CARMIKE CINEMAS, INC.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A

AMENDMENT NO. 1


(Mark One)
[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
		SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004


[ ]		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 000-14993

CARMIKE CINEMAS, INC.

(Exact Name of Registrant as Specified in Its Charter)


DELAWARE (State or Other Jurisdiction of Incorporation or Organization)		58-1469127 (I.R.S. Employer Identification No.)

1301 First Avenue, Columbus, Georgia (Address of Principal Executive Offices)		31901-2109 (Zip Code)

(706) 576-3400
(Registrant’s Telephone Number, Including Area Code)

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

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

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

Common Stock, par value $0.03 per share — 12,152,622 shares outstanding as of August 6, 2004

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32.1 SECTION 906 CERTIFICATION OF THE CEO
EX-32.2 SECTION 906 CERTIFICATION OF THE CFO

EXPLANATORY NOTE

Carmike Cinemas, Inc. (“Carmike” or the “Company”) is filing this Quarterly Report on Form 10-Q/A (the “Form 10-Q/A”) for the three months and 6 months ended June 30, 2004 to reflect the restatement of its consolidated financial statements, the notes thereto, and related disclosures.

During the third quarter of 2004, the Company determined that certain assets under leases originating during prior years and their related financing obligations should have been recorded on the balance sheet. Carmike should have been considered the owner of these assets during construction under the provisions of EITF 97-10 as the Company had paid directly for a substantial portion of the construction cost. Once the construction was completed, the Company was unable to meet the requirements under FAS 98 for sale treatment; therefore the amounts received from the landlord to reimburse the Company for some of the costs of construction should have been recorded as a financing obligation. This obligation should have been amortized over the lease term based on the rent payments designated in the lease contract. This reclassification resulted in a correction of an understatement of property, plant and equipment and financing obligations on the balance sheet, an overstatement of rent expense and an understatement of interest and depreciation expense for the related periods. Additionally, in 2001 two of these leased properties were incorrectly deemed impaired under FASB 121 based on the original classification. The initial impairment calculation did not properly consider the undiscounted cash flows that would have been used had the leases been classified appropriately. Accordingly, the Company's June 30, 2004 and 2003 financial statements have been restated to correct the charge for the cumulative effect of these reclassifications and reversal of the impairment charges.

Also during the third quarter of 2004, the Company completed an analysis of certain prior period bankruptcy-related and other costs, which resulted in the identification of additional tax deductions related to certain of these costs and thus an increase to net operating loss carryforwards as of June 30, 2004. For financial statement purposes, the tax benefit of these additional deductions should have been recognized as of December 31, 2003, the point at which we eliminated the valuation allowance against our other deferred tax assets. Based on this analysis, the Company has restated the previously reported amounts of deferred tax asset as of December 31, 2003 and tax benefit for the year ended December 31, 2003 to increase both amounts by the $4.0 million tax effect of the additional deductions. This adjustment along with the aforementioned lease adjustments is described in the table in Note 13 to the consolidated financial statements.

This Form 10-Q/A has not been updated except as required to reflect the effects of the restatement. This amendment and restatement includes changes to Part I, Items 1, 2 and 4 and Part II, Item 6. Except as identified in the prior sentence, no other items included in the original Form 10-Q have been amended, and such items remain in effect as of the filing date of the original form 10-Q. Additionally, this Form 10-Q/A does not purport to provide an update or a discussion of any other developments at the Company subsequent to the original filing.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except for share data)


	June 30,		December 31,
	2004		2003
	(restated)		(restated)
Assets
Current assets:
Cash and cash equivalents	$	50,273	$	41,236
Accounts and notes receivable		1,697		2,061
Inventories		1,741		1,577
Prepaid expenses		7,233		6,956

Total current assets		60,944		51,830
Other assets:
Investment in and advances to partnerships		6,523		6,952
Deferred income tax asset		65,043		72,036
Other		28,904		20,121

Total other assets		100,470		99,109
Property and equipment, net of accumulated depreciation		456,027		460,323
Goodwill, net of accumulated amortization		23,354		23,354

Total assets	$	640,795	$	634,616

See accompanying notes


	June 30,			December 31,
	2004			2003
	(restated)			(restated)
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	17,241		$	27,362
Accrued expenses		43,098			44,413
Dividends Payable		2,127			—
Current maturities of long-term debt and capital lease obligations		3,071			2,162

Total current liabilities		65,537			73,937
Long-term liabilities:
Long-term debt, less current maturities		248,500			323,050
Capital lease obligations and long-term financing, less current maturities		67,107			67,889
Long-term trade payables		—			7,988

Total long-term liabilities		315,607			398,927
Liabilities subject to compromise		16,323			21,521
Stockholders’ Equity
Preferred Stock, $1.00 par value, authorized 1,000,000 shares, none outstanding as of June 30, 2004 and December 31, 2003, respectively		—			—
Common Stock, $0.03 par value, authorized 20,000,000 shares, issued and outstanding 12,152,622 and 9,151,492 shares as of June 30, 2004 and December 31, 2003, respectively		365			275
Paid-in capital		307,091			214,270
Retained deficit		(64,128	)		(74,314	)

		243,328			140,231

Total liabilities and stockholders’ equity	$	640,795		$	634,616

See accompanying notes

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except per share data)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
	(restated)			(restated)			(restated)			(restated)
Revenues
Admissions	$	88,353		$	87,050		$	167,902		$	156,224
Concessions and miscellaneous		44,743			43,390			82,122			77,430

		133,096			130,440			250,024			233,654
Costs and Expenses
Film exhibition costs		49,103			49,580			85,425			82,013
Concession costs		4,943			5,185			9,069			9,008
Other theatre operating costs		45,984			44,720			90,554			86,943
General and administrative expenses		5,116			3,489			8,881			6,835
Depreciation and amortization expenses		8,628			8,116			17,246			16,231
Gain on sales of property and equipment		(272	)		(62	)		(577	)		(2,502	)

		113,502			111,028			210,598			198,528

Operating income		19,594			19,412			39,426			35,126
Other expenses
Interest expense		5,933			9,634			14,027			20,486
Loss on extinguishment of debt		—			—			9,579			—

Income before reorganization costs and income taxes		13,661			9,778			15,820			14,640
Reorganization costs		(3,205	)		(3,908	)		(3,881	)		(3,808	)

Income before income taxes		16,866			13,686			19,701			18,448
Income tax expense		6,325			—			7,388			—

Net income available for common stock	$	10,541		$	13,686		$	12,313		$	18,448

Weighted average shares outstanding:
Basic		11,991			8,991			11,414			8,991
Diluted		12,830			9,265			12,179			9,259
Net income per common share:
Basic	$	0.88		$	1.52		$	1.08		$	2.05
Diluted	$	0.82		$	1.48		$	1.01		$	1.99
Dividend declared per common share	$	—		$	—		$	0.175		$	—

See accompanying notes

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands)


	Six Months Ended
	June 30,
	2004			2003
	(restated)			(restated)
Operating Activities
Net income	$	12,313		$	18,448
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		17,246			16,231
Deferred Taxes		6,993			—
Reorganization items		(3,413	)		(6,001	)
Loss on extinguishment of debt		1,792			—
Non-cash compensation		3,018			2,487
Gain on real estate sales		(577	)		(2,502	)
Changes in operating assets and liabilities:
Accounts and notes receivable and inventories		629			227
Prepaid expenses		(9,613	)		(1,215	)
Accounts payable		(10,121	)		(12,790	)
Accrued expenses and other liabilities		(3,107	)		(2,812	)

Net cash provided by operating activities		15,160			12,073
Investing Activities
Purchases of property and equipment		(12,945	)		(6,219	)
Proceeds from sales of property and equipment		1,125			5,136

Net cash used in investing activities		(11,820	)		(1,083	)
Financing Activities
Debt:
Additional borrowings		250,000			—
Repayments of long-term debt		(324,500	)		(25,166	)
Repayments of liabilities subject to compromise		(9,115	)		(4,209	)
Repayments of capital leases and long-term financing obligations		(581	)		(512	)
Issuance of common stock, net		89,893			—

Net cash provided by (used in) financing activities		5,697			(29,887	)

Increase (decrease) in cash and cash equivalents		9,037			(18,897	)
Cash and cash equivalents at beginning of period		41,236			53,491

Cash and cash equivalents at end of period	$	50,273		$	34,594

See accompanying notes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
For the Three and Six Months Ended June 30, 2004 and 2003

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

On August 8, 2000, Carmike Cinemas, Inc. (“Carmike”) and its subsidiaries, Eastwynn Theatres, Inc., Wooden Nickel Pub, Inc. and Military Services, Inc. (collectively “the Company”) filed voluntary petitions for relief under Chapter 11 (the “Chapter 11 Cases”) of the United States Bankruptcy Code. In connection with the Chapter 11 Cases, the Company was required to report in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, (“SOP 90-7”). SOP 90-7 requires, among other things, (1) pre-petition liabilities that are subject to compromise be segregated in the Company’s consolidated balance sheet as liabilities subject to compromise and (2) the identification of all transactions and events that are directly associated with the reorganization of the Company in the Consolidated Statements of Operations.

Further, the Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and bankruptcy related items) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes included in Carmike’s Annual Report on Form 10-K for the year ended December 31, 2003.

The Company has identified several significant accounting policies which can be reviewed in detail in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

The Company accounts for its stock-based compensation plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”). Reflected in the Consolidated Statements of Operations for the three months ended June 30, 2004 and 2003 is $1.6 million and $1.2 million, respectively, of stock-based employee compensation cost related to stock grants ($0.8 million from fixed accounting and $0.8 million and $0.4 million, respectively, from variable accounting.) Additionally, reflected in the Consolidated Statements of Operations for the six months ended June 30, 2004 and 2003 is $3.0 million and $2.5 million, respectively, of stock-based employee compensation cost related to stock grants ($1.6 million from fixed accounting and $1.4 million and $0.9 million, respectively, from variable accounting.)

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The

Company has adopted SFAS No. 148, Accounting for Stock Based Compensation-Transition and Disclosure (“SFAS No. 148”). For SFAS No. 148 purposes, the fair value of each option grant and stock based award has been estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


	2004			2003
Expected life (years)		9.0			9.0
Risk-free interest rate		4.40	%		4.34	%
Dividend yield		1.9	%		0.0	%
Expected volatility		0.40			0.40

The estimated fair value of the options granted during 2003 are $12.12 and $14.44 per share. The estimated fair value of the options granted during 2004 are $16.96 per share. Had compensation cost been determined consistent with SFAS No. 123 Accounting for Stock Based Compensation (“SFAS No. 123”), utilizing the assumptions detailed above, the Company’s pro forma net income (loss) and pro forma basic and diluted earnings (loss) per share would have decreased to the following amounts (in thousands, except share data):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004 (as restated)			2003 (as restated)			2004 (as restated)			2003 (as restated)
Net income available for common stock:
As reported	$	10,541		$	13,686		$	12,313		$	18,448
Plus: expense recorded on deferred stock compensation, net of related tax effects		1,018			1,192			1,886			2,489
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(978	)		(1,237	)		(1,902	)		(2,314	)

Pro forma – for SFAS No. 123	$	10,581		$	13,641		$	12,297		$	18,623

Basic net earnings per common share:
As reported	$	0.88		$	1.52		$	1.08		$	2.05
Pro forma – for SFAS No. 123	$	0.88		$	1.52		$	1.08		$	2.07
Diluted net earnings per common share:
As reported	$	0.82		$	1.48		$	1.01		$	1.99
Pro forma – for SFAS No. 123	$	0.82		$	1.47		$	1.01		$	2.01

The Company’s Board of Directors declared a quarterly dividend of $0.175 per share on March 31, 2004. The dividend was paid on August 2, 2004 to stockholders of record as of July 15, 2004. The aggregate amount of this dividend is approximately $2.1 million.

NOTE 2 - OTHER ASSETS

The Company has $8.4 million in surplus long-term real estate assets held for sale as of June 30, 2004. The carrying values of these assets are reviewed periodically as to relative market conditions and are adjusted in accordance with SFAS No. 144 Accounting for the Impairment or Disposal of Long-lived Assets (“SFAS No. 144”). Disposition of these assets is contingent on current market conditions and we cannot be assured that they will be sold at a value equal to or greater than the current carrying value. Other assets are as follows:


	June 30,		December 31,
	2004		2003
Assets held for sale	$	8,391	$	8,932
Loan/lease origination fees		17,714		7,723
Deposits and binders		2,776		3,440
Notes receivable less short-term maturity		23		26

	$	28,904	$	20,121

NOTE 3 - DEBT

Debt consisted of the following (in thousands):


	June 30,			December 31,
	2004			2003
Revolving credit facility	$	—		$	—
Post-bankruptcy term loan		—			168,735
New term loan		99,500			—
10.375% senior subordinated notes		—			154,315
7.500% senior subordinated notes		150,000			—
Industrial revenue bonds; payable in equal installments through May 2006, with interest rates ranging from 5.75% to 7%		513			707

		250,013			323,757
Current maturities		(1,513	)		(707	)

	$	248,500		$	323,050

New Financing Transactions

On February 4, 2004, we completed a public offering of 4,850,000 shares of our common stock (3,000,000 of which were issued and sold by us and 1,850,000 of which were sold by selling stockholders), priced at $32.00 per share. An additional 675,000 shares were sold by certain selling stockholders on February 11, 2004 pursuant to an underwriters’ over-allotment option. Net proceeds to us, after discounts and expenses, were $89.9 million. In addition, we completed an offering of $150.0 million in aggregate principal amount of 7.500% senior subordinated notes due 2014 to institutional investors and entered into new senior secured credit facilities consisting of a $50.0 million 54-month revolving credit facility and a $100.0 million five-year term loan. We used the proceeds from the common stock offering, the 7.500% senior subordinated notes offering and the new term loan credit facility, as well as excess cash, to repay the outstanding balance of $168.7 million under our post-bankruptcy term loan, tender for or redeem $154.3

million of our 10.375% senior subordinated notes, repay $9.1 million of our long-term trade payables and pay related transaction fees and expenses.

NOTE 4 - PROCEEDINGS UNDER CHAPTER 11

On January 31, 2002, the Company emerged from bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. A description of the proceedings under the Chapter 11 Cases is contained in Note 2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Reorganization costs for the three and six month periods ended June 30, 2004 and 2003 are as follows (in thousands):


	Three months ended						Six months ended
	June 30,						June 30,
	2004			2003			2004			2003
Change in estimate for general Unsecured claims	$	(2,908	)	$	(4,621	)	$	(4,070	)	$	(4,623	)
Professional fees and other		(297	)		713			189			815

	$	(3,205	)	$	(3,908	)	$	(3,881	)	$	(3,808	)

NOTE 5 - LIABILITIES SUBJECT TO COMPROMISE

The principal categories of obligations classified as Liabilities Subject to Compromise under the Chapter 11 Cases are identified below. The amounts in total may vary significantly from the stated amounts of proofs of claims filed with the bankruptcy court, and may be subject to future adjustments depending on bankruptcy court action, further developments with respect to potential disputed claims, and determination as to the value of any collateral securing claims or other events. During the three months ended June 30, 2004, certain claims and long-term trade payables were resolved for amounts different from their original claims; these changes resulted in a net change in estimate of liability of $2.9 million.

A summary of the principal categories of claims classified as Liabilities Subject to Compromise at June 30, 2004 and December 31, 2003 are as follows (in thousands):


	June 30, 2004		December 31, 2003
Disputed unsecured claims	$	16,066	$	20,424
Disputed priority claims		257		1,097

	$	16,323	$	21,521

The change in outstanding Liabilities Subject to Compromise results from a change in estimate of $3.2 million and settlements of $2.0 million.

NOTE 6 - INCOME TAXES

As of December 31, 2003 the Company reversed the valuation allowance related to its deferred tax assets as it was determined to be more likely than not that net deferred tax assets would be realized in future periods. At June 30, 2004 the Company has deferred tax assets of approximately $65.0 million remaining. The income tax expense of $6.3 million and $ 7.4

million for the three and six months ended June 30, 2004, respectively, reflects a combined federal and state tax rate of 37.5%.

For tax purposes, any discharge of the liabilities pursuant to the Chapter 11 filing may result in income that is excluded from the Company’s taxable income. However, certain of the Company’s tax attributes, including net operating loss carryforwards, may be reduced by the amount of any cancellation of debt income. To the extent the amount excluded exceeds these tax attributes, the tax basis in the Company’s property must be reduced by the amount of the excluded cancellation of debt income.

After taking into account the taxable income for the three months ended June 30, 2004 and the Company’s net operating loss carryovers available, the Company has federal and state net operating loss carryovers of approximately $79.3 million which begin to expire in the year 2020.

NOTE 7 - STOCK PLANS

Upon emergence from Chapter 11, the Company’s Board of Directors approved a new management incentive plan, the Carmike Cinemas, Inc. 2002 Stock Plan (the “2002 Stock Plan”). The Board of Directors has approved the grant of 780,000 shares under the 2002 Stock Plan to Michael W. Patrick, the Company’s Chief Executive Officer. Pursuant to the terms of Mr. Patrick’s employment agreement dated January 31, 2002 these shares will be delivered in three equal installments on January 31, 2005, 2006 and 2007 unless, prior to the delivery of any such installment, Mr. Patrick’s employment is terminated for Cause (as defined in his employment agreement) or he has violated certain covenants set forth in such employment agreement. In May 2002, the Company’s Stock Option Committee (which administered the 2002 Stock Plan prior to August 2002) approved grants of the remaining 220,000 shares to a group of seven other members of senior management. These shares are to be earned over a three year period, commencing with the year ended December 31, 2002, with the shares being earned as the executive achieves specific performance goals set for the executive to be achieved during each of these years. In some instances the executive may earn partial amounts of his or her stock grant based on graded levels of performance. Shares earned each year will vest and be receivable approximately two years after the calendar year in which they were earned, provided, with certain exceptions, the executive remains an employee of the Company. One of the seven grants to senior executives includes a grant of 35,000 shares to a former employee of the Company. Pursuant to an agreement with the former employee, the Company will deliver to the former employee the 17,000 shares earned in connection with his performance in 2002. These 17,000 shares shall vest on January 31, 2005. Of the 220,000 shares granted to members of senior management, 69,250 shares were earned on December 31, 2002 and 14,250 shares were forfeited. However, the Compensation Committee (renamed the Compensation, Nominating and Corporate Governance Committee subsequent to December 31, 2003) approved two additional grants of 5,500 shares to two members of senior management on March 7, 2003, which shares are deemed to be earned and subject only to vesting requirements. For the year ended December 31, 2003, 62,980 shares were earned and 15,520 shares were forfeited. On May 21, 2004, the Compensation, Nominating and Corporate Governance Committee approved one additional grant of 1,130 shares to one member of senior management. Therefore, of the original 220,000 shares granted to members of senior management, 161,360 shares are deemed to have been earned, subject only to vesting requirements, 23,640 shares have been forfeited and 35,000 shares may be earned over the next year. The Company has included in stockholders’ equity $12.7 million and

$9.6 million at June 30, 2004 and December 31, 2003, respectively, related to the 2002 Stock Plan.

On May 31, 2002, the Board of Directors adopted the Carmike Cinemas, Inc. Non-Employee Directors Long-Term Stock Incentive Plan (the “Directors Incentive Plan”), which was approved by the stockholders on August 14, 2002. The purpose of the Directors Incentive Plan is to provide incentives that will attract, retain and motivate qualified and experienced persons for service as non-employee directors of Carmike. There are a total of 75,000 shares reserved under the Directors Incentive Plan. The Board of Directors approved a grant of 5,000 shares each to two independent directors on August 14, 2002. Additionally, the Board of Directors approved stock option grants of 5,000 shares in June 2003 and 5,000 shares in April 2004 for new directors. The option grant price was based on the fair market value of the stock on the date of the grant. These grants of 20,000 shares in the aggregate during 2002, 2003 and 2004 represent the only stock options outstanding under the Directors Incentive Plan at June 30, 2004.

On July 19, 2002, the Board of Directors adopted the Carmike Cinemas, Inc. Employee and Consultant Long-Term Stock Incentive Plan (the “Employee Incentive Plan”), which was approved by the stockholders on August 14, 2002. The purpose of the Employee Incentive Plan is to provide incentives, competitive with those of similar companies, which will attract, retain and motivate qualified and experienced persons to serve as employees and consultants of the Company and to further align such employees’ and consultants’ interest with those of the Company’s Stockholders. There are a total of 500,000 shares reserved under the Employee Incentive Plan. The Company granted an aggregate of 150,000 options pursuant to this plan on March 7, 2003 to three members of senior management. The exercise price for the 150,000 stock options is $21.79 per share, and 75,000 options vest on December 31, 2005 and 75,000 options vest on December 31, 2006. On December 18, 2003, the Company granted an aggregate of 180,000 options to six members of management. The exercise price for the 180,000 options is $35.63 and they vest ratably over three years beginning December 31, 2005 through December 31, 2007.

On March 31, 2004, the Board of Directors adopted the Carmike Cinemas, Inc. 2004 Incentive Stock Plan, which was approved by the stockholders on May 21, 2004. The Compensation, Nominating and Corporate Governance Committee may grant stock options, stock grants, stock units, and stock appreciation rights under the 2004 Incentive Stock Plan to certain eligible employees and to outside directors. There are 830,000 shares of Common Stock reserved for issuance pursuant to grants made under the 2004 Incentive Stock Plan in addition to the 225,000 unissued shares that were previously authorized for issuance under the Employee Incentive Plan and the Directors Incentive Plan which may be forfeited after the effective date of the 2004 Incentive Stock Plan. No further grants may be made under the Employee Incentive Plan or Directors Incentive Plan.

NOTE 8 - EARNINGS PER SHARE

Earnings per share calculations contain dilutive adjustments for shares under the various stock plans discussed in Note 7. The following table reflects the effects of those plans on the earnings per share (in thousands, except for share data).


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2004			2003			2004			2003
	restated			restated			restated			restated
Outstanding shares		12,152			9,089			11,575			9,089
Less restricted stock issued		(161	)		(98	)		(161	)		(98	)

Basic shares outstanding		11,991			8,991			11,414			8,991
Dilutive shares:
Restricted stock		101			45			98			45
Stock grants		560			228			553			222
Stock options		178			1			114			1

		12,830			9,265			12,179			9,259

Earnings per share:
Basic	$	0.88		$	1.52		$	1.08		$	2.05
Diluted	$	0.82		$	1.48		$	1.01		$	1.99

NOTE 9 - CONDENSED FINANCIAL DATA

The Company and its wholly owned subsidiaries have fully, unconditionally, and jointly and severally guaranteed the Company’s obligations under the Company’s 7.500% senior subordinated notes. The Company has several unconsolidated affiliates that are not guarantors of the 7.500% senior subordinated notes.

Condensed consolidating financial data for the guarantor subsidiaries is as follows (in thousands):

Restated Condensed Consolidating Balance Sheets
As of June 30, 2004


	Carmike		Guarantor
	Cinemas, Inc.		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	38,286	$	11,987		$	—		$	50,273
Accounts and notes receivable		1,736		(39	)					1,697
Inventories		492		1,249						1,741
Prepaid expenses		7,426		(193	)					7,233

Total current assets		47,940		13,004			—			60,944
Other assets:
Investment in and advances to partnerships		4,491		2,032						6,523
Investment in subsidiaries		112,600		—			(112,600	)		—
Deferred income tax assets		31,242		33,801						65,043
Other		246,214		13,968			(231,278	)		28,904
Property and equipment, net		108,662		347,365						456,027
Goodwill, net		5,914		17,440						23,354

Total assets	$	557,063	$	427,610		$	(343,878	)	$	640,795

Liabilities and stockholders’ equity
Current liabilities:
Account payable	$	11,060	$	6,181		$	—		$	17,241
Accrued expenses		22,304		20,794						43,098
Dividends payable		2,127		—						2,127
Current maturities of long-term indebtedness, capital lease and long-term financing obligations		1,705		1,366						3,071

Total current liabilities		37,196		28,341			—			65,537
Long-term debt less current maturities		248,500		—						248,500
Capital lease obligations less current maturities		11,716		55,391						67,107
Long-term trade payables		—		—						—
Other		—		231,278			(231,278	)		—
Liabilities subject to compromise		16,323		—						16,323
Stockholders’ equity		243,328		112,600			(112,600	)		243,328

Total liabilities and stockholders’ equity	$	557,063	$	427,610		$	(343,878	)	$	640,795

Restated Condensed Consolidating Statements of Operations
For Three Months Ended June 30, 2004


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Revenues
Admissions	$	17,665		$	70,688		$	—		$	88,353
Concessions and other		15,030			35,959			(6,246	)		44,743

		32,695			106,647			(6,246	)		133,096
Costs and expenses
Film exhibition costs		8,978			40,125						49,103
Concession costs		904			4,039						4,943
Other theatre operating costs		10,144			42,086			(6,246	)		45,984
General and administrative expenses		5,116			—						5,116
Depreciation and amortization expenses		1,929			6,699						8,628
Gain on sales of property and equipment		1			(273	)					(272	)

		27,072			92,676			(6,246	)		113,502

Operating income		5,623			13,971			—			19,594
Interest expense		(511	)		6,444						5,933

Net income before reorganization costs and income taxes		6,134			7,527			—			13,661
Reorganization costs		(3,205	)		—			—			(3,205	)

Income before income taxes & equity in earnings of subsidiaries		9,339			7,527			—			16,866
Income tax expense		3,502			2,823			—			6,325

		5,837			4,704			—			10,541
Equity in earnings of subsidiaries		4,704			—			(4,704	)		—

Net income for common stock	$	10,541		$	4,704		$	(4,704	)	$	10,541

Restated Condensed Consolidating Statements of Operations
For Six Months Ended June 30, 2004


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Revenues
Admissions	$	33,076		$	134,826		$	—		$	167,902
Concessions and other		28,275			65,700			(11,853	)		82,122

		61,351			200,526			(11,853	)		250,024
Costs and expenses
Film exhibition costs		16,046			69,379						85,425
Concession costs		1,671			7,398						9,069
Other theatre operating costs		20,266			82,141			(11,853	)		90,554
General and administrative expenses		8,887			(6	)					8,881
Depreciation and amortization expenses		3,849			13,397						17,246
Gain on sales of property and equipment		(9	)		(568	)					(577	)

		50,710			171,741			(11,853	)		210,598

Operating income		10,641			28,785			—			39,426
Interest expense		712			13,315						14,027
Loss on extinguishment of debt		9,579			—						9,579

Income before reorganization costs and income taxes		350			15,470			—			15,820
Reorganization costs		(3,881	)		—						(3,881	)

Income before income taxes and equity in earnings of subsidiaries		4,231			15,470			—			19,701
Income tax expense		1,587			5,801						7,388

		2,644			9,669			—			12,313
Equity in earnings of subsidiaries		9,669			—			(9,669	)		—

Net Income for common stock	$	12,313		$	9,669		$	(9,669	)	$	12,313

Restated Condensed Consolidating Statements of Cash Flows
For Six Months Quarter Ended June 30, 2004


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	12,313		$	9,669		$	(9,669	)	$	12,313
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,849			13,397			—			17,246
Deferred income taxes		1,523			5,470			—			6,993
Non-cash deferred compensation		3,018			—			—			3,018
Non-cash reorganization items		(3,413	)		—			—			(3,413	)
Loss on extinguishment of debt		1,792			—			—			1,792
Gain on sales of property and equipment		(9	)		(568	)		—			(577	)
Changes in operating assets and liabilities		(2,629	)		(29,252	)		9,669			(22,212	)

Net cash used in operating activities		16,444			(1,284	)		—			15,160
Investing activities
Purchases of property and equipment		(9,394	)		(3,551	)		—			(12,945	)
Proceeds from sale of property and equipment		17			1,108			—			1,125

Net cash provided by (used in) investing activities		(9,377	)		(2,443	)		—			(11,820	)
Financing activities
Additional borrowing, net of debt issuance costs		250,000			—			—			250,000
Repayments of debt		(333,656	)		(540	)		—			(334,196	)
Issuance of common stock, net		89,893			—			—			89,893

Net cash provided by (used in) financing activities		6,237			(540	)		—			5,697

Increase (decrease) in cash and cash equivalents		13,304			(4,267	)		—			9,037
Cash and cash equivalents at beginning of period		24,982			16,254			—			41,236

Cash and cash equivalents at end of period	$	38,286		$	11,987		$	—		$	50,273

Restated Condensed Consolidating Balance Sheets
As of December 31, 2003


	Carmike		Guarantor
	Cinemas, Inc.		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	24,982	$	16,254		$	—		$	41,236
Accounts and notes receivable		1,938		123			—			2,061
Inventories		407		1,170			—			1,577
Prepaid expenses		7,189		(233	)		—			6,956

Total current assets		34,516		17,314			—			51,830
Other assets:
Investment in and advances to partnerships		4,955		1,997			—			6,952
Investment in subsidiaries		102,932		—			(102,932	)		—
Other		297,627		53,363			(258,833	)		92,157
Property and equipment, net		102,974		357,349			—			460,323
Goodwill, net		5,914		17,440			—			23,354

Total assets	$	548,918	$	447,463		$	(361,765	)	$	634,616

Liabilities and stockholders’ equity
Current liabilities:
Account payable	$	15,400	$	11,962		$	—		$	27,362
Accrued expenses		28,021		16,392			—			44,413
Current maturities of long-term indebtedness, capital lease and long-term financing obligations		887		1,275			—			2,162

Total current liabilities		44,308		29,629			—			73,937
Long-term debt less current maturities		323,050		—			—			323,050
Capital lease and long-term financing obligations less current maturities		11,820		56,069			—			67,889
Long-term trade payables		7,988		—			—			7,988
Other		—		258,833			(258,833	)		—
Liabilities subject to compromise		21,521		—			—			21,521
Stockholders’ equity		140,231		102,932			(102,932	)		140,231

Total liabilities and stockholders’ equity	$	548,918	$	447,463		$	(361,765	)	$	634,616

Restated Condensed Consolidating Statements of Operations
For Three Months Ended June 30, 2003


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Revenues
Admissions	$	16,294		$	70,756		$	—		$	87,050
Concessions and other		15,103			35,091			(6,804	)		43,390

		31,397			105,847			(6,804	)		130,440
Costs and expenses
Film exhibition costs		9,161			40,419						49,580
Concession costs		908			4,277						5,185
Other theatre operating costs		10,082			41,442			(6,804	)		44,720
General and administrative expenses		3,493			(4	)					3,489
Depreciation and amortization expenses		1,772			6,344						8,116
(Gain)/loss on sales of property and equipment		(78	)		16						(62	)

		25,338			92,494			(6,804	)		111,028

Operating income		6,059			13,353			—			19,412
Interest expense		1,877			7,757						9,634

Net income before reorganization costs and income taxes		4,182			5,596			—			9,778
Reorganization costs		(3,908	)		—						(3,908	)

Income before income taxes and equity in earnings of subsidiaries		8,090			5,596			—			13,686
Income tax expense		—			—						—

		8,090			5,596			—			13,686
Equity in earnings of subsidiaries		5,596						(5,596	)		—

Net income for common stock	$	13,686		$	5,596		$	(5,596	)	$	13,686

Restated Condensed Consolidating Statements of Operations
For Six Months Ended June 30, 2003


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Revenues
Admissions	$	30,211		$	126,013		$	—		$	156,224
Concessions and other		27,054			62,038			(11,662	)		77,430

		57,265			188,051			(11,662	)		233,654
Costs and expenses
Film exhibition costs		15,231			66,782						82,013
Concession costs		1,517			7,491						9,008
Other theatre operating costs		19,955			78,650			(11,662	)		86,943
General and administrative expenses		6,839			(4	)					6,835
Depreciation and amortization expenses		3,778			12,453						16,231
Gain on sales of property and equipment		(749	)		(1,753	)					(2,502	)

		46,571			163,619			(11,662	)		198,528

Operating income		10,694			24,432			—			35,126
Interest expense		5,172			15,314						20,486

Net income before reorganization costs and income taxes		5,522			9,118			—			14,640
Reorganization costs		(3,808	)		—						(3,808	)

Income before income taxes and equity in earnings of subsidiaries		9,330			9,118			—			18,448
Income tax expense		—			—						—

		9,330			9,118			—			18,448
Equity in earnings of subsidiaries		9,118			—			(9,118	)		—

Net income for common stock	$	18,448		$	9,118		$	(9,118	)	$	18,448

Restated Condensed Consolidating Statements of Cash Flows
For Six Months Ended June 30, 2003


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	18,448		$	9,118		$	(9,118	)	$	18,448
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		3,778			12,453			—			16,231
Non-cash deferred compensation		2,487			—			—			2,487
Non-cash reorganization items		(6,001	)		—			—			(6,001	)
Gain on sales of property and equipment		(749	)		(1,753	)		—			(2,502	)
Changes in operating assets and liabilities		(4,283	)		(21,425	)		9,118			(16,590	)

Net cash provided by (used in) operating activities		13,680			(1,607	)		—			12,073
Investing activities								—
Purchases of property and equipment		(811	)		(5,408	)		—			(6,219	)
Proceeds from sale of property and equipment		1,852			3,284			—			5,136

Net cash provided by investing activities		1,041			(2,124	)		—			(1,083	)
Financing activities								—
Additional borrowing, net of debt issuance costs		—			—			—			—
Repayments of debt		(29,392	)		(495	)		—			(29,887	)

Net cash used in financing activities		(29,392	)		(495	)		—			(29,887	)

Increase (decrease) in cash and cash equivalents		(14,671	)		(4,226	)		—			(18,897	)
Cash and cash equivalents at beginning of period		39,788			13,703			—			53,491

Cash and cash equivalents at end of period	$	25,117		$	9,477		$	—		$	34,594

NOTE 10 LEGAL PROCEEDINGS.

From time to time, we are involved in routine litigation and legal proceedings in the ordinary course of our business, such as personal injury claims, employment matters, contractual disputes and claims alleging ADA violations. The company has established a reserve of $1.0 million for potential litigation. Currently, we do not have any pending litigation or proceedings that we believe will have a material adverse effect, either individually or in the aggregate, upon us. In addition, we emerged from bankruptcy under chapter 11 on January 31, 2002.

Five current and three former employees at one of our theatres recently filed charges of discrimination against us with the U.S. Equal Employment Opportunity Commission, or the EEOC. These employees alleged that they were sexually harassed by a supervisor over a nine month period in 2003. Unknown to us during the time he was employed by Carmike, the supervisor had a criminal record relating to indecent liberties with a minor. On June 18, 2004, the EEOC issued determinations and invitations to conciliate in connection with all eight charges. In each of the eight cases, the EEOC determined that there is reasonable cause to believe that the charging parties, as well as the other male employees at the theatre during the nine month period, were subjected to a sexually hostile work environment in violation of Title VII of the Civil Rights Act of 1964. We recently participated in a conciliation with the EEOC, the charging parties and their counsel. However, none of the charges or the potential class claims were resolved during

the conciliation. The EEOC has yet to determine whether to file a lawsuit against us on behalf of the charging parties and possible additional putative class members or to issue right-to-sue notices to the charging parties.

We are prepared to defend these claims vigorously and believe that resolution of these claims will not have a material adverse effect on our business or financial position. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may have a material adverse effect on our results of operation in a particular period.

NOTE 11- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

As of June 30, 2004, there are no recent announcements which impact the Company’s financial statements.

NOTE 12 - RECLASSIFICATIONS

Certain amounts in the accompanying consolidated financial statements have been reclassified to conform to the current period’s presentation.

NOTE 13 – RESTATEMENT

During the third quarter of 2004, the Company determined that certain assets under leases originating during prior years and their related financing obligations should have been recorded on the balance sheet. Carmike should have been considered the owner of these assets during construction under the provisions of EITF 97-10 as the Company had paid directly for a substantial portion of the construction cost. Once the construction was completed, the Company was unable to meet the requirements under FAS 98 for sale treatment; therefore the amounts received from the landlord to reimburse the Company for some of the costs of construction should have been recorded as a financing obligation. This obligation should have been amortized over the lease term based on the rent payments designated in the lease contract. This reclassification resulted in a correction of an understatement of property, plant and equipment and financing obligations on the balance sheet, an overstatement of rent expense and an understatement of interest and depreciation expense for the related periods. Additionally, in 2001 two of these leased properties were incorrectly deemed impaired under FASB 121 based on the original classification. The initial impairment calculation did not properly consider the undiscounted cash flows that would have been used had the leases been classified appropriately. Accordingly, the Company’s December 31, 1999, 2000, 2001, 2002 and 2003 financial statements have been restated to correct the charge for the cumulative effect of these reclassifications and reversal of the impairment charges.

December 31, 2003 and tax benefit for the year ended December 31, 2003 to increase both such amounts by the $4.0 million tax effect of the additional deductions. This adjustment, along with the aforementioned lease adjustment is reflected in the table below.

The Consolidated Balance Sheet (unaudited) as of December 31, 2003, included in this Quarterly Report on Form 10-Q reflects the restatement as discussed in Note 17 to the Consolidated Financial Statements reported in Form 10-K/A, Amendment No. 1 dated December 31, 2003.

The effect of this restatement on earnings per common share was as follows:


	Basic		Diluted
For the three months ended June 30,
2004	$	0.01	$	0.01
2003	$	0.02	$	0.03
For the six months ended June 30,
2004	$	0.03	$	0.02
2003	$	0.05	$	0.04


	As previously
	reported			As restated
2004
Consolidated Balance Sheet (unaudited)
As of June 30, 2004
Prepaid expenses	$	10,991		$	7,233
Deferred income taxes		67,034			65,043
Other assets		31,070			28,904
Property and equipment, net of accumulated depreciation		417,575			456,027
Total assets	$	610,258		$	640,795
Accrued expenses	$	43,085		$	43,098
Current maturities of long-term indebtedness, capital leases and long-term financing obligations		2,789			3,071
Capital lease and long-term financing obligations, less current maturities		50,799			67,107
Retained deficit		(78,062	)		(64,128	)
Total liabilities and stockholders’ equity	$	610,258		$	640,795
Consolidated Statements of Operations (unaudited)
For the three months ended June 30, 2004
Other theatre operating costs	$	47,316		$	45,984
Depreciation and amortization expenses		8,263			8,628
Operating income		18,627			19,594
Interest expense		5,215			5,933
Income before income taxes		16,617			16,866
Income tax expense		6,232			6,325
Net income available for common stockholders	$	10,385		$	10,541
Net income per common share
Basic	$	0.87		$	0.88
Diluted	$	0.81		$	0.82


	As previously
	reported			As restated
Consolidated Statements of Operations (unaudited)
For the six months ended June 30, 2004
Other theatre operating costs	$	93,218		$	90,554
Depreciation and amortization expenses		16,516			17,246
Operating income		37,492			39,426
Interest expense		12,590			14,027
Income before income taxes		19,204			19,701
Income tax expense		7,202			7,388
Net income available for common stockholders	$	12,002		$	12,313
Net income per common share
Basic	$	1.05		$	1.08
Diluted	$	0.99		$	1.01
Consolidated Statements of Cash Flows (unaudited)
For the six months ended June 30, 2004
Net cash provided by operating activities	$	15,034		$	15,160
Net cash used in investing activities		(11,775	)		(11,820	)
Net cash provided by financing activities	$	5,778		$	5,697
2003
Consolidated Balance Sheets (unaudited)
As of December 31, 2003
Accounts and notes receivable	$	2,416		$	2,061
Prepaid expenses		10,714			6,956
Deferred income taxes		73,852			72,036
Other assets		23,388			20,121
Property and equipment, net of accumulated depreciation		420,831			460,323
Total assets	$	604,320		$	634,616
Accrued expenses	$	44,412		$	44,413
Current maturities of long-term indebtedness, capital leases and long-term financing obligations		1,902			2,162
Capital lease and long-term financing obligations, less current maturities		51,478			67,889
Retained deficit		(87,938	)		(74,314	)
Total liabilities and stockholders’ equity	$	604,320		$	634,616


	As previously
	reported			As restated
Consolidated Statements of Operations (unaudited)
For the three months ended June 30, 2003
Other theatre operating costs	$	45,868		$	44,720
Depreciation and amortization		7,712			8,116
Operating income		18,668			19,412
Interest expense		9,123			9,634
Net income available for common stockholders	$	13,453		$	13,686
Net income per common share
Basic	$	1.50		$	1.52
Diluted	$	1.45		$	1.48
Consolidated Statements of Operations (unaudited)
For the six months ended June 30, 2003
Other theatre operating costs	$	89,207		$	86,943
Depreciation and amortization		15,423			16,231
Operating income		33,670			35,126
Interest expense		19,463			20,486
Net income available for common stockholders	$	18,015		$	18,448
Net income per common share
Basic	$	2.00		$	2.05
Diluted	$	1.95		$	1.99
Consolidated Statements of Cash Flows (unaudited)
For the six months ended June 30, 2003
Net cash provided by operating activities	$	11,936		$	12,073
Net cash used in investing activities		(993	)		(1,083	)
Net cash used in financing activities	$	(29,840	)	$	(29,887	)

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

The unaudited consolidated interim financial statements as of June 30, 2004 and for the three and six months periods ended June 30, 2004, included in this Quarterly Report on Form 10-Q/A, have been restated as discussed in Note 12 to the Consolidated Financial Statements. For purposes of this Form 10-Q/A, and in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, each item of the Form 10-Q for the quarter ended June 30, 2004, as originally filed with the Commission on August 12, 2004 (the “Original Form 10-Q”) that was affected by the restatement has been amended to the extent affected and restated in its entirety. The disclosure contained in the Original Form 10-Q has not been updated or modified except for updates made to Part I, Items 1, 2 and 4 and Part II, Item 6, solely to reflect the impact of the restatement and related matters. See Note 13 to the Consolidated Financial Statements contained in this Form 10-Q/A for more specific information on the restatement.

EMERGENCE FROM CHAPTER 11

On January 4, 2002, the United States Bankruptcy Court for the District of Delaware entered an order confirming our Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated as of November 14, 2001 (the “Plan”). The Plan became effective on January 31, 2002. A description of the Plan is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003 under the caption “Our Reorganization.”

RESULTS OF OPERATIONS

Comparison of Three and Six Months Ended June 30, 2004 and 2003

Revenues. Total revenues for the three months ended June 30, 2004 increased 2.1% to $133.1 million from $130.4 million for the three months ended June 30, 2003. The increase in revenue is attributable to higher average admission and concession prices, offset by a 3.2% decrease in attendance. Our average admission price was $5.16 for the three months ended June 30, 2004 compared to $4.92 for the three months ended June 30, 2003. The average concession sale per patron was $2.42 for the three months ended June 30, 2004 compared to $2.22 for the three months ended June 30, 2003. Attendance per average screen was 7,709 for the three months ended June 30, 2004 compared to 7,855 for the three months ended June 30, 2003.

Total revenues for the six months ended June 30, 2004 increased 7.0% to $250.0 million from $233.7 million for the three months ended June 30, 2003. The increase in revenue is attributable to a 2.2% increase in attendance as well as higher average admission and concession prices. Our average admission price was $5.15 for the six months ended June 30, 2004 compared to $4.89 for the six months ended June 30, 2003. The average concession sale per patron was $2.30 for the six months ended June 30, 2004 compared to $2.19 for the six months ended June 30, 2003. Attendance per average screen was 14,662 for the six months ended June 30, 2004 compared to 14,163 for the six months ended June 30, 2003.

We operated 291 theatres with 2,229 screens at June 30, 2004 compared to 302 theatres with 2,253 screens at June 30, 2003.

Film exhibition costs, concession costs and other theatre operating costs. Film exhibition costs for the three months ended June 30, 2004 decreased 1.0% to $49.1 million from $49.6 million for the three months ended June 30, 2003 due to lower terms with distributors offset slightly by increased sales volume associated with the higher admission prices. As a percentage of admissions revenue, film exhibition costs were 55.6% for the three months ended June 30, 2004 as compared to 57.0% for the three months ended June 30, 2003. Concessions costs for the three months ended June 30, 2004 decreased 5.8% to $4.9 million from $5.2 million for the three months ended June 30, 2003 due to lower attendance and cost controls. As a percentage of concessions and miscellaneous revenues, concession costs were 11.0% for the three months ended June 30, 2004 as compared to 11.9% for the three months ended June 30, 2003. Other theatre operating costs for the three months ended June 30, 2004 increased 2.9% to $46.0 million from $44.7 million for the three months ended June 30, 2003 due to increased rent expense, as well as the establishment of a reserve of $1.0 million for potential litigation. For more information concerning this reserve see Note 10- Legal Proceedings of the Notes to Consolidated Financial Statements.

Film exhibition costs for the six months ended June 30, 2004 increased 4.1% to $85.4 million from $82.0 million for the six months ended June 30, 2003 due to increased sales volume associated with higher attendance and higher admissions prices. As a percentage of admissions revenue, film exhibition costs were 50.9% for the six months ended June 30, 2004 as compared to 52.5% for the six months ended June 30, 2003. Concessions costs for the six months ended June 30, 2004 were relatively flat at $9.1 million compared to $9.0 million for the six months ended June 30, 2003. As a percentage of concessions and miscellaneous revenues, concession costs were 11.0% for the six months ended June 30, 2004 as compared to 11.6% for the six months ended June 30, 2003. Other theatre operating costs for the six months ended June 30, 2004 increased 4.3% to $90.6 million from $86.9 million for the six months ended June 30, 2003 due to higher attendance and increased rent expense, as well as the establishment of a reserve of $1.0 million for potential litigation. For more information concerning this reserve see Note 10- Legal Proceedings of the Notes to Consolidated Financial Statements.

General and administrative expenses. General and administrative expenses for the three months ended June 30, 2004 increased 45.7% to $5.1 million from $3.5 million for the three months ended June 30, 2003. The increases are due to non-cash deferred compensation expenses related to the 2002 Stock Plan, as well as additional professional fees related to Sarbanes-Oxley compliance and overall increases in other expenses. Expenses relating to the 2002 Stock Plan for the three months ended June 30, 2004 and 2003 were $1.6 million and $1.2 million, respectively.

General and administrative expenses for the six months ended June 30, 2004 increased 30.9% to $8.9 million from $6.8 million for the six months ended June 30, 2003. The increases are due to non-cash deferred compensation expenses related to the 2002 Stock Plan , as well as additional professional fees related to Sarbanes-Oxley compliance and overall increases in other expenses. Expenses relating to the 2002 Stock Plan for the three months ended June 30, 2004 and 2003 were $3.0 million and $2.5 million, respectively.

Depreciation and amortization expenses. Depreciation and amortization for the three months ended June 30, 2004 increased 6.2% to $8.6 million from $8.1 million for the three months ended June 30, 2003. This increase reflects the effect of purchases of fixed assets during the latter portion of 2003 and first half of 2004.

Depreciation and amortization for the six months ended June 30, 2004 increased 6.2% to $17.2 million from $16.2 million for the three months ended June 30, 2003. This increase reflects the effect of purchases of fixed assets during the latter portion of 2003 and first half of 2004.

Gain on sales of property and equipment. Gain on sales of property and equipment for the three months ended June 30, 2004 amounted to $272,000 compared to $62,000 for the three months ended June 30, 2003. This increase was due to higher sales of surplus property. We sold two previously closed properties during the three months ended June 30, 2004 compared to one property during the three months ended June 30, 2003.

Gain on sales of property and equipment for the six months ended June 30, 2004 amounted to $577,000 compared to $2.5 million for the six months ended June 30, 2003. This decrease was due to lower sales of surplus property. We sold two previously closed theatres and one parcel of land during the six months ended June 30, 2004 compared to six theatres and one parcel of land during the six months ended June 30, 2003.

Operating Income. Operating income for the three months ended June 30, 2004 increased 1.0% to $19.6 million compared to $19.4 million for the three months ended June 30, 2003. As a percentage of revenues, the operating income for the three months ended June 30, 2004 was 14.7% compared to 14.9% for the three months ended June 30, 2003.

Operating income for the six months ended June 30, 2004 increased 12.3% to $39.4 million compared to $35.1 million for the six months ended June 30, 2003. As a percentage of revenues, the operating income for the six months ended June 30, 2004 was 15.8% compared to 15.0% for the six months ended June 30, 2003.

Interest expense. Interest expense for the three months ended June 30, 2004 decreased 38.5% to $5.9 million from $9.6 million for the three months ended June 30, 2003. The decrease is related directly to lower indebtedness and interest rates obtained through our debt refinancing, as well as interest reductions created by lowering estimates on outstanding Liabilities Subject to Compromise.

Interest expense for the six months ended June 30, 2004 decreased 31.7% to $14.0 million from $20.5 million for the six months ended June 30, 2003. The decrease is related directly to lower indebtedness and interest rates obtained through our debt refinancing, as well as interest reductions created by lowering estimates on outstanding Liabilities Subject to Compromise.

Loss on extinguishment of debt. On February 4, 2004, the Company refinanced its debt which caused the write-off of $1.8 million of loan fees related to the post-bankruptcy credit facilities and a pre-payment premium on the retirement of the 10.375% senior subordinated notes of $7.8 million.

Income tax expense. Reflecting the reversal of the deferred tax asset valuation allowance at December 31, 2003, we recognized an income tax expense of $ 6.3 million for the three months ended June 30, 2004, representing a combined federal and state tax rate of 37.5%, compared to no income tax expense for the three months ended June 30, 2003.

We recognized an income tax expense of $ 7.4 million for the six months ended June 30, 2004, representing a combined federal and state tax rate of 37.5%, compared to no income tax expense for the six months ended June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Our revenues are collected in cash and credit card payments. Because we receive our revenue in cash prior to the payment of related expenses, we have an operating “float” which partially finances our operations. Our current liabilities exceeded our current assets by $4.6 million as of June 30, 2004 compared to $22.1 million at December 31, 2003. The decreased deficit recorded as of June 30, 2004 reflects the reduction in current long-term debt through our refinancing that was completed on February 4, 2004. As a component of this debt restructuring, the Company also issued 3.0 million shares of common stock for net proceeds after discounts and expenses of $89.9 million. The proceeds from this offering were used to reduce outstanding debt. The deficit will be funded through anticipated operating cash flows as well as the ability to draw from our new revolving credit agreement. At June 30, 2004, we had available borrowing capacity of $50 million under our new revolving credit facility.

During the six months ended June 30, 2004, we made capital expenditures of approximately $12.9 million. Our total budgeted capital expenditures for 2004 are $35.0 million, which we anticipate will be funded by using operating cash flows, available cash from our revolving line of credit and landlord-funded new construction and theatre remodeling, when available. We expect that substantially all of these capital expenditures will continue to consist of new theatre construction and theatre remodeling. Our capital expenditures for any new theatre generally precede the opening of the new theatre by several months. In addition, when we rebuild or remodel an existing theatre, the theatre must be closed, which results in lost revenue until the theatre is reopened. Therefore, capital expenditures for new theatre construction, rebuilds and remodeling in a given quarter may not result in revenues from the new theatre or theatres for several quarters.

Net cash provided by operating activities was $15.2 million for the six months ended June 30, 2004 compared to $12.1 million for the six months ended June 30, 2003. This change is principally due to operating income driven by higher revenues. Net cash used in investing activities was $11.8 million for the six months ended June 30, 2004 compared to $1.1 million for the six months ended June 30, 2003. For the six months ended June 30, 2004 net cash provided by financing activities was $5.7 million compared to net cash used in financing activities of $29.9 million for the six months ended June 30, 2003 as a result of our refinancing.

Our liquidity needs are funded by operating cash flow, sales of surplus assets, availability under our new credit agreements and short term float. The exhibition industry is very seasonal with the studios normally releasing their premiere film product during the holiday season and summer months. This seasonal positioning of film product makes our needs for cash vary significantly from period to period. Additionally, the ultimate performance of the film product, any time during the calendar year, will have the most dramatic impact on our cash needs.

Our ability to service our indebtedness will require a significant amount of cash. Our ability to generate this cash will depend largely on future operations. Based upon our current level of operations, we believe that cash flow from operations, available cash, sales of surplus assets and borrowings under our new credit agreements will be adequate to meet our liquidity needs.

However, the possibility exists that, if our liquidity needs are not met and we are unable to service our indebtedness, we could come into technical default under any of our debt instruments, causing the agents or trustees for those instruments to declare all payments due immediately or, in the case of our senior debt, to issue a payment blockage to the more junior debt.

We cannot make assurances that our business will continue to generate significant cash flow to fund our liquidity needs. We are dependent to a large degree on the public’s acceptance of the films released by the studios. We are also subject to a high degree of competition and low barriers of entry into our industry. In the future, we may need to refinance all or a portion of our indebtedness on or before maturity. We cannot make assurances that we will be able to refinance any of our indebtedness or raise additional capital through other means, on commercially reasonable terms or at all.

As of June 30, 2004, the Company was in compliance with all of the financial covenants as defined in its debt agreements.

As of June 30, 2004, we did not have any off-balance sheet financing transactions.

SEASONALITY

Typically, movie studios release films with the highest expected revenues during the summer and the holiday period between Thanksgiving and Christmas, causing seasonal fluctuations in revenues. However, movie studios are increasingly introducing more popular film titles throughout the year. In addition, in years where Christmas falls on a weekend day, our revenues are typically lower because our patrons generally have shorter holiday periods away from work or school.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements within the meaning of the federal securities laws. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the SEC or in connection with oral statements made to the press, potential investors or others. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words, “believes,” “expects,” “anticipates,” “plans,” “estimates” or similar expressions. These statements include, among others, statements regarding our strategies, sources of liquidity, the availability of film product and the opening or closing of theatres during 2004.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of our management, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding expected pricing levels, competitive conditions and general economic conditions. These assumptions could prove inaccurate. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

• the availability of suitable motion pictures for exhibition in our markets;

• competition in our markets;

• competition with other forms of entertainment;

• identified weaknesses in internal controls and procedures under Section 404 of the Sarbanes-Oxley Act of 2002.

• the effect of our leverage on our financial condition; and

• other factors, including the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2003 under the caption “Risk Factors.”

We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to various market risks. We have floating rate debt instruments and, therefore, are subject to the market risk related to changes in interest rates. Interest payable under our new term loan agreement is based on a spread over LIBOR or another index.

Interest paid on our debt is largely subject to changes in interest rates in the market. Our revolving credit agreement and our new term loan agreement are based on a structure that is priced over an index or LIBOR rate option. A change of 1.0% in interest rates would raise the effective interest rate by 0.3%.

A substantial number of our theatre leases have increases contingent on changes in the Consumer Price Index (“CPI”). A 1.0% change in the CPI would not have a material effect on rent expense.

ITEM 4. CONTROLS AND PROCEDURES.

The Company maintains disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the regulations of the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, include controls and procedures designed to ensure that information required to be disclosed by the company in the reports we file or submit under the Exchange Act is accumulated and communicated to our Company’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.

On November 15, 2004, we announced that we were delaying the filing of our Form 10-Q for the third quarter ended September 30, 2004 due to our ongoing evaluation of certain lease and other accounting issues related to transactions entered into in prior periods. We are filing this Form 10-Q/A for the quarter ended June 30, 2004 to reflect the restatement of our unaudited consolidated financial statements, the notes thereto, and related disclosures for such quarter. We have filed a Form 10-K/A for the year ended December 31, 2003 to reflect the restatement of our consolidated financial statements, the notes thereto, and related disclosures for the years ended 1999, 2000, 2001, 2002 and 2003. Concurrently with this filing, we intend to file a Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2004 to reflect the restatement of our unaudited consolidated financial statements, the notes thereto and related disclosures for such quarter. These restatements are necessary in order to correct the improper reporting of certain leases as operating leases, rather than as financing obligations, as well as to record an adjustment to our deferred tax asset resulting from the identification of additional tax deductions related to certain bankruptcy-related costs incurred in prior periods.

As required by SEC rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. In making this evaluation, we considered matters relating to the restatement of our consolidated financial statements, including the related weaknesses in our internal control over financial reporting. After consideration of the matters discussed above, we have concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report. Our management believes that the errors giving rise to the restatement related to the reporting of certain leases as operating leases, rather than financing obligations. These errors occurred because of a variety of factors, including limited staffing, lack of communication between the accounting department and the real estate department on lease structure, and the complexity of guidance relating to both the accounting for leases where the lessee has significant involvement in the construction of the project. In reviewing these factors, we determined that revisions were needed to the practices, procedures and processes for our lease accounting. In this regard, we concluded there was a material weakness in our internal controls over financial reporting related to lease accounting.

In order to remediate these weaknesses in internal controls we have reviewed the work load of those individuals responsible for GAAP accounting and reporting, including monitoring of changes in accounting standards in order to ensure that they have adequate time to perform this function properly, and hired additional accounting staff to supplement existing resources. We have also revised the communication procedures and changed personnel in the real estate department to ensure that significant contracts are properly communicated to our financial department. These changes will allow the financial department to be involved in the lease structure prior to the execution of the lease and give the Company opportunities to modify lease terms when appropriate prior to the execution of the lease.

In connection with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we are in the process of documenting and testing our systems of internal controls over financial reporting in order to provide the basis for our evaluation and report on these systems as of the end of our fiscal year. Our financial reporting information systems and our point-of-sale information systems require a significant level of manual controls to ensure the accurate reporting of our results of operations and financial position. Further, we cannot be certain as to the timing of completion of our testing and our ongoing remediation efforts. Accordingly, remediated controls may not be in place for a sufficient time period over which to assess effectiveness, and our

evaluation of internal controls may not be completed in time for our external auditors to complete their assessment on a timely basis. If we are not able to comply with the requirements of Section 404 in a timely manner, the reliability of our internal controls over financial reporting may be impacted.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Our annual meeting of stockholders was held on May 21, 2004. At the meeting, the stockholders voted on the election of eleven directors and the approval of the Carmike Cinemas, Inc. 2004 Incentive Stock Plan.

Proposal One: The results of the voting for eleven directors were as follows:


Director	For		Vote Withheld
Michael W. Patrick		8,345,349		331,719
Elizabeth C. Fascitelli		8,292,347		384,721
Richard A. Friedman		8,292,347		384,721
Alan J. Hirschfield		8,292,308		384,760
John W. Jordan II		8,306,068		371,000
S. David Passman III		8,354,675		322,393
Carl L. Patrick, Jr.		8,292,299		384,769
Kenneth A. Pontarelli		8,292,347		384,721
Roland C. Smith		8,359,525		317,543
Patricia A. Wilson		8,354,675		322,393
David W. Zalaznick		8,297,118		379,950

Proposal Two: The results of the vote for the approval of the Carmike Cinemas, Inc. 2004 Incentive Stock Plan were as follows:


For:	5,215,354	(60.1	%)
Against:	942,402	(10.9	%)
Abstained:	449,869	(5.2	%)
Non-Vote:	2,069,443	(23.8	%)

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Listing of Exhibits


Exhibit
Number		Description
2.1		Debtors’ Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated November 14, 2001 (filed as Exhibit 99 to Carmike’s Current Report on Form 8-K filed November 19, 2001 and incorporated herein by reference).


Exhibit
Number		Description
2.2		Debtors’ Amended Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code, dated November 14, 2001 (filed as Exhibit T-3E1 to Carmike’s Form T-3 filed December 11, 2001 and incorporated herein by reference).

3.1		Amended and Restated Certificate of Incorporation of Carmike Cinemas, Inc. (filed as Exhibit 3.1 to Carmike’s Amendment to Form 8-A filed January 31, 2002 and incorporated herein by reference).

3.2		Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as Exhibit 3.2 to Carmike’s Amendment to Form 8-A filed January 31, 2002 and incorporated herein by reference).

3.3		Amendment No. 1 to the Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as Exhibit 3.2 to Carmike’s Form 10-Q for the quarter ended June 30, 2003 and incorporated herein by reference).

4.1		Indenture, dated as of February 4, 2004, among Carmike Cinemas, Inc., each of the Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as Trustee (filed as Exhibit 4.2 to Carmike’s Current Report on Form 8-K filed February 20, 2004 and incorporated herein by reference).

4.2		Registration Rights Agreement, dated as of February 4, 2004, among Carmike Cinemas, Inc., each of the Guarantors named therein and Goldman, Sachs & Co. (filed as Exhibit 4.3 to Carmike’s Current Report on Form 8-K filed February 20, 2004 and incorporated herein by reference).

4.3		Registration Rights Agreement, dated as of January 31, 2002, by and among Carmike Cinemas, Inc. and certain stockholders (filed as Exhibit 99.3 to Amendment No. 1 to Schedule 13D of Goldman Sachs & Co., et. al., filed February 8, 2002 and incorporated herein by reference).

4.4		Letter Agreement, dated as of November 17, 2003, by and among Carmike Cinemas, Inc. and certain stockholders regarding the Stockholders’ Agreement dated January 31, 2002, as amended, and the Registration Rights Agreement dated January 31, 2002 (filed as Exhibit 4.5 to Carmike’s Form S-1/A (Registration No. 333-90028) filed November 18, 2003 and incorporated herein by reference).

10.1		From of Indemnification Agreement and Schedule of Directors who have entered into such agreement (filed as Exhibit 10.1 to Carmike’s Form S-3 (Registration No. 333-117403) filed July 16, 2004 and incorporated herein by reference.

10.2		First Amendment to Second Amended and Restated Master Lease, dated as of July 12, 2004, between MoviePlex Realty Leasing L.L.C. and Carmike Cinemas, Inc. (filed an exhibit 10.2 to Carmike’s Form S-3 (Registration No. 333-117403) filed July 16, 2004 and incorporated herein by reference.)


Exhibit
Number		Description
10.3		Letter Agreement, dated as of June 23, 2004, by and among Carmike Cinemas, Inc. and Goldman, Sachs & Co. regarding the Registration Rights Agreement dated January 29, 2004 (filed as Exhibit 10.1 to Carmike’s S-4/A (Registration No. 333-115134) filed July 22, 2004 and incorporated herein by reference.

10.4		Carmike Cinemas, Inc. 2004 Stock Incentive Plan (filed as Appendix A to Carmike’s Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders, filed on April 16, 2004 and incorporated herein by reference).

11.1		Computation of per share earnings (provided in Note 8 to the Notes to Consolidated Financial Statements included in this report under the caption “Earnings Per Share”).

31.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

We furnished a Current Report on Form 8-K dated May 12, 2004, reporting information under Items 7 and 12 and including a press release reporting our financial results for the first quarter of 2004.

On February 20, 2004, we filed a Current Report on Form 8-K reporting information under Items 5 and 7.

EXHIBIT INDEX


Exhibit
Number		Description
2.1		Debtors’ Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated November 14, 2001 (filed as Exhibit 99 to Carmike’s Current Report on Form 8-K filed November 19, 2001 and incorporated herein by reference).

2.2		Debtors’ Amended Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code, dated November 14, 2001 (filed as Exhibit T-3E1 to Carmike’s Form T-3 filed December 11, 2001 and incorporated herein by reference).

3.1		Amended and Restated Certificate of Incorporation of Carmike Cinemas, Inc. (filed as Exhibit 3.1 to Carmike’s Amendment to Form 8-A filed January 31, 2002 and incorporated herein by reference).

3.2		Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as Exhibit 3.2 to Carmike’s Amendment to Form 8-A filed January 31, 2002 and incorporated herein by reference).

3.3		Amendment No. 1 to the Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as Exhibit 3.2 to Carmike’s Form 10-Q for the quarter ended June 30, 2003 and incorporated herein by reference).

4.1		Indenture, dated as of February 4, 2004, among Carmike Cinemas, Inc., each of the Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as Trustee (filed as Exhibit 4.2 to Carmike’s Current Report on Form 8-K filed February 20, 2004 and incorporated herein by reference).

4.2		Registration Rights Agreement, dated as of February 4, 2004, among Carmike Cinemas, Inc., each of the Guarantors named therein and Goldman, Sachs & Co. (filed as Exhibit 4.3 to Carmike’s Current Report on Form 8-K filed February 20, 2004 and incorporated herein by reference).

4.3		Registration Rights Agreement, dated as of January 31, 2002, by and among Carmike Cinemas, Inc. and certain stockholders (filed as Exhibit 99.3 to Amendment No. 1 to Schedule 13D of Goldman Sachs & Co., et. al., filed February 8, 2002 and incorporated herein by reference).

4.4		Letter Agreement, dated as of November 17, 2003, by and among Carmike Cinemas, Inc. and certain stockholders regarding the Stockholders’ Agreement dated January 31, 2002, as amended, and the Registration Rights Agreement dated January 31, 2002 (filed as Exhibit 4.5 to Carmike’s Form S-1/A (Registration No. 333-90028) filed November 18, 2003 and incorporated herein by reference).


Exhibit
Number		Description
10.1		From of Indemnification Agreement and Schedule of Directors who have entered into such agreement (filed as Exhibit 10.1 to Carmike’s Form S-3 (Registration No. 333-117403) filed July 16, 2004 and incorporated herein by reference.

10.2		First Amendment to Second Amended and Restated Master Lease, dated as of July 12, 2004, between MoviePlex Realty Leasing L.L.C. and Carmike Cinemas, Inc. (filed as Exhibit 10.2 to Carmike’s Form S-3 (Registration No. 333-117403) filed July 16, 2004 and incorporated herein by reference.)

10.3		Letter Agreement, dated as of June 23, 2004, by and among Carmike Cinemas, Inc. and Goldman, Sachs & Co. regarding the Registration Rights Agreement dated January 29, 2004 (filed as Exhibit 10.1 to Carmike’s S-4/A (Registration No. 333-115134) filed July 22, 2004 and incorporated herein by reference.

10.4		Carmike Cinemas, Inc. 2004 Stock Incentive Plan (filed as Appendix A to Carmike’s Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders, filed on April 16, 2004 and incorporated herein by reference).

11.1		Computation of per share earnings (provided in Note 8 to the Notes to Consolidated Financial Statements included in this report under the caption “Earnings Per Share”).

31.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


		CARMIKE CINEMAS, INC.

Date: December 20, 2004	By:		/s/ Michael W. Patrick

			Michael W. Patrick
			President, Chief Executive Officer and
			Chairman of the Board of Directors

Date: December 20, 2004	By:		/s/ Martin A. Durant

			Martin A. Durant
			Senior Vice President — Finance,
			Treasurer and Chief Financial Officer

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

•		the availability of suitable motion pictures for exhibition in our markets;

•		competition in our markets;


ITEM 2.	CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES.