, for the three months ended September 30, 2003. The two hospitals acquired on or after September 30, 2002 and the nine hospitals acquired in 2003 accounted for $4.1 million of the increase, while facility renovations and purchases of equipment, information systems upgrades, and other deferred items accounted for the remaining $3.3 million.

Interest expense, net, increased by $3.7 million from $14.8 million for the three months ended September 30, 2002 to $18.5 million for the three months ended September 30, 2003 as a result of a combination of increased borrowings and interest rates. The increase in average debt balance during the three months ended September 30, 2003 as compared to the three months ended September 30, 2002, due primarily to borrowings to make acquisitions in 2002 and 2003, accounted for a $2.3 million increase and the increase in interest rates during the three months ended September 30, 2003 as compared to the three months ended September 30, 2002 accounted for a $1.4 million increase.

Income before income taxes increased $18.2 million from $34.6 million for the three months ended September 30, 2002 to $52.8 million for the three months ended September 30, 2003, primarily as a result of the continuing execution of our operating strategy and results from hospitals acquired during 2002 and 2003.

Provision for income taxes increased $6.7 million from $14.4 million for the three months ended September 30, 2002 to $21.1 million for the three months ended September 30, 2003, as a result of the increase in pre-tax income.

Net income was $20.2 million for the three months ended September 30, 2002 compared to net income of $31.7 million for the three months ended September 30, 2003, an increase of $11.5 million.

Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30, 2002

Net operating revenues increased 26.1% to $2,039.6 million for the nine months ended September 30, 2003 from $1,616.9 million for the nine months ended September 30, 2002. Of the $422.7 million increase in net operating revenues, the hospitals acquired in 2002 and 2003, which are not yet included in same-store revenues, contributed approximately $290.2 million, and hospitals we owned throughout both periods

contributed $132.5 million, an increase of 8.2%. The increase from hospitals owned throughout both periods was attributable primarily to rate increases, increased intensity of services, and increases in government reimbursement, offset by a 0.1% decrease in admissions and 1.4% decrease in adjusted admissions.

Inpatient admissions increased by 17.6% for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002. Adjusted admissions increased by 16.8% for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002. On a same-store basis, inpatient admissions decreased by 0.1% for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002, and adjusted admissions decreased by 1.4% for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002. The decrease in same-store inpatient admissions and adjusted admissions was due to the effects of higher unemployment and a continued weak economy, the loss of admissions from physicians called up for military service and the closure of an obstetrics unit, offset by an increase in services offered and the addition of physicians through our focused recruitment program. On a same-store basis, net inpatient revenues increased 6.4% and net outpatient revenues increased 10.4% for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002.

Operating expenses, as a percentage of net operating revenues, increased from 83.5% for the nine months ended September 30, 2002, to 84.4% for the nine months ended September 30, 2003. Salaries and benefits, as a percentage of net operating revenues, decreased from 40.4% for the nine months ended September 30, 2002, to 40.2% for the nine months ended September 30, 2003, primarily as a result of improvements at hospitals owned throughout both periods, offset by the hospitals acquired in 2002 and 2003 having higher salaries and benefits as a percentage of net operating revenues for which reductions have not yet been realized. Provision for bad debts, as a percentage of net operating revenues, increased to 9.6% for the nine months ended September 30, 2003 from 9.3% for the comparable period in 2002, due primarily to an increase in self pay accounts. Supplies as a percentage of net operating revenues decreased to 11.6% for the nine months ended September 30, 2003, from 11.7% for the comparable period in 2002, primarily as a result of improved management of inventory and continued expansion of our Broadlane group purchasing arrangement offset by recent acquisitions having higher supply expense as a percentage of net revenue that have not yet been converted to our contracted vendors. Rent and other operating expenses, as a percentage of net operating revenues, increased from 22.1% for the nine months ended September 30, 2002 to 23.0% for the nine months ended September 30, 2003, due primarily to increases in the use of contract labor and malpractice insurance costs. The strike at Easton Hospital contributed to the increase in contract labor. Adjusted EBITDA margins decreased from 16.5% for the nine months ended September 30, 2002 to 15.6% for the nine months ended September 30, 2003 due to the lower initial adjusted EBITDA margins associated with hospitals acquired in 2002 and 2003. Net income margins increased from 4.4% for the nine months ended September 30, 2002 to 4.7% for the nine months ended September 30, 2003 due to decreases in depreciation and interest as a percentage of net operating revenues offset by the higher operating expenses as a percentage of net operating revenues at the hospitals acquired in 2002 and 2003.

On a same-store basis, operating expenses, as a percentage of net operating revenues, decreased from 83.5% for the nine months ended September 30, 2002 to 83.4% for the nine months ended September 30, 2003, resulting in an increase in our same-store adjusted EBITDA margin from 16.5% for the nine months ended September 30, 2002, to 16.6% for the nine months ended September 30, 2003. We achieved this reduction primarily through efficiency gains resulting in a decrease in salaries and benefits expense of 1.0% of net operating revenue, offset by an increase in other operating expenses due primarily to an increase in malpractice expense of 0.5% of net operating revenues and an increase in contract labor of 0.4% of net operating revenues. On a same-store basis, the improvements made at those hospitals owned throughout both periods led to income from operations increasing from 11.1% of net operating revenues for the nine months ended September 30, 2002 to 11.2% of net operating revenues for the nine months ended September 30, 2003.

Depreciation and amortization increased by $17.6 million from $86.4 million, or 5.3% of net operating revenues, for the nine months ended September 30, 2002 to $104.0 million, or 5.1% of net operating revenues, for the nine months ended September 30, 2003. The five hospitals acquired after January 1, 2002

and the nine hospitals acquired in 2003 accounted for $11.8 million of the increase, facility renovations and purchases of equipment, information system upgrades, and other deferred items, primarily the amortization of physician recruitment costs, accounted for the remaining $5.8 million.

Interest expense, net increased from $48.0 million for the nine months ended September 30, 2002 to $52.1 million for the nine months ended September 30, 2003 as a result of a combination of increased borrowing and decreased interest rates. The increase in average debt balance during the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002, accounted for an increase of $6.7 million. The net increase in average debt balance is the result of additional borrowings to finance hospital acquisitions since the end of the third quarter of 2002. This increase was offset by a decrease of $2.6 million related to a decrease in interest rates from the end of the third quarter of 2002.

Income before income taxes increased $37.5 million from $122.3 million for the nine months ended September 30, 2002 to $159.8 million for the nine months ended September 30, 2003, primarily as a result of the continuing execution of our operating strategy and results from hospitals acquired during 2002 and 2003.

Provision for income taxes increased $13.2 million from $50.7 million for the nine months ended September 30, 2002 to $63.9 million for the nine months ended September 30, 2003, as a result of the increase in pre-tax income. The decrease in the effective tax rate from 41.3% for the nine months ended September 30, 2002 to 40.0% for the nine months ended September 30, 2003, is primarily the result of fluctuations in income reported to separate taxing jurisdictions.

Net income was $95.8 million for the nine months ended September 30, 2003 compared to $71.6 million for the nine months ended September 30, 2002, an increase of $24.2 million.

Net cash provided by operating activities increased $1.5 million to $198.4 million for the nine months ended September 30, 2003 from $196.9 million for the nine months ended September 30, 2002. This increase is attributable to an increase in net income of $24.3 million, a net increase in non-cash expenses of $14.2 million consisting primarily of an increase in depreciation and amortization, offset by net changes in operating assets and liabilities consisting of net cash outflow from the growth in receivables of $68.9 million attributable to an 8.2% growth in same-store revenues and a build up of accounts receivable at current year acquisitions whose accounts receivable were not acquired, and net cash inflow from other assets and liabilities of $32.0 million. The use of cash from investing activities increased from $232.2 million for the nine months ended September 30, 2002 to $441.3 million for the nine months ended September 30, 2003, due primarily to an increase of $192.5 million in cash paid for acquisitions, an increase of $18.7 million in cash paid for purchases of property and equipment and a decrease of $2.1 million in cash paid for other assets. Net cash provided by financing activities increased $28.2 million during the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002 from $144.5 million to $172.8 million, primarily as a result of a decrease in debt repayments, offset by our purchase of common stock through our open market share repurchase program.

Cash expenditures for purchases of facilities were $320.2 million for the nine months ended September 30, 2003 and $127.7 million for the nine months ended September 30, 2002, an increase of $192.5 million. The expenditures during the nine months ended September 30, 2003 included $301.8 million for the nine hospitals acquired and $18.4 million for information systems and other capital to integrate recently acquired hospitals. The expenditures for the nine months ended September 30, 2002 included $115.3 million for the five hospitals acquired during that period and $12.4 million for information systems and other capital to integrate those recently acquired hospitals.

Excluding the cost to construct replacement hospitals and capital leases, our capital expenditures for the nine months ended September 30, 2003 totaled $71.5 million compared to $55.3 million for the nine months ended September 30, 2002. Costs to construct replacement hospitals totaled $29.4 million during the nine months ended September 30, 2003 and $31.6 million, including $5.3 million of capital leases related to the construction projects, for the nine months ended September 30, 2002.

Pursuant to hospital purchase agreements in effect as of September 30, 2003, we are required to complete construct two replacement hospitals, within the next twelve months, with an aggregate estimated construction cost, including equipment, of approximately $60 million. Of this amount, a cumulative total of approximately $34.9 million has been expended through September 30, 2003. We expect to open one replacement facility by the end of 2003 and the other by June 30, 2004. We have also agreed, as a part of the recently completed acquisition in Petersburg, Virginia to build a replacement facility subject to state certificate of need approval. We expect total capital expenditures of approximately $144 to $148 million for the year ended December 31, 2003, including approximately $102 to $104 million for renovation and equipment purchases (which includes amounts pursuant to certain hospital purchase agreements) and approximately $42 to $44 million for construction of replacement hospitals.

Net working capital was $290.7 million at September 30, 2003 compared to $329.3 million at December 31, 2002. The $38.6 million decrease was attributable primarily to the use of cash for the acquisition of nine hospitals, offset primarily by an increase in accounts receivable attributable to an 8.2% growth in same-store revenues and to a build-up of accounts receivable at current year acquisitions whose accounts receivable were not acquired.

On July 16, 2002, we entered into a $1.2 billion senior secured credit facility with a consortium of lenders. The facility replaced our previous credit facility and consists of an $850 million term loan that matures in 2010 (as opposed to 2005 under the previous facility) and a nine-year $350 million revolving credit facility that matures in 2008 (as opposed to 2004 under the previous facility). We may elect from time to time an interest rate per annum for the borrowings under the term loan and revolving credit facility equal to (a) an annual benchmark rate, which will be equal to the greatest of (i) the Prime Rate; (ii) the Base CD Rate plus 100 basis points or (iii) the Federal Funds Effective Rate plus 50 basis points (the "ABR"), plus (1) 150 basis points for the term loan and (2) the Applicable Margin for revolving credit loans or (b) the Eurodollar Rate plus (1) 250 basis points for the term loan and (2) the Eurodollar Applicable Margin for revolving credit loans. We also pay a commitment fee for the daily average unused commitments under the revolving credit facility. The commitment fee is based on a pricing grid depending on the Eurodollar Applicable Margin for revolving credit loans and ranges from 0.375% to 0.500%. The commitment fee is payable quarterly in arrears and on the revolving credit termination date with respect to the available revolving credit commitments. In addition, we will pay fees for each letter of credit issued under the credit facility. The purpose of the facility was to refinance the Company's previous credit agreement, repay certain other indebtedness, and fund general corporate purposes including acquisitions. As of September 30, 2003, our availability for additional borrowings under our revolving credit facility was $333 million. As of September 30, 2003, our weighted-average interest rate under our credit agreement was 3.97%.

On July 2, 2003, we amended our senior secured credit facility by exercising the feature allowing us to add up to $200 million of funded term loans with the same interest rate per annum as our existing term loans.

After borrowing the full $200 million of the incremental term loans, the amended facility consists of $850 million in term loans that mature in 2010, $200 million in incremental term loans that mature in 2011, and a $350 million revolving credit facility that expires in 2008.

The terms of the credit agreement include various restrictive covenants. These covenants include restrictions on additional indebtedness, investments, asset sales, capital expenditures, sale and leasebacks, contingent obligations, transactions with affiliates, and fundamental changes. We would be required to amend the existing credit agreement in order to pay dividends to our shareholders. The covenants also require maintenance of various ratios regarding consolidated total indebtedness, consolidated interest, and fixed charges. The level of these covenants are similar to or more favorable than the credit facility we refinanced.

We have entered into seven separate interest swap agreements to limit the effect of changes in interest rates on a portion of our long-term borrowings. Under three agreements, effective November 23, 2001 and expiring in November 2003, 2004 and 2005, the Company pays interest at fixed rates of 3.37%, 4.03% and 4.46% respectively. Each of the three agreements has a $100 million notional amount of indebtedness. Under the fourth agreement, effective November 4, 2002, we pay interest at a fixed rate of 3.30% on $150 million notional amount of indebtedness. This agreement expires in November 2007. Under the fifth agreement, effective June 13, 2003, we pay interest at a fixed rate of 2.04% on $100 million notional amount of indebtedness. This agreement expires in June 2007. Under the sixth agreement, effective June 13, 2003, we pay interest at a fixed rate of 2.40% on $100 million notional amount of indebtedness. This agreement expires in June 2008. Under the seventh agreement, effective October 3, 2003, we pay interest at a fixed rate of 2.31% on $100 million notional amount of indebtedness. This agreement expires in October 2006. We receive a variable rate of interest on each of these swaps based on the three-month London Inter-Bank Offer ("LIBOR"), excluding the margin paid under the credit facility on a quarterly basis which is currently 250 basis points.

We believe that internally generated cash flows and borrowings under our credit agreement will be sufficient to finance acquisitions, capital expenditures and working capital requirements through the next 12 months. If funds required for future acquisitions exceed existing sources of capital, we believe that favorable terms could be obtained if we were to increase or refinance our credit facilities or obtain additional capital by other means.

We have from time to time sold minority interests in certain of our subsidiaries. The amount of minority interest in equity is included in other long-term liabilities and the minority interest in income or loss is recorded in other operating expense. We do not believe these minority ownerships are material to our financial position or operating results. The balance of minority interests included in long-term liabilities was $8.7 million as of September 30, 2003, and $8.3 million as of December 31, 2002 and the amount of minority interest expense was $1.7 million and $1.9 million for the nine months ended September 30, 2003 and September 30, 2002, respectively.

Legislative and regulatory action has resulted in continuing change in the Medicare and Medicaid reimbursement programs which will continue to limit payment increases under these programs and in some cases implement payment decreases. Within the statutory framework of the Medicare and Medicaid programs, there are substantial areas subject to administrative rulings, interpretations, and discretion which may further affect payments made under those programs, and the federal and state governments might, in the future, reduce the funds available under those programs or require more stringent utilization and quality reviews of hospital facilities. Additionally, there may be a continued rise in managed care programs and future restructuring of the financing and delivery of healthcare in the United States. These events could have an adverse effect on our future financial results.

The healthcare industry is labor intensive. Wages and other expenses increase during periods of inflation and when labor shortages occur in the marketplace. In addition, our suppliers pass along rising costs to us in the form of higher prices. We have implemented cost control measures, including our case and resource management program, to curb increases in operating costs and expenses. We have, to date, offset increases in operating costs by increasing reimbursement for services and expanding services. However, we cannot predict our ability to cover or offset future cost increases.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgements that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgements and uncertainties, and potentially result in materially different results under different assumptions and conditions. We believe that our critical accounting policies are limited to those described below. For a detailed discussion on the application of these and other accounting policies, see Note 1 in the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

Net operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems and provisions of cost-reimbursement and other payment methods. In addition, we are reimbursed by non-governmental payors using a variety of payment methodologies. Amounts we receive for treatment of patients covered by these programs are generally less than the standard billing rates. We account for the differences between the estimated program reimbursement rates and the standard billing rates as contractual adjustments, which we deduct from gross revenues to arrive at net operating revenues. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. We record adjustments to the estimated billings in the periods that such adjustments become known. We account for adjustments to previous program reimbursement estimates as contractual adjustments and report them in future periods as final settlements are determined.

Accounts receivable are reduced by an allowance for amounts that could become uncollectible in the future. Substantially all of our receivables are related to providing healthcare services to our hospitals' patients. Our estimate for the allowance for doubtful accounts is based primarily on our historical collection experience and is computed by applying allowance percentages to amounts included in specific payor and aging categories of patient accounts receivable.

Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill is accounted for under the provisions of Statement of Financial Accounting Standards ("SFAS") No. 141 and SFAS No. 142 and is not amortized. SFAS No. 142 requires goodwill to be evaluated for impairment at the same time every year and when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. We selected September 30th as our annual testing date.

The SFAS No. 142 goodwill impairment model requires a comparison of the book value of net assets to the fair value of the related operations that have goodwill assigned to them. If the fair value is determined to be less than book value, a second step is performed to compute the amount of the impairment. We estimated the

fair values of the related operations using both a debt free discounted cash flow model as well as an adjusted EBITDA multiple model. These models are both based on our best estimate of future revenues and operating costs, based primarily on historical performance and general market conditions, and are subject to review and approval by senior management and the Board of Directors. The cash flow forecasts are adjusted by an appropriate discount rate based on our weighted-average cost of capital. We performed our initial evaluation, as required by SFAS No. 142, during the first quarter of 2002 and the annual evaluation as of September 30, 2002. No impairment was indicated by either evaluation.

We accrue for estimated losses resulting from professional liability claims to the extent they are not covered by insurance. The accrual, which includes an estimate for incurred but not reported claims, is based on historical loss patterns and actuarially determined projections and is discounted to its net present value using a weighted-average risk-free discount rate of 3.4% and 3.85% in 2002 and 2001, respectively. To the extent that subsequent claims information varies from management's estimates, the liability is adjusted currently. Our insurance is underwritten on a "claims-made" basis. Prior to June 1, 2002, substantially all of our professional and general liability risks were subject to a $0.5 million per occurrence deductible; for claims reported from June 1, 2002 through June 1, 2003, these deductibles were $2.0 million per occurrence. Currently, our deductible is $1.0 million per occurrence. Effective June 2003, we formed a wholly owned captive insurance subsidiary. The captive subsidiary generally insures risk from $1 million to $4 million per claim but management may on occasion increase the insured risk at certain hospitals based upon insurance pricing and other factors. Excess insurance for all hospitals is purchased through commercial insurance companies.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB Statement No. 123", SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS No. 148 is effective for annual and interim periods beginning after December 15, 2002. As we have elected not to change to the fair value based method of accounting for stock-based employee compensation, the adoption of SFAS No. 148 will not have an impact on our consolidated financial position or consolidated results of operations. We have included the disclosures in accordance with SFAS No. 148 in the footnotes to the condensed consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities ("VIE's")" ("FIN No. 46"). This interpretation clarifies the application of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," to certain entities in which equity investors 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 No. 46 applies immediately to variable interest entities created after February 1, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. Effective with the quarter beginning July 1, 2003, the interpretation applies immediately to VIE's created before January 31, 2003, and to interests obtained in VIE's before February 1, 2003. Under certain conditions, the effective date has been delayed to the first year or interim period ending after December 15, 2003. We do not expect the adoption of this interpretation to have a material effect on our consolidated financial position or consolidated results of operations. As of September 30, 2003, the Company has no investments in VIE's.

Company does not anticipate a material impact on its results of operations or financial position from the adoption of SFAS No. 149.

Some of the matters discussed in this filing include forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "thinks," and similar expressions are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include the following:

Although we believe that these statements are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Given these uncertainties, prospective investors are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this filing. We assume no obligation to update or revise them or provide reasons why actual results may differ.

We are exposed to interest rate changes, primarily as a result of our credit agreement which bears interest based on floating rates. In order to manage the volatility relating to the market risk, we entered into interest rate swap agreements described under the heading "Liquidity and Capital Resources" in Item 2. We do not anticipate any material changes in our primary market risk exposures in Fiscal 2003. We utilize risk management procedures and controls in executing derivative financial instrument transactions. We do not execute transactions or hold derivative financial instruments for trading purposes. Derivative financial instruments related to interest rate sensitivity of debt obligations are used with the goal of mitigating a portion of the exposure when it is cost effective to do so.

A 1% change in interest rates on variable rate debt would have resulted in interest expense fluctuating approximately $1 million for the three months ended September 30, 2003 and $3 million for the nine months ended September 30, 2003.

As of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer, with the participation of other members of management, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are adequately designed to ensure that the information required to be included in this report has been recorded, processed, summarized and reported on in a timely basis. There have been no changes in our internal control that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the period covered by this report.

On October 6, 2003, the Company received notice from the Office of the Inspector General of the Department of Health and Human Services that the Company's obligations under the Corporate Compliance Agreement entered into in 2000 had been completed. The Company will continue to maintain, develop and enhance its voluntary compliance program system wide.

In May 1999, we were served with a complaint in U.S. ex rel. Bledsoe v. Community Health Systems, Inc., subsequently moved to the Middle District of Tennessee, Case No. 2-00-0083. This qui tam action sought treble damages and penalties under the False Claims Act against us. The Department of Justice did not intervene in this action. The allegations in the amended complaint were extremely general, but involved Medicare billing at our White County Community Hospital in Sparta, Tennessee. The relator in this case also filed a motion seeking from the United States government a portion of the settlement proceeds from our May 2000 settlement with the U.S. Department of Justice, the Office of the Inspector General, and applicable state Medicaid programs. The government vigorously opposed this motion. By order entered on September 19, 2001, the U.S. District Court granted our motion for judgement on the pleadings and dismissed the case, with prejudice. The relator appealed this case to the U.S. Court of Appeals for the Sixth Circuit.

On September 10, 2003, the Sixth Circuit Court of Appeals rendered its decision in this case, affirming in part and reversing in part the District Court's decision to dismiss the case with prejudice. The Court affirmed the lower court's dismissal of certain of plaintiff's claims on the grounds that his allegations had been previously publicly disclosed. In addition, the appeals court agreed that, as to all other allegations, the relator had failed to include enough information to meet the special pleading requirements for fraud under the False Claims Act and the Federal Rules of Civil Procedure. However, the Court returned the case to the District Court to allow the relator another opportunity to amend his complaint in an attempt to plead his fraud allegations with particularity. On October 24, 2003, the government filed a petition for panel rehearing, which was denied by the Sixth Circuit Court of Appeals on November 6, 2003.

Form 8-K dated July 23, 2003 was filed in connection with the issuance of our press release announcing operating results for the quarter ended June 30, 2003.

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.

Delaware		13-3893191
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

			Page
Part I.	Financial Information
	Item 1.	Financial Statements:
		Consolidated Balance Sheets—September 30, 2003 and December 31, 2002	2
		Consolidated Statements of Income—Three and Nine Months Ended September 30, 2003 and September 30, 2002	3
		Consolidated Statements of Cash Flows—Nine Months Ended September 30, 2003 and September 30, 2002	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management's Discussion and Analysis of Financial Condition And Results of Operations	10
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
	Item 4.	Controls and Procedures	22
Part II.	Other Information
	Item 1.	Legal Proceedings	23
	Item 2.	Changes in Securities and Use of Proceeds	23
	Item 3.	Defaults Upon Senior Securities	23
	Item 4.	Submission of Matters to a Vote of Security Holders	23
	Item 5.	Other information	23
	Item 6.	Exhibits and Reports on Form 8-K	24
Signatures			25
Index to Exhibits			26

			September 30, 2003			December 31, 2002
ASSETS
Current assets
	Cash and cash equivalents		$	62,642		$	132,844
	Patient accounts receivable, net of allowance for doubtful accounts of $98,721 and $73,110 at September 30, 2003 and December 31, 2002, respectively			492,122			400,442
	Supplies			70,536			60,456
	Prepaid expenses and taxes			25,416			22,107
	Current deferred income taxes			15,684			15,684
	Other current assets			19,160			16,193

		Total current assets		685,560			647,726

Property and equipment				1,606,773			1,310,738
	Less accumulated depreciation and amortization			(355,974	)		(281,401	)

		Property and equipment, net		1,250,799			1,029,337

Goodwill, net				1,154,481			1,029,975

Other Assets, net				96,885			102,458

Total assets			$	3,187,725		$	2,809,496

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Current maturities of long-term debt		$	17,443		$	18,529
	Accounts payable			125,207			111,677
	Current income taxes payable			50,160			6,559
	Accrued interest			10,775			6,781
	Accrued liabilities			191,251			174,884

		Total current liabilities		394,836			318,430

Long-term debt				1,371,097			1,173,929

Deferred income taxes				65,295			65,120

Other long-term liabilities				49,486			37,712

Stockholders' equity
	Preferred stock, $.01 par value per share, 100,000,000 shares authorized, none issued			—			—
	Common stock, $.01 par value per share, 300,000,000 shares authorized; 99,462,195 shares issued and 98,486,646 shares outstanding at September 30, 2003 and 99,787,034 shares issued and 98,811,485 shares outstanding at December 31, 2002			995			998
	Additional paid-in capital			1,312,286			1,319,370
	Treasury stock, at cost, 975,549 shares at September 30, 2003 and December 31, 2002			(6,678	)		(6,678	)
	Unearned stock compensation			(5	)		(15	)
	Accumulated other comprehensive income (loss)			(4,369	)		(8,314	)
	Retained earnings (deficit)			4,782			(91,056	)

		Total stockholders' equity		1,307,011			1,214,305

Total liabilities and stockholders' equity			$	3,187,725		$	2,809,496

			Three Months Ended September 30,				Nine Months Ended September 30,
			2003		2002		2003		2002
Net operating revenues			$	723,022	$	552,841	$	2,039,592	$	1,616,942

Operating costs and expenses:
	Salaries and benefits			288,328		221,459		820,407		652,838
	Provision for bad debts			70,690		52,351		195,109		149,970
	Supplies			84,229		62,960		237,201		188,865
	Other operating expenses			153,478		114,760		418,215		318,414
	Rent			18,004		13,997		51,060		39,621
	Depreciation and amortization			36,374		28,982		103,974		86,417
	Minority interest in earnings			651		345		1,703		1,861

		Total operating costs and expenses		651,754		494,854		1,827,669		1,437,986

Income from operations				71,268		57,987		211,923		178,956
Interest expense, net				18,468		14,788		52,151		48,039
Loss from early extinguishment of debt				—		8,646		—		8,646

Income before income taxes				52,800		34,553		159,772		122,271
Provision for income taxes				21,117		14,397		63,934		50,698

Net income			$	31,683	$	20,156	$	95,838	$	71,573

Net income per common share:
	Basic		$	0.32	$	0.21	$	0.97	$	0.73

	Diluted		$	0.31	$	0.21	$	0.95	$	0.72

Weighted-average number of shares outstanding:
	Basic			98,409,888		98,533,822		98,437,932		98,349,745

	Diluted			108,123,167		108,512,718		107,979,647		108,371,327

					Nine Months Ended September 30,
					2003			2002
Cash flows from operating activities
	Net income				$	95,838		$	71,573
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation and amortization				103,974			86,417
		Deferred income taxes				175			—
		Minority interest in earnings				1,703			1,861
		Stock compensation expense				10			20
		Other non-cash (income) expenses, net				(43	)		3,368
		Changes in operating assets and liabilities, net of effects of acquistions and divestitures:
			Patient accounts receivable			(79,493	)		(10,616	)
			Supplies, prepaid expenses and other current assets			(8,899	)		(7,644	)
			Accounts payable, accrued liabilities and income taxes			59,097			41,907
			Other			25,994			9,970

				Net cash provided by operating activities		198,356			196,856

Cash flows from investing activities
	Acquisitions of facilities and other related equipment					(320,233	)		(127,693	)
	Purchases of property and equipment					(100,909	)		(81,592	)
	Proceeds from sale of equipment					1,036			440
	Increase in other assets					(21,210	)		(23,399	)

				Net cash used in investing activities		(441,316	)		(232,244	)

Cash flows from financing activities
	Proceeds from issuance of common stock, net of expenses					—			3
	Proceeds from exercise of stock options					1,479			2,364
	Stock repurchases					(14,060	)		—
	Proceeds from minority investments					—			1,770
	Redemption of minority investments					(336	)		(708	)
	Distribution to minority investors					(1,836	)		(863	)
	Borrowings under credit agreement					280,000			905,900
	Repayments of long-term indebtedness					(92,489	)		(763,934	)

				Net cash provided by financing activities		172,758			144,532

Net change in cash and cash equivalents						(70,202	)		109,144
Cash and cash equivalents at beginning of period						132,844			8,386

Cash and cash equivalents at end of period					$	62,642		$	117,530

			Three Months Ended September 30, 2003	Nine Months Ended September 30, 2003
			(expressed in percentages)
Percentage increase from same period prior year:
	Net operating revenues		30.8	26.1
		Admissions	23.5	17.6
		Adjusted admissions(c)	22.3	16.8
		Average length of stay	2.6	—
		ADJUSTED EBITDA(b)	24.0	18.8
		Net Income	57.2	33.9
Same-store percentage increase (decrease) from same period prior year(d):
	Net operating revenues		8.1	8.2
	Admissions		1.0	(0.1)
	Adjusted admissions(c)		(1.0)	(1.4)
	ADJUSTED EBITDA(b)(e)		9.2	8.9
	Income from operations		7.9	10.1

Date: November 10, 2003	COMMUNITY HEALTH SYSTEMS, INC.
		(Registrant)
	By:	/s/ WAYNE T. SMITH Wayne T. Smith Chairman of the Board, President and Chief Executive Officer (principal executive officer)
	By:	/s/ W. LARRY CASH W. Larry Cash Executive Vice President and Chief Financial Officer (principal financial officer)
	By:	/s/ T. MARK BUFORD T. Mark Buford Vice President and Corporate Controller (principal accounting officer)

No.		Description
10.1		Third Amendment, dated July 2, 2003, representing an amendment to the Credit Agreement dated as of July 16, 2002, among CHS/Community Health Systems, Inc., Community Health Systems Inc., certain lenders, Bank of America, N.A., as syndication agent, Wachovia Bank, National Association, as documentation agent and J P Morgan Chase Bank, as administrative agent.
31.1		Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.