10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2009

OR

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

For the transition period from              to             

Commission file number 000-14993

CARMIKE CINEMAS, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

1301 First Avenue, Columbus, Georgia	31901-2109
(Address of Principal Executive Offices)	(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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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 — 12,880,504 shares outstanding as of July 20, 2009.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)	3
CONDENSED CONSOLIDATED BALANCE SHEETS	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23
ITEM 4. CONTROLS AND PROCEDURES	23
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	24
ITEM 1A. RISK FACTORS	24
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	24
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	24
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	24
ITEM 5. OTHER INFORMATION	24
ITEM 6. EXHIBITS	25
EXHIBIT INDEX	25
SIGNATURES	26
EX-31.1 SECTION 302 CERTIFICATION OF CEO
EX-31.2 SECTION 302 CERTIFICATION OF CFO
EX-32.1 SECTION 906 CERTIFICATION OF CEO
EX-32.2 SECTION 906 CERTIFICATION OF CFO

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARMIKE CINEMAS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share data)

	June 30, 2009			December 31, 2008
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	17,627		$	10,867
Restricted cash		72			184
Accounts receivable		4,274			4,032
Inventories		2,379			2,373
Prepaid expenses		6,820			5,768
Total current assets		31,172			23,224
Property and equipment:
Land		54,172			55,615
Buildings and building improvements		288,415			290,395
Leasehold improvements		128,227			127,638
Assets under capital leases		60,986			60,986
Equipment		221,517			219,348
Construction in progress		947			629
Total property and equipment		754,264			754,611
Accumulated depreciation and amortization		(336,484	)		(322,805	)
Property and equipment, net of accumulated depreciation		417,780			431,806
Assets held for sale		4,559			3,655
Other		21,922			23,386
Intangible assets, net of accumulated amortization		1,321			1,392
Total assets	$	476,754		$	483,463
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	27,203		$	23,995
Accrued expenses		35,567			28,684
Current maturities of long-term debt, capital leases and long-term financing obligations		4,295			4,497
Total current liabilities		67,065			57,176
Long-term liabilities:
Long-term debt, less current maturities		254,452			270,694
Capital leases and long-term financing obligations, less current maturities		116,923			117,059
Other		13,760			13,286
Total long-term liabilities		385,135			401,039
Commitments and contingencies (Note 6)
Stockholders’ equity:
Preferred Stock, $1.00 par value per share: 1,000,000 shares authorized, no shares issued		—			—
Common Stock, $0.03 par value per share: 20,000,000 shares authorized, 13,283,372 shares issued and 12,880,504 shares outstanding at June 30, 2009, and 13,230,872 shares issued and 12,828,890 shares outstanding at December 31, 2008		395			394
Treasury stock, 402,868 and 401,982 shares at cost, at June 30, 2009 and December 31, 2008, respectively		(10,940	)		(10,938	)
Paid-in capital		285,908			285,430
Accumulated deficit		(250,809	)		(249,638	)
Total stockholders’ equity		24,554			25,248
Total liabilities and stockholders’ equity	$	476,754		$	483,463

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

3

CARMIKE CINEMAS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008			2009			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Admissions	$	88,892		$	76,490		$	170,094		$	154,264
Concessions and other		44,212			40,827			84,812			79,191
Total operating revenues		133,104			117,317			254,906			233,455
Operating costs and expenses:
Film exhibition costs		51,178			43,655			94,456			85,251
Concession costs		4,701			4,415			8,528			8,547
Other theatre operating costs		53,007			46,776			104,242			95,974
General and administrative expenses		3,807			4,647			7,865			10,298
Separation agreement charges (Note 9)		—			—			5,462			—
Depreciation and amortization		8,778			9,128			17,437			18,258
(Gain) loss on sale of property and equipment		(105	)		232			(151	)		243
Total operating costs and expenses		121,366			108,853			237,839			218,571
Operating income		11,738			8,464			17,067			14,884
Interest expense		8,739			10,063			17,754			21,206
Income (loss) from continuing operations before income tax		2,999			(1,599	)		(687	)		(6,322	)
Income tax expense (Note 3)		—			—			—			—
Income (loss) before discontinued operations		2,999			(1,599	)		(687	)		(6,322	)
Loss from discontinued operations (Note 5)		(174	)		(620	)		(484	)		(238	)
Net income (loss) available for common stockholders	$	2,825		$	(2,219	)	$	(1,171	)	$	(6,560	)
Weighted average shares outstanding:
Basic		12,675			12,650			12,672			12,654
Diluted		12,686			12,650			12,672			12,654
Net income (loss) per common share (Basic and Diluted):
Income (loss) from continuing operations	$	0.24		$	(0.13	)	$	(0.05	)	$	(0.50	)
Loss from discontinued operations, net of tax		(0.02	)		(0.05	)		(0.04	)		(0.02	)
Net income (loss) per common share	$	0.22		$	(0.18	)	$	(0.09	)	$	(0.52	)
Dividends declared per share	$	—		$	0.175		$	—		$	0.35

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

4

CARMIKE CINEMAS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended June 30,
	2009			2008
	(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	(1,171	)	$	(6,560	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		17,418			18,507
Amortization of debt issuance costs		1,153			1,164
Stock-based compensation		478			1,305
Other		1,079			812
Gain on sale of property and equipment		(149	)		(247	)
Changes in operating assets and liabilities:
Accounts receivable and inventories		(255	)		189
Prepaid expenses and other assets		(740	)		(729	)
Accounts payable		3,992			(4,382	)
Accrued expenses and other liabilities		7,447			(2,207	)
Net cash provided by operating activities		29,252			7,852
Cash flows from investing activities:
Purchases of property and equipment		(7,116	)		(4,464	)
Release of restricted cash		112			(580	)
Proceeds from sale of property and equipment		1,745			2,760
Net cash used in investing activities		(5,259	)		(2,284	)
Cash flows from financing activities:
Debt activities:
Repayments of long-term debt		(16,398	)		(6,539	)
Repayments of capital lease and long-term financing obligations		(833	)		(1,168	)
Purchase of treasury stock		(2	)		(10	)
Dividends paid		—			(4,487	)
Net cash used in financing activities		(17,233	)		(12,204	)
Increase (decrease) in cash and cash equivalents		6,760			(6,636	)
Cash and cash equivalents at beginning of period		10,867			21,975
Cash and cash equivalents at end of period	$	17,627		$	15,339
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	16,109		$	20,073
Income taxes	$	300		$	—
Non-cash investing and financing activities:
Assets acquired through capital lease obligations	$	—		$	491
Dividends declared not yet paid	$	—		$	2,245
Non-cash purchase of property and equipment	$	76		$	205

The accompanying notes are an integral part of these condensed consolidated financial statements

5

CARMIKE CINEMAS, INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended June 30, 2009 and 2008

(unaudited)

(in thousands except share and per share data)

NOTE 1—BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Carmike Cinemas, Inc. (referred to as “we”, “us”, “our”, and the “Company”) has prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission. This information reflects all adjustments which in the opinion of management are necessary for a fair presentation of the statement of financial position as of June 30, 2009, and the results of operations and cash flows for the three and six month periods ended June 30, 2009 and 2008. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (“2008 Form 10-K”). That report includes a summary of our critical accounting policies. There have been no material changes in our accounting policies during the first six months of 2009. The financial statements include the accounts of the Company’s wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Accounting Estimates

In the preparation of financial statements in conformity with GAAP, management must make certain estimates, judgments and assumptions. These estimates, judgments and assumptions are made when accounting for items and matters such as, but not limited to, depreciation, amortization, asset valuations, impairment assessments, lease classification, stock-based compensation, employee benefits, income taxes, reserves and other provisions and contingencies. These estimates are based on the information available when recorded. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the periods presented. The Company bases its estimates on historical experience, forecasted performance and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company also assesses potential losses in relation to threatened or pending legal matters. If a loss is considered probable and the amount can be reasonably estimated, the Company recognizes an expense for the estimated loss. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are recognized in the period they are realized.

Subsequent Events

We have evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through August 3, 2009, the day the financial statements were issued.

Discontinued Operations

The results of operations for theatres that have been disposed of or classified as held for sale are eliminated from the Company’s continuing operations and classified as discontinued operations for each period presented within the Company’s condensed consolidated statements of operations. Theatres are reported as discontinued operations when the Company no longer has continuing involvement in the theatre operations and the cash flows have been eliminated, which generally occurs when the Company no longer has operations in a given market. See Note 5 – Discontinued Operations.

Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company reviews the carrying value of long-lived assets for potential impairment. This review is performed on a quarterly basis or when events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. Such events include, but are not limited to, the entrance of new competition into the market, decisions to close a theatre, or a significant decrease in the operating performance of the long-lived asset. For those assets that are identified as potentially being impaired, if the undiscounted future cash flows from such assets are less than the carrying value, the Company recognizes a loss equal to the difference between the carrying value and the asset’s fair value. The fair value of the assets is primarily estimated using the discounted future cash flow of the assets with consideration of other valuation techniques.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair values, establishes a framework for measuring fair value and expands disclosures about fair value

6

measurements. The provisions of SFAS 157 were effective as of January 1, 2008 for the Company’s financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in the Company’s consolidated financial statements. For nonfinancial assets and liabilities, except those items recognized or disclosed at fair value on an annual or more frequent basis, FASB Staff Position No. FAS 157-2 (“FSP 157-2”) permits companies to adopt the provisions of SFAS 157 for fiscal years beginning after November 15, 2008. The provisions of SFAS 157 were effective as of January 1, 2009 for the Company’s nonfinancial assets and liabilities. There were no material changes in the Company’s valuation methodologies, techniques or assumptions for financial and nonfinancial assets and liabilities as a result of the adoption of SFAS 157 for such items.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”), which requires the acquirer in a business combination to measure all assets acquired and liabilities assumed at their acquisition date fair value. SFAS 141(R) applies whenever an acquirer obtains control of one or more businesses. The new standard also requires the following in a business combination:

• acquisition related costs, such as legal and due diligence costs, be expensed as incurred;

• acquirer shares issued as consideration be recorded at fair value as of the acquisition date;

• contingent consideration arrangements be included in the purchase price allocation at their acquisition date fair value;

• with certain exceptions, pre-acquisition contingencies be recorded at fair value:

• negative goodwill be recognized as income rather than as a pro rata reduction of the value allocated to particular assets;

• restructuring plans be recorded in purchase accounting only if the requirements in FASB statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”), are met as of the acquisition date;

• adjustments to deferred income taxes, after the purchase accounting allocation period, will be included in income rather than as an adjustment to goodwill.

SFAS 141(R) requires prospective application for business combinations consummated in fiscal years beginning on or after December 15, 2008.

In April 2009, the FASB issued FSP SFAS 107-b and Accounting Principles Board (“APB”) Opinion 28-a, “Interim Disclosures about Fair Value of Financial Instruments” (“SFAS 107-b and APB 28-a”). This FASB Staff Position (“FSP”) amends SFAS No. 107, “Disclosures about Fair Values of Financial Instruments,” to require disclosures about fair value of financial instruments in interim financial statements. This FSP is effective for interim periods ending after June 15, 2009, but early adoption was permitted for interim periods ending after March 15, 2009. The adoption of SFAS 107-b and APB 28-a did not have a significant impact on the Company’s disclosures. Refer to Note 7 – Financial Instruments. An entity that elects to early adopt SFAS 107-b must also early adopt SFAS 157-e, “Determining Whether a Market is not Active and a Transaction is Not Distressed” (“SFAS 157-e”) and SFAS 115-a, “Recognition and Presentation of Other-Than Temporary Impairments” (“SFAS 115-a”). The adoption of SFAS 157-e and SFAS 115-a did not have an impact on the Company’s consolidated results of operations, financial position or valuation methodologies.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”), that establishes general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or annual periods ending after June 15, 2009. The adoption of SFAS 165 did not have a material impact on the Company’s consolidated results of operations or financial position.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS 168”), that establishes the FASB Accounting Standards Codification as the authoritative source of generally accepted accounting principles in the United States. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We do not expect adoption to have a material impact on the Company’s consolidated results of operations or financial position.

7

NOTE 2—DEBT

Debt consisted of the following on the dates indicated:

	June 30, 2009			December 31, 2008
Term loan	$	145,391		$	161,213
Delayed draw term loan credit agreement		111,727			112,303
		257,118			273,516
Current maturities		(2,666	)		(2,822	)
	$	254,452		$	270,694

In 2005, the Company entered into a credit agreement that provides for senior secured credit facilities in the aggregate principal amount of $405,000 consisting of:

• a $170,000 seven year term loan facility maturing in May 2012;

• a $185,000 seven year delayed-draw term loan facility maturing in May 2012; and

• a $50,000 five year revolving credit facility available for general corporate purposes maturing in May 2010 for which no amounts were outstanding as of June 30, 2009 or December 31, 2008.

In addition, the credit agreement provides for future increases (subject to certain conditions and requirements) to the revolving credit and term loan facilities in an aggregate principal amount of up to $125,000.

The Company is currently required to make principal repayments of the term loans in the amount of $667 on the last day of each calendar quarter. Beginning on September 30, 2011 this repayment amount will increase to $62,946, due on each of September 30, 2011, December 31, 2011, March 31, 2012 and May 19, 2012 and would be reduced pro-ratably based on any future debt prepayments. Any amounts that may become outstanding under the revolving credit facility would be due and payable on May 19, 2010.

The interest rate for borrowings under the credit agreement, as amended, is set to a margin above the London interbank offered rate (“LIBOR”) or base rate, as the case may be, based on the Company’s consolidated leverage ratio as defined in the credit agreement, with the margin ranging from 3.00% to 3.50% for loans based on LIBOR and 2.00% to 2.50% for loans based on the base rate. At June 30, 2009 and 2008, the average interest rate was 4.57% and 6.38%, respectively.

The credit agreement requires that mandatory prepayments be made from (1) 100% of the net cash proceeds from certain asset sales and dispositions, other than a sales-leaseback transaction, and issuances of certain debt, (2) 85% of the net cash proceeds from sales-leaseback transactions, (3) various percentages (ranging from 0% to 75% depending on the Company’s consolidated leverage ratio) of excess cash flow as defined in the credit agreement, and (4) 50% of the net cash proceeds from the issuance of certain equity and capital contributions.

Debt Covenants

The senior secured credit facilities contain covenants which, among other things, restrict the Company’s ability, and that of its restricted subsidiaries, to:

• pay dividends or make any other restricted payments to parties other than to the Company;

• incur additional indebtedness;

• create liens on their assets;

• make certain investments;

• sell or otherwise dispose of their assets;

• consolidate, merge or otherwise transfer all or any substantial part of their assets; and

• enter into transactions with their affiliates.

The senior secured credit facilities also contain financial covenants measured quarterly that require the Company to maintain specified ratios of funded debt to adjusted EBITDA (the “leverage ratio”) and adjusted EBITDA to interest expense (the “interest coverage ratio”).

8

The senior secured credit agreement places certain restrictions on the Company’s ability to make capital expenditures. In addition to the dollar limitation described below, the Company may not make any capital expenditure if any default or event of default under the credit agreement has occurred and is continuing or would result, or if such default or event of default would occur as a result of a breach of certain financial covenants contained in the credit agreement on a pro forma basis after giving effect to the capital expenditure.

The Company has from time to time amended the senior secured credit agreement and the most recent amendments included, among other items:

• amending the Company’s leverage ratio such that from and after October 17, 2007 the ratio may not exceed 4.75 to 1.00 as of the last day of any quarter for the four-quarter period then ending;

• amending the Company’s interest coverage ratio such that from and after October 17, 2007 the ratio may not be less than 1.65 to 1.00 as of the last day of any quarter for the four-quarter period then ending;

• limiting the aggregate capital expenditures that the Company may make, or commit to make, to $30,000 for any fiscal year, provided, that up to $10,000 of unused capital expenditures in a fiscal year may be carried over to the succeeding fiscal year; and

• permitting sale-leaseback transactions of up to an aggregate of $175,000.

As of June 30, 2009, the Company was in compliance with all of the financial covenants in its credit agreement. As of June 30, 2009, the Company’s leverage and interest coverage ratios were 3.6 and 2.5, respectively. The Company estimates that based on its 2009 forecast, which consists of actual results through June 30, 2009 and the 2009 budget approved by the Board of Directors as updated for known trends, attendance would have to decrease from the comparable period in 2008 more than 26% in one remaining quarter during 2009, or 13% for the remaining six months of the year, in order for the Company to fail to be in compliance with some or all of its financial covenants, absent other factors.

While the Company currently believes that it will remain in compliance with these financial covenants through June 30, 2010 based on current projections, it is possible that the Company may not comply with some or all of its financial covenants. In order to avoid such non-compliance, the Company has the ability to reduce, postpone or cancel certain identified discretionary spending. The Company could also seek waivers or amendments to the credit agreement in order to avoid non-compliance. However, the Company can provide no assurance that it will successfully obtain such waivers or amendments from its lenders. If the Company is unable to comply with some or all of the financial or non-financial covenants and if it fails to obtain future waivers or amendments to the credit agreement, the lenders may terminate the Company’s revolving credit facility with respect to additional advances and may declare all or any portion of the obligations under the revolving credit facility and the term loan facilities due and payable.

Other events of default under the senior secured credit facilities include:

• the Company’s failure to pay principal on the loans when due and payable, or its failure to pay interest on the loans or to pay certain fees and expenses (subject to applicable grace periods);

• the occurrence of a change of control (as defined in the credit agreement); or

• a breach or default by the Company or its subsidiaries on the payment of principal of any indebtedness (as defined in the credit agreement) in an aggregate amount greater than $5,000.

The senior secured credit facilities are guaranteed by each of the Company’s subsidiaries and secured by a perfected first priority security interest in substantially all of its present and future assets.

NOTE 3—INCOME TAXES

As of June 30, 2009, after generating approximately $1.2 million of estimated operating loss carryforwards for the six months ended June 30, 2009, the Company had federal and state net operating loss carryforwards of $20.0 million, net of Internal Revenue Code (“IRC”) Section 382 limitations, to offset the Company’s future taxable income. The federal and state operating loss carryforwards begin to expire in the year 2020. In addition, the Company’s alternative minimum tax credit carryforward has an indefinite carryforward life.

The Company experienced an “ownership change” within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as amended, during the fourth quarter of 2008. The ownership change has and will continue to subject the Company’s net operating loss carryforwards to an annual limitation, which will significantly restrict its ability to use them to offset taxable income in periods following the ownership change. In general, the annual use limitation equals the aggregate value of the Company’s stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The date of ownership change and the occurrence of more than one ownership change can significantly impact the amount of the annual limitation. The limitation is estimated to be $1.2 million per year, based on the information available.

9

Valuation Allowance

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards. At June 30, 2009 and December 31, 2008, the Company’s consolidated net deferred tax assets, net of IRC section 382 limitations, were $56,927 and $56,442, respectively, before the effects of any valuation allowance. In accordance with SFAS No. 109 “Accounting for Income Taxes”, the Company regularly assesses whether it is more likely than not that its deferred tax asset balances will be recovered from future taxable income, taking into account such factors as earnings history, carryback and carryforward periods, and tax planning strategies. When sufficient evidence exists that indicates that recovery is uncertain, a valuation allowance is established against the deferred tax assets, increasing the Company’s income tax expense in the period that such conclusion is made.

A significant factor in the Company’s assessment of the recoverability of its deferred tax asset is its history of cumulative losses. During 2007, the Company concluded that the recoverability of the deferred tax assets was uncertain based upon cumulative losses in that year and the preceding two years and recorded at that time a valuation allowance to fully reserve its deferred tax assets. The valuation allowance decreased during 2008 as a result of the limitations imposed by Section 382 on the Company’s net operating loss carryforwards and the related decrease in the Company’s deferred tax assets.

The Company expects that it will not recognize income tax benefits until a determination is made that a valuation allowance for all or some portion of the deferred tax assets is no longer required.

If the Company is assured beyond reasonable doubt of generating pre-tax income for 2009, then the Company is likely to record income tax expense subject to the Section 382 limitation on the Company’s use of its net operating loss carryforwards.

Income Tax Uncertainties

The adoption of FASB’s Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) on January 1, 2007, required the Company to reclassify amounts related to uncertain tax positions. Because the Company’s uncertain tax positions would be fully absorbed by net operating loss carryforwards, the FIN 48 liabilities were classified within deferred tax assets.

The tax benefit of the Company’s uncertain tax positions is reflected in its net operating loss carryforwards which have been significantly limited by IRC Section 382. As a result of the fourth quarter 2008 ownership change, the Company decreased its gross unrecognized tax benefits by $3,037 to reflect the de-recognition of tax positions resulting from the Section 382 limitations.

As of June 30, 2009, there are no tax positions the disallowance of which would affect the Company’s annual effective income tax rate.

The Company files consolidated and separate income tax returns in the United States federal jurisdiction and in many state jurisdictions. The Company is no longer subject to United States federal income tax examinations for years before 2000 and is no longer subject to state and local income tax examinations by tax authorities for years before 1998.

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits within its income tax expense. Due to its net operating loss carryforward position, the Company recognized no interest and penalties for the three and six months ended June 30, 2009 and June 30, 2008.

NOTE 4—EQUITY BASED COMPENSATION

The Company’s total stock-based compensation expense was approximately $344 and $607 for the three months ended June 30, 2009 and 2008, respectively, and $478 and $1,304 for the six months ended June 30, 2009 and 2008, respectively. These amounts were recorded in general and administrative expenses. As of June 30, 2009, the Company had approximately $2,419 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company’s plans. This cost is expected to be recognized as stock-based compensation expense over a weighted-average period of approximately two years. This expected cost does not include the impact of any future stock-based compensation awards.

Options – Service Condition Vesting

The Company currently uses the Black-Scholes option pricing model to determine the fair value of its stock options for which vesting is dependent only on employees providing future service.

10

The following table sets forth information about the weighted-average fair value of options granted, and the weighted-average assumptions for such options granted, during 2009:

	2009
Fair value of options on grant date	$	5.2
Expected life (years)		6
Risk-free interest rate		2.8	%
Expected dividend yield		—	%
Expected volatility		68.1	%

The following table sets forth the summary of option activity for stock options with service vesting conditions as of June 30, 2009:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at January 1, 2009	165,000		$	29.65	4.73
Granted	205,000		$	8.30			33
Exercised	—		$	—
Forfeited	(5,000	)	$	20.58
Outstanding at June 30, 2009	365,000		$	17.78	7.39	$	33
Exercisable at June 30, 2009	165,000		$	29.09	4.30	$	33
Expected to vest at June 30, 2009	—			—	—		—

Options – Market Condition Vesting

In April 2007, the Compensation and Nominating Committee approved (pursuant to the 2004 Incentive Stock Plan) the grant of an aggregate of 260,000 stock options, at an exercise price equal to $25.95 per share, to a group of eight senior executives. The April 2007 stock option grants are aligned with market performance, as one-third of these stock options each will vest when the Company achieves an increase in the trading price of its common stock (over the $25.95 exercise price) equal to 25%, 30% and 35%, respectively. The Company determined the aggregate grant date fair value of these stock options to be approximately $1,430. The fair value of these options was estimated on the date of grant using a Monte Carlo simulation model and compensation expense is not subsequently adjusted for the number of shares that are ultimately vested.

The following table sets forth the summary of option activity for the Company’s stock options with market condition vesting for the six months ended June 30, 2009:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at January 1, 2009	260,000		$	25.95	8.29
Forfeited	(40,000	)	$	25.95
Outstanding at June 30, 2009	220,000		$	25.95	7.79	$	—
Exercisable at June 30, 2009	—		$	—	—	$	—
Expected to vest at June 30, 2009	—		$	—	—	$	—

11

Restricted Stock

The following table sets forth the summary of activity for restricted stock grants under the Company’s 2002 Stock Plan and 2004 Incentive Stock Plan for the six months ended June 30, 2009:

	Shares		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2009	160,668		$	24.45
Granted	65,000		$	8.31
Vested	(15,000	)	$	10.60
Forfeited	(12,500	)	$	25.95
Nonvested at June 30, 2009	198,168		$	20.11

NOTE 5—DISCONTINUED OPERATIONS

Theatres are generally considered for closure due to an expiring lease term, underperformance, or the opportunity to better deploy invested capital. During the three months ended June 30, 2009 and 2008, the Company closed three theatres and five theatres, respectively, and for the six months ended June 30, 2009 and 2008, the Company closed six and seven theatres, respectively. Of those closures, during the three months ended June 30, 2009 and 2008, the Company classified one theatre and four theatres, respectively, as discontinued operations, and for the six months ended June 30, 2009 and 2008, the Company classified three and five theatres, respectively, as discontinued operations. The Company reported the results of these operations, including gains or losses on disposal, as discontinued operations in accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). The operations and cash flow of these theatres have been eliminated from the Company’s operations, and the Company will not have any continuing involvement in their operations.

In accordance with SFAS 144, all prior year activity of closed theatres included in the accompanying condensed consolidated statements of operations has been reclassified to separately show the results of operations of such theatres as discontinued operations. Assets and liabilities associated with the discontinued operations have not been segregated in the accompanying condensed consolidated balance sheets as they are not material.

The following table provides information regarding discontinued operations for the periods presented.

	Three Months Ended June 30,
	2009			2008
Revenue from discontinued operations	$	96		$	1,007
Operating loss	$	(99	)	$	(256	)
Loss on disposal		(75	)		(364	)
Loss from discontinued operations	$	(174	)	$	(620	)

	Six Months Ended June 30,
	2009			2008
Revenue from discontinued operations	$	451		$	2,719
Operating loss	$	(482	)	$	(728	)
Gain (loss) on disposal		(2	)		490
Loss from discontinued operations	$	(484	)	$	(238	)

NOTE 6—COMMITMENTS AND CONTINGENCIES

Contingencies

The Company, in the normal course of business, is involved in routine litigation and legal proceedings, such as personal injury claims, employment matters, contractual disputes and claims alleging Americans with Disabilities Act violations. Currently, there is no pending litigation or proceedings that the Company believes will have a material adverse effect, either individually or in the aggregate, on its business or financial position, results of operations or cash flow.

12

NOTE 7—FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the short-term maturities of these assets and liabilities.

Fair values of long-term debt are based on quoted market prices at the date of measurement. At June 30, 2009, the fair value of long-term debt, as determined by quotes from financial institutions, was $234,997 compared to a carrying amount of $257,118. At December 31, 2008, the fair value of long-term debt, as determined by quotes from financial institutions, was $211,975 compared to a carrying amount of $273,516.

NOTE 8—NET INCOME (LOSS) PER SHARE

Net income (loss) per share is presented in conformity with SFAS No. 128, “Earnings Per Share” (“SFAS 128”). In accordance with SFAS 128, basic net income (loss) per common share has been computed using the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed using the weighted average number of common shares and common stock equivalents outstanding. For the three months ended June 30, 2009, common stock equivalents totaling 450,055 were excluded from the calculation of diluted earnings per share because of a decline in the average market price of the common stock. As a result of the Company’s net losses, all common stock equivalents aggregating 445,000 for the three months ended June 30, 2008 and 440,525 and 446,668 for the six months ended June 30, 2009 and 2008, respectively, were excluded from the calculation of diluted loss per share given their anti-dilutive affect.

NOTE 9—SEPARATION AGREEMENT CHARGES

In January 2009, the Company’s Chairman, Chief Executive Officer and President, Michael W. Patrick, ceased employment with the Company. In February 2009, the Company and Mr. Patrick entered into a separation agreement and general release (the “Separation Agreement”) setting forth the terms of his departure from the Company. Pursuant to the Separation Agreement, the Company will make a lump sum payment to Mr. Patrick of $5,000 in the third quarter of 2009 and pay all of Mr. Patrick’s club membership dues through 2009. Mr. Patrick will continue to receive medical benefits and group life insurance coverage until January 2012. Should Mr. Patrick die on or before January 31, 2012, the Company will pay the sum of $850 to Mr. Patrick’s surviving spouse or other designated beneficiary. The consideration payable to Mr. Patrick under the Separation Agreement was based on the terms of his existing employment agreement and the other agreements contained in the Separation Agreement, including its mutual release, non-compete and standstill provisions. The Company recorded charges of $5,462, including legal and related costs, in its results of operations for the six months ended June 30, 2009 for the estimated future costs associated with the separation agreement.

13

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

Overview

We are one of the largest motion picture exhibitors in the United States and as of June 30, 2009 we owned, operated or had an interest in 247 theatres with 2,285 screens located in 35 states. We target small to mid-size non-urban markets with the belief that they provide a number of operating benefits, including lower operating costs and fewer alternative forms of entertainment.

As of June 30, 2009, we had 225 theatres with 2,133 screens on a digital-based platform, including 192 theatres with 499 screens equipped for 3-D. We believe our leading-edge technologies allow us not only greater flexibility in showing feature films, but also provide us with the capability to explore revenue-enhancing alternative content programming. Digital film content can be easily moved to and from auditoriums in our theatres to maximize attendance. The superior quality of digital cinema and our 3-D capability could provide a competitive advantage to us in markets where we compete for film and patrons.

Our business depends to a substantial degree on the availability of suitable motion pictures for screening in our theatres and the appeal of such motion pictures to patrons in our specific theatre markets. Our results of operations vary from period to period based upon the number and popularity of the films we show in our theatres. A disruption in the production of motion pictures, a lack of motion pictures, or the failure of motion pictures to attract the patrons in our theatre markets will likely adversely affect our business and results of operations.

Our revenue also varies significantly depending upon the timing of the film releases by distributors. While motion picture distributors have begun to release major motion pictures more evenly throughout the year, the most marketable films are usually released during the summer months and the year-end holiday season, and we usually earn more during those periods than in other periods during the year. As a result, the timing of such releases affects our results of operations, which may vary significantly from quarter to quarter and year to year.

In addition to competition with other motion picture exhibitors, our theatres face competition from a number of alternative motion picture exhibition delivery systems, such as cable television, satellite and pay-per-view services and home video systems. The expansion of such delivery systems could have a material adverse effect upon our business and results of operations. We also compete for the public’s leisure time and disposable income with all forms of entertainment, including sporting events, concerts, live theatre and restaurants. A prolonged economic downturn could materially affect our business by reducing amounts consumers spend on entertainment including attending movies and purchasing concessions. Any reduction in consumer confidence or disposable income in general may affect the demand for movies or severely impact the motion picture production industry such that our business and operations could be adversely affected.

The ultimate performance of our film product any time during the calendar year will have a dramatic impact on our cash needs. In addition, the seasonal nature of the exhibition industry and positioning of film product makes our needs for cash vary significantly from quarter to quarter. Generally, our liquidity needs are funded by operating cash flow, available funds under our credit agreement and short term float. Our ability to generate this cash will depend largely on future operations.

In light of the continuing challenging conditions in the credit markets and the wider economy, we continue to focus on operating performance improvements. This includes managing our operating costs, implementing pricing initiatives and closing underperforming theatres. We also intend to allocate our available capital primarily to reducing our overall leverage. To this end, during the three and six months ended June 30, 2009, we made voluntary pre-payments to reduce bank debt of $10 million and $15 million, respectively. In September 2008 we announced our decision to suspend our quarterly dividend. In addition, we continue to sell surplus property in order to deleverage our balance sheet.

In January 2009, the Company’s Chairman, Chief Executive Officer and President, Michael W. Patrick, ceased employment with the Company. Refer to Note 9 – Separation Agreement Charges.

In June 2009, the Board of Directors appointed S. David Passman III to serve as President and Chief Executive Officer of the Company and entered into an employment agreement with Mr. Passman (the “Commencement Date”). The agreement provides that Mr. Passman will receive an annual base salary of $630,000 and will be eligible to receive an annual bonus with a target amount of 50% of base salary. Additionally, Mr. Passman was granted stock options to purchase 200,000 shares of the Company’s common stock at a per share exercise price equal to the fair market value of one share on the Commencement Date. Also, on the Commencement Date Mr. Passman was granted 50,000 shares of restricted common stock.

For a summary of risks and uncertainties relevant to our business, please see “Item 1A. Risk Factors” contained in our Annual Report on Form 10-K for the year ended December 31, 2008.

14

Results of Operations

Comparison of Three and Six Months Ended June 30, 2009 and June 30, 2008

Revenues. We collect substantially all of our revenues from the sale of admission tickets and concessions. The table below provides a comparative summary of the operating data for this revenue generation.

	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Average theatres		248		259		249		261
Average screens		2,286		2,318		2,288		2,329
Average attendance per screen (1)		5,984		5,402		11,562		10,632
Average admission per patron (1)	$	6.50	$	6.16	$	6.44	$	6.30
Average concessions and other sales per patron (1)	$	3.23	$	3.29	$	3.21	$	3.24
Total attendance (in thousands) (1)		13,680		12,524		26,451		24,763
Total revenues (in thousands)	$	133,104	$	117,317	$	254,906	$	233,455
(1)    Includes activity from theatres designated as discontinued operations and reported as such in the consolidated statements of operations.

Total revenue increased approximately 13% to $133.1 million for the three months ended June 30, 2009 compared to $117.3 million for the three months ended June 30, 2008, due to an increase in total attendance from 12.5 million in the second quarter of 2008 to 13.7 million for the second quarter of 2009 and an increase in average admissions per patron from $6.16 in the second quarter of 2008 to $6.50 for the second quarter of 2009, offset by a decrease in average concessions and other sales per patron from $3.29 for the second quarter of 2008 to $3.23 for the second quarter of 2009.

Total revenue increased approximately 9% to $254.9 million for the six months ended June 30, 2009 compared to $233.5 million for the six months ended June 30, 2008, due to an increase in total attendance from 24.8 million for the 2008 period to 26.5 million for the 2009 period and an increase in average admissions per patron from $6.30 for the 2008 period to $6.44 for the 2009 period, offset by a decrease in average concessions and other sales per patron from $3.24 for the 2008 period to $3.21 for the 2009 period.

Admissions revenue increased approximately 16% to $88.9 million for the three months ended June 30, 2009 from $76.5 million for the same period in 2008, due to an increase in total attendance and an increase in average admissions per patron from $6.16 in the second quarter of 2008 to $6.50 for the second quarter of 2009.

Admissions revenue increased approximately 10% to $170.1 million for the six months ended June 30, 2009 from $154.3 million for the same period in 2008, due to an increase in total attendance and an increase in average admissions per patron from $6.30 for the 2008 period to $6.44 for the 2009 period.

Concessions and other revenue increased approximately 8% to $44.2 million for the three months ended June 30, 2009 compared to $40.8 million for the same period in 2008, due to an increase in total attendance offset by a decrease in average concessions and other sales per patron from $3.29 for the second quarter of 2008 to $3.23 for the second quarter of 2009.

Concessions and other revenue increased approximately 7% to $84.8 million for the six months ended June 30, 2009 compared to $79.2 million for the same period in 2008, due to an increase in total attendance offset by a decrease in average concessions and other sales per patron from $3.24 for the 2008 period to $3.21 for the 2009 period.

We operated 247 theatres with 2,285 screens at June 30, 2009 compared to 257 theatres with 2,308 screens at June 30, 2008.

15

Operating costs and expenses. The tables below summarize operating expense data for the periods presented.

	Three Months Ended June 30,
($’s in thousands)	2009			2008		% Change
Film exhibition costs	$	51,178		$	43,655	17
Concession costs	$	4,701		$	4,415	6
Other theatre operating costs	$	53,007		$	46,776	13
General and administrative expenses	$	3,807		$	4,647	(18	)
Depreciation and amortization	$	8,778		$	9,128	(4	)
Loss (gain) on sale of property and equipment	$	(105	)	$	232	n/m
	Six Months Ended June 30,
($’s in thousands)	2009			2008		% Change
Film exhibition costs	$	94,456		$	85,251	11
Concession costs	$	8,528		$	8,547	(0	)
Other theatre operating costs	$	104,242		$	95,974	9
General and administrative expenses	$	7,865		$	10,298	(24	)
Depreciation and amortization	$	17,437		$	18,258	(4	)
Loss (gain) on sale of property and equipment	$	(151	)	$	243	n/m

Film exhibition costs. Film exhibition costs fluctuate in direct relation to the increases and decreases in admissions revenue and the mix of aggregate and term film deals. Film exhibition costs as a percentage of revenues are generally higher for periods with more blockbuster films. Film exhibition costs for the three months ended June 30, 2009 increased to $51.2 million as compared to $43.7 million for the three months ended June 30, 2008 due to an increase in admissions revenue primarily as a result of an increase in attendance. As a percentage of admissions revenue, film exhibition costs for the three months ended June 30, 2009 were 57.6% as compared to 57.1% for the three months ended June 30, 2008 primarily as a result of a higher percentage of revenues generated by top tier films. Film exhibition costs for the six months ended June 30, 2009 increased to $94.5 million as compared to $85.3 million for the six months ended June 30, 2008 due to an increase in admissions revenue primarily as a result of an increase in attendance. As a percentage of admissions revenue, film exhibition costs for the six months ended June 30, 2009 were 55.5% as compared to 55.3% for the six months ended June 30, 2008 primarily as a result a higher percentage of revenues generated by top tier films.

Concession costs. Concession costs fluctuate with changes in concessions revenue and product sales mix and changes in our cost of goods sold. Concession costs increased to approximately $4.7 million for the three months ended June 30, 2009 from $4.4 million for the three months ended June 30, 2008 due to an increase in concessions and other sales revenue. As a percentage of concessions and other revenues, concession costs for the three months ended June 30, 2009 were 10.6% as compared to 10.8% for the three months ended June 30, 2008 primarily due to an increase in concession volume rebates and concessions sales of higher margin products. Our focus continues to be a limited concessions offering of high margin products, such as soft drinks, popcorn and individually packaged candy, to maximize our profit potential. Concessions costs were flat at $8.5 million for the six months ended June 30, 2009 and 2008 due to sales of higher margin products offset by a decrease in concessions and other sales revenue per patron. As a percentage of concessions and other revenues, concession costs were 10.1% for the six months ended June 30, 2009 and 10.8% for the six months ended June 30, 2008 due to an increase in concession volume rebates and concessions sales of higher margin products.

Other theatre operating costs. Other theatre operating costs for the three months ended June 30, 2009 increased to $53.0 million as compared to $46.8 million for the three months ended June 30, 2008. The increase in our other theatre operating costs is primarily the result of an increase in occupancy costs due to the opening of new theatres, an increase in salaries and wages expense, an increase in repair and maintenance costs and an increase in 3D equipment service charges. Other theatre operating costs for the six months ended June 30, 2009 increased to $104.2 million as compared to $96.0 million for the six months ended June 30, 2008. The increase in our other theatre operating costs are primarily the result of an increase in occupancy costs due to the opening of new theatres offset in part by decreases in occupancy costs for theatres that were closed, an increase in salaries and wages expense, an increase in repair and maintenance costs and an increase in 3D equipment service charges.

General and administrative expenses. General and administrative expenses for the three months ended June 30, 2009 decreased to $3.8 million as compared to $4.6 million for the three months ended June 30, 2008. The decrease in our general and administrative expenses is due to reductions in salaries and wages, incentive compensation and legal and professional fees partially offset by an increase in travel costs. General and administrative expenses for the six months ended June 30, 2009 decreased to $7.9 million as compared to $10.3 million for the six months ended June 30, 2008. The decrease in our general and administrative expenses is due to reductions in salaries and wages, incentive compensation and legal and professional fees partially offset by an increase in travel expenses.

16

Depreciation and amortization. Depreciation and amortization expenses for the three and six months ended June 30, 2009 decreased approximately 4% as compared to the three and six months ended June 30, 2008. The decrease in depreciation and amortization expenses resulted from a combination of a lower balance of property and equipment due to theatre closures, asset sales, prior period impairment and other property and equipment disposals, as well as a portion of our long-lived assets becoming fully depreciated.

Net loss (gain) on sales of property and equipment. We recognized a gain of $105,000 on the sales of property and equipment for the three months ended June 30, 2009, as compared to a loss of $232,000 for the three months ended June 30, 2008. We recognized a gain of $151,000 on the sales of property and equipment for the six months ended June 30, 2009, as compared to a loss of $243,000 for the six months ended June 30, 2008.

Separation agreement charges. We recognized charges of $5.5 million for estimated expenses pertaining to the separation agreement with our former Chairman, Chief Executive Officer and President, Michael W. Patrick for the six months ended June 30, 2009, as compared to no expense recorded for the three months ended June 30, 2008 and 2009 and six months ended June 30, 2008.

Operating Income. Operating income for the three months ended June 30, 2009 increased 39% to $11.7 million as compared to $8.5 million for the three months ended June 30, 2008. As a percentage of revenues, operating income for the three months ended June 30, 2009 was 8.8% as compared to 7.2% for the three months ended June 30, 2008. These fluctuations are primarily a result of the factors described above. Operating income for the six months ended June 30, 2009 increased 15% to $17.1 million as compared to $14.9 million for the six months ended June 30, 2008. As a percentage of revenues, operating income for the six months ended June 30, 2009 was 6.7% as compared to 6.4% for the six months ended June 30, 2008. These fluctuations are primarily a result of the separation agreement charges and the other factors described above.

Interest expense, net. Interest expense, net for the three months ended June 30, 2009 decreased 13% to $8.7 million from $10.1 million for the three months ended June 30, 2008. The decrease is primarily related to a combination of lower average outstanding debt and a reduction in interest rates. Interest income, included in interest expense net, was $21,000 for the three months ended June 30, 2009 as compared to $25,000 for the same period in 2008. Interest expense, net for the six months ended June 30, 2009 decreased 16% to $17.8 million from $21.2 million for the six months ended June 30, 2008.

Income tax. During the first six months of 2008 and 2009 we did not recognize any tax benefit. At June 30, 2009 and December 31, 2008, our consolidated net deferred tax assets were $56.9 million and $56.4 million, respectively, before the effects of any valuation allowance. We regularly assess whether it is more likely than not that our deferred tax asset balance will be recovered from future taxable income, taking into account such factors as our earnings history, carryback and carryforward periods, and tax planning strategies. When sufficient evidence exists that indicates that recovery is uncertain, a valuation allowance is established against the deferred tax asset, increasing our income tax expense in the period that such determination is made.

A significant factor in our assessment of the recoverability of the deferred tax asset is our history of cumulative losses. During 2007, we concluded that the recoverability of the deferred tax assets was uncertain based upon cumulative losses in that year and the preceding two years and determined that a valuation allowance was necessary to fully reserve our deferred tax assets. We expect that we will not recognize income tax benefits until a determination is made that a valuation allowance for all or some portion of the deferred tax assets is no longer required.

Should we realize year-to-date pre-tax income during 2009 or the realization of a current tax benefit is reasonably assured, then we will likely record income tax expense as a result of the Section 382 limitation on the use of our net operating loss carryforwards.

Income (loss) from discontinued operations, net of tax. We generally consider theatres for closure due to an expiring lease term, underperformance, or the opportunity to better deploy invested capital. During the three months ended June 30, 2009 and 2008, we closed one theatre and four theatres, respectively, and for the six months ended June 30, 2009 and 2008, we closed three and five theatres, respectively, and reported the results of these operations, including gains or losses on disposal, as discontinued operations. The operations and cash flow of these theatres have been eliminated from the Company’s operations, and the Company will not have any continuing involvement in their operations.

The accompanying condensed consolidated statements of operations separately show the results of operations from discontinued operations through the respective dates of the theatre closings. Assets and liabilities associated with the discontinued operations have not been segregated from assets and liabilities from continuing operations as they are not material. We recorded a loss from discontinued operations for the three months ended June 30, 2009 of $174,000 as compared to a loss of $620,000 for the three months ended June 30, 2008. The results from discontinued operations include a loss of $75,000 on disposal of assets for the

17

three months ended June 30, 2009 as compared to a loss of $364,000 for the three months ended June 30, 2008. We recorded a loss from discontinued operations for the six months ended June 30, 2009 of $484,000 as compared to a loss of $238,000 for the six months ended June 30, 2008. The results from discontinued operations include a loss of $2,000 on disposal of assets for the six months ended June 30, 2009 as compared to a gain of $490,000 for the six months ended June 30, 2008.

Liquidity and Capital Resources

General

Our revenues are collected in cash and credit card payments. Because we receive our revenues in cash prior to the payment of related expenses, we have an operating “float” which partially finances our operations. We had a working capital deficit of $35.9 million as of June 30, 2009 compared to working capital deficit of $34.0 million at December 31, 2008.

At June 30, 2009, we had available borrowing capacity of $50 million under our revolving credit facility and approximately $17.6 million in cash and cash equivalents on hand. The material terms of our revolving credit facility (including limitations on our ability to freely use all the available borrowing capacity) are described below in “Credit Agreement and Covenant Compliance.”

Net cash provided by operating activities was $29.3 million for the six months ended June 30, 2009 compared to $7.9 million for the six months ended June 30, 2008. This increase in our cash provided by operating activities was due primarily to a reduction in accounts receivable and an increase in accounts payable and accrued expenses as compared to the prior period. Net cash used in investing activities was $5.3 million for the six months ended June 30, 2009 compared to $2.3 million for the six months ended June 30, 2008. The increase in our net cash used in investing activities is primarily due to an increase in cash used for the purchases of property and equipment and a decrease in proceeds from sales of property and equipment. Capital expenditures were $7.1 million for the six months ended June 30, 2009 and $4.5 million for the six months ended June 30, 2008 due to the opening of three new theatres in the first half of 2009 as compared to no theatre openings in the first half of 2008. Net cash used in financing activities was $17.2 million for the six months ended June 30, 2009 compared to $12.2 million for the six months ended June 30, 2008. The increase in our net cash used in financing activities is primarily due to $15 million of unscheduled prepayments of long-term debt for the six months ended June 30, 2009 compared to $5 million for the six months ended June 30, 2008. Our financing activities include $4.5 million of dividends paid during the six months ended June 30, 2008.

Our liquidity needs are funded by operating cash flow and availability under our credit agreement. The exhibition industry is 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 quarter to quarter. Additionally, the performance of films from time to time during the calendar year will have a dramatic impact on our cash flow.

We from time to time close older theatres or do not renew the leases, and the expenses associated with exiting these closed theatres typically relate to costs associated with removing owned equipment for redeployment in other locations and are not material to our operations. In 2009, we plan to close 12 to 16 of our underperforming theatres, of which six were closed during the six months ended June 30, 2009 (three of the theatres closed were determined to represent discontinued operations).

We plan to make a total of approximately $16 million in capital expenditures during calendar year 2009. Pursuant to the eighth amendment to our senior secured credit agreement, the aggregate capital expenditures that we may make, or commit to make for any fiscal year is limited to $30 million, provided that up to $10 million of the unused capital expenditures in a fiscal year may be carried over to the succeeding fiscal year.

In September 2008, our Board of Directors announced the decision to suspend our quarterly dividend in light of the continuing challenging conditions in the credit markets and the wider economy. At that time, we announced our plans to allocate our capital primarily to reducing our overall leverage. The cash dividend of $0.175 per share, paid on August 1, 2008 to shareholders of record at the close of business on July 1, 2008, was the last dividend declared by the Board of Directors prior to this decision. The payment of future dividends is subject to the Board of Directors’ discretion and is dependent on many considerations, including limitations imposed by covenants in our credit facilities, operating results, capital requirements, strategic considerations and other factors. We do not anticipate paying cash dividends in the foreseeable future.

Net Operating Loss Carryforward

As of June 30, 2009, after generating approximately $1.2 million of estimated operating loss carryforwards for the three months ended June 30, 2009, we had federal and state net operating loss carryforwards of $20.0 million, net of IRC Section 382 limitations, to offset our future taxable income. The federal and state operating loss carryforwards begin to expire in the year 2020. In addition, our alternative minimum tax credit carryforward has an indefinite carryforward life.

We experienced an “ownership change” within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as amended, during the fourth quarter of 2008. The ownership change has and will continue to subject our net operating loss

18

carryforwards to an annual limitation, which will significantly restrict our ability to use them to offset taxable income in periods following the ownership change. In general, the annual use limitation equals the aggregate value of our stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The date of ownership change and the occurrence of more than one ownership change can significantly impact the amount of the annual limitation. The limitation is estimated to be $1.2 million per year, based on the information available. In total, we estimate that the effect of the 2008 ownership change will result in $97.8 million of net operating loss carryforwards expiring unused. These unusable net operating loss carryforwards are therefore not included in the amount of available net operating loss carryforwards disclosed above.

Credit Agreement and Covenant Compliance

In 2005, we entered into a credit agreement that provides for senior secured credit facilities in the aggregate principal amount of $405 million consisting of:

• a $170 million seven year term loan facility maturing in May 2012;

• a $185 million seven year delayed-draw term loan facility maturing in May 2012; and

• a $50 million five year revolving credit facility available for general corporate purposes maturing in May 2010.

In addition, the credit agreement provides for future increases (subject to certain conditions and requirements) to the revolving credit and term loan facilities in an aggregate principal amount of up to $125 million.

As of June 30, 2009, we had the following amounts outstanding under each of the facilities described above:

• $155.8 million was outstanding under our $170 million term loan facility;

• $112.0 million was outstanding under our $185 million delayed-draw term loan facility; and

• no amounts were outstanding under our $50 million revolving credit facility.

Our long-term debt obligations mature as follows:

• the final maturity date of the revolving credit facility is May 19, 2010; and

• the final maturity date of the term loans is May 19, 2012.

The interest rate for borrowings under the credit agreement, as amended, is set to a margin above the London interbank offered rate (“LIBOR”) or base rate, as the case may be, based on our consolidated leverage ratio as defined in the credit agreement, with the margin ranging from 3.00% to 3.50% for loans based on LIBOR and 2.00% to 2.50% for loans based on the base rate. At June 30, 2009 and 2008, the average interest rate was 4.57% and 6.38%, respectively.

The credit agreement requires that mandatory prepayments be made from (1) 100% of the net cash proceeds from certain asset sales and dispositions, other than a sales-leaseback transaction, and issuances of certain debt, (2) 85% of the net cash proceeds from sales-leaseback transactions, (3) various percentages (ranging from 0% to 75% depending on our consolidated leverage ratio) of excess cash flow as defined in the credit agreement, and (4) 50% of the net cash proceeds from the issuance of certain equity and capital contributions.

Debt Covenants

The senior secured credit facilities contain covenants which, among other things, restrict our ability, and that of our restricted subsidiaries, to:

• pay dividends or make any other restricted payments to parties other than to us;

• incur additional indebtedness;

• create liens on our assets;

• make certain investments;

• sell or otherwise dispose of our assets;

• consolidate, merge or otherwise transfer all or any substantial part of our assets; and

• enter into transactions with our affiliates.

The senior secured credit facilities also contain financial covenants measured quarterly that require us to maintain specified ratios of funded debt to adjusted EBITDA (the “leverage ratio”) and adjusted EBITDA to interest expense (the “interest coverage ratio”).

19

The credit agreement places certain restrictions on our ability to make capital expenditures. In addition to the dollar limitation described below, we may not make any capital expenditure if any default or event of default under the credit agreement has occurred and is continuing or would result, or if such default or event of default would occur as a result of a breach of certain financial covenants contained in the credit agreement on a pro forma basis after giving effect to the capital expenditure.

We have from time to time amended the credit agreement and the most recent amendments included, among other items:

• amending our leverage ratio such that from and after October 17, 2007 the ratio may not exceed 4.75 to 1.00 as of the last day of any quarter for the four-quarter period then ending;

• amending our interest coverage ratio such that from and after October 17, 2007 the ratio may not be less than 1.65 to 1.00 as of the last day of any quarter for the four-quarter period then ending;

• limiting the aggregate capital expenditures that we may make, or commit to make, to $30 million for any fiscal year, provided, that up to $10 million of unused capital expenditures in a fiscal year may be carried over to the succeeding fiscal year; and

• permitting sale-leaseback transactions of up to an aggregate of $175 million.

Debt Service

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. Our 2007 and 2008 operating results were significantly lower than expectations, principally due to declines in box office attendance. Based upon our current level of operations and our 2009 business plan, we believe that cash flow from operations, available cash and available borrowings under our credit agreement will be adequate to meet our liquidity needs for the next 12 months. However, the possibility exists that, if our operating performance is worse than expected or we are unable to make our debt repayments, we could come into default under our debt instruments, causing our lenders to accelerate maturity and declare all payments immediately due and payable.

The following are some factors that could affect our ability to generate sufficient cash from operations:

• further substantial declines in box office attendance, as a result of a continued general economic downturn, competition and a lack of consumers’ acceptance of the movie products in our markets; and

• inability to achieve targeted admissions and concessions price increases, due to competition in our markets.

The occurrence of these conditions could require us to seek additional funds from external sources or to refinance all or a portion of our existing indebtedness in order to meet our liquidity requirements.

We are currently required to make principal repayments of the term loans in the amount of $0.7 million on the last day of each calendar quarter. Beginning on September 30, 2011 this repayment amount will increase to $62.9 million, due on each of September 30, 2011, December 31, 2011, June 30, 2012 and May 19, 2012 and would be reduced pro-ratably based on any future debt prepayments. Any amounts that may become outstanding under the revolving credit facility would be due and payable on May 19, 2010.

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. In particular, the current global financial crisis affecting the banking system and financial markets and the possibility that financial institutions may consolidate or go out of business have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in credit and equity markets, which could affect our ability to refinance our existing obligations, obtain additional financing, or raise additional capital. If we have insufficient cash flow to fund our liquidity needs and are unable to refinance our indebtedness or raise additional capital, we could come into default under our debt instruments as described above. In addition, we may be unable to pursue growth opportunities in new and existing markets and to fund our capital expenditure needs.

Debt Covenant Compliance

As of June 30, 2009, we were in compliance with all of the financial covenants in our credit agreement. As of June 30, 2009, our leverage and interest coverage ratios were 3.6 and 2.5, respectively. We estimate that based on our 2009 forecast, which consists of actual results through June 30, 2009 and the 2009 budget approved by the Board of Directors as updated for known trends, attendance would have to decrease from the comparable period in 2008 more than 26% in one remaining quarter during 2009, or 13% for the remaining six months of the year, for us to fail to be in compliance with some or all of our financial covenants, absent other factors.

20

While we currently believe we will remain in compliance with these financial covenants through June 30, 2010 based on current projections, it is possible that we may not comply with some or all of our financial covenants. In order to avoid such non-compliance, we have the ability to reduce, postpone or cancel certain identified discretionary spending. We could also seek waivers or amendments to the credit agreement in order to avoid non-compliance. However, we can provide no assurance that we will successfully obtain such waivers or amendments from its lenders. If we are unable to comply with some or all of the financial or non-financial covenants and if we fail to obtain future waivers or amendments to the credit agreement, the lenders may terminate our revolving credit facility with respect to additional advances and may declare all or any portion of the obligations under the revolving credit facility and the term loan facilities due and payable.

Other events of default under the senior secured credit facilities include:

• our failure to pay principal on the loans when due and payable, or our failure to pay interest on the loans or to pay certain fees and expenses (subject to applicable grace periods);

• the occurrence of a change of control (as defined in the credit agreement); or

• a breach or default by us or our subsidiaries on the payment of principal of any indebtedness (as defined in the credit agreement) in an aggregate amount greater than $5 million.

The senior secured credit facilities are guaranteed by each of our subsidiaries and secured by a perfected first priority security interest in substantially all of our present and future assets.

Contractual Obligations

We did not have any material changes to our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008.

Impact of Recently Issued Accounting Standards

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which defines fair values, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The provisions of SFAS 157 were effective as of January 1, 2008 for our financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in our consolidated financial statements. For nonfinancial assets and liabilities, except those items recognized or disclosed at fair value on an annual or more frequent basis, FASB Staff Position No. FAS 157-2 (“FSP 157-2”) permits companies to adopt the provisions of SFAS 157 for fiscal years beginning after November 15, 2008. The provisions of SFAS 157 were effective as of January 1, 2009 for our nonfinancial assets and liabilities. There were no material changes in our valuation methodologies, techniques or assumptions for financial and nonfinancial assets and liabilities as a result of the adoption of SFAS 157 for such items.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”), which requires the acquirer in a business combination to measure all assets acquired and liabilities assumed at their acquisition date fair value. SFAS 141(R) applies whenever an acquirer obtains control of one or more businesses. The new standard also requires the following in a business combination:

• acquisition related costs, such as legal and due diligence costs, be expensed as incurred;

• acquirer shares issued as consideration be recorded at fair value as of the acquisition date;

• contingent consideration arrangements be included in the purchase price allocation at their acquisition date fair value;

• with certain exceptions, pre-acquisition contingencies be recorded at fair value;

• negative goodwill be recognized as income rather than as a pro rata reduction of the value allocated to particular assets;

• restructuring plans be recorded in purchase accounting only if the requirements in FASB statement No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”), are met as of the acquisition date;

• adjustments to deferred income taxes, after the purchase accounting allocation period, will be included in income rather than as an adjustment to goodwill.

SFAS 141(R) requires prospective application for business combinations consummated in fiscal years beginning on or after December 15, 2008.

In April 2009, the FASB issued FSP SFAS 107-b and Accounting Principles Board (“APB”) Opinion 28-a, “Interim Disclosures about Fair Value of Financial Instruments” (“SFAS 107-b and APB 28-a”). This FASB Staff Position (“FSP”) amends SFAS No. 107, “Disclosures about Fair Values of Financial Instruments,” to require disclosures about fair value of financial instruments in interim financial statements. This FSP is effective for interim periods ending after June 15, 2009, but early adoption was permitted for interim periods ending after March 15, 2009. The adoption of FSAS 107-b and APB 28-a did not have

21

a significant impact on our disclosures. Refer to Note 7 – Financial Instruments. An entity that elects to early adopt SFAS 107-b must also early adopt SFAS 157-e, “Determining Whether a Market is not Active and a Transaction is Not Distressed” (“SFAS 157-e”) and SFAS 115-a, “Recognition and Presentation of Other-Than Temporary Impairments” (“SFAS 115-a”). The adoption of SFAS 157-e and SFAS 115-a did not have an impact on our consolidated results of operations, financial position or valuation methodologies.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”), that establishes general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or annual periods ending after June 15, 2009. The adoption of SFAS 165 did not have a material impact on our consolidated results of operations or financial position.

Forward-Looking Information

Certain items in this report are considered forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “plan,” “estimate,” “expect,” “project,” “anticipate,” “intend,” “believe” and other words and terms of similar meaning in connection with discussion of future operating or financial performance. These statements include, among others, statements regarding our future operating results, our strategies, sources of liquidity, debt covenant compliance, the availability of film product, our capital expenditures, digital cinema implementation and the opening and closing of theatres. These statements are based on the current expectations, estimates or projections of management and do not guarantee future performance. The forward-looking statements also involve risks and uncertainties, which could cause actual outcomes and results to differ materially from what is expressed or forecasted in these statements. As a result, these statements speak only as of the date they were made and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our actual results and future trends may differ materially depending on a variety of factors, including:

• general economic conditions in our regional and national markets;

• our ability to comply with covenants contained in our senior credit agreement;

• our ability to operate at expected levels of cash flow;

• financial market conditions including, but not limited to, changes in interest rates and the availability and cost of capital;

• our ability to meet our contractual obligations, including all outstanding financing commitments;

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

• competition in our markets;

• competition with other forms of entertainment;

• the effect of leverage on our financial condition;

• prices and availability of operating supplies;

• impact of continued cost control procedures on operating results;

• the impact of asset impairments;

• the impact of terrorist acts;

• changes in tax laws, regulations and rates;

• financial, legal, tax, regulatory, legislative or accounting changes or actions that may affect the overall performance of our business; and

• other factors, including the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2008, under the caption “Risk Factors”.

Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified elsewhere in this report and our other SEC reports, accessible on the SEC’s website at www.sec.gov and our website at www.carmike.com.

22

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided under “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2008.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’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 in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including the chief executive officer and the 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.

As required by SEC rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10–Q. This evaluation was carried out under the supervision and with the participation of our management, including our chief executive officer and chief financial officer. Based on this evaluation, these officers have concluded that, as of June 30, 2009, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

As of June 30, 2009, there has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

23

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information relating to the Company’s legal proceedings, see Note 6, Commitments and Contingencies under Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

For information regarding factors that could affect the Company’s results of operations, financial condition and liquidity, see the risk factors discussed under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. See also “Forward-Looking Statements,” included in Part I, Item 2 of this Quarterly Report on Form 10-Q. There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

At the Annual Meeting of Stockholders held on May 19, 2009, six directors were elected to the Board of Directors with the following votes:

Name	For	Withheld
James A. Fleming	11,505,927	37,556
Alan J. Hirschfield	11,496,562	46,921
S. David Passman III	11,494,948	48,535
Roland C. Smith	11,494,948	48,535
Fred W. Van Noy	11,496,653	46,830
Patricia A. Wilson	11,504,104	39,379

At the same meeting, the following proposal was voted upon and approved:

Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 2009.

For	Against	Abstain
11,513,164	27,980	2,339

ITEM 5. OTHER INFORMATION

None.

24

ITEM 6. EXHIBITS

Listing of exhibits

Exhibit Number	Description
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 3.1 to Carmike’s Current Report on Form 8-k filed on January 22, 2009 and incorporated herein by reference).
10.1	Employment Agreement by and between Carmike Cinemas, Inc. and S. David Passman III, dated June 4, 2009 (filed as Exhibit 10.1 to Carmike’s current Report on Form 8-K filed on June 4, 2009 and incorporated herein by reference).
10.2	Form of Employee Stock Option Agreement pursuant to the Carmike Cinemas, Inc. 2004 Incentive Stock Plan.
10.3	Restricted Stock Grant Agreement for S. David Passman III, dated June 4, 2009, pursuant to the Carmike Cinemas, Inc. 2004 Incentive Stock Plan.
10.4	Stock Option Agreement for S. David Passman III, dated June 4, 2009, pursuant to the Carmike Cinemas, Inc. 2004 Incentive Stock Plan.
11	Computation of per share earnings (provided in Note 8 of the notes to condensed consolidated financial statements included in this report under the caption “Net Income (Loss) 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	Certificate 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	Certificate 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.

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CARMIKE CINEMAS, INC.
Date: August 3, 2009	By:	/s/ S. David Passman III
		S. David Passman III
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
Date: August 3, 2009	By:	/s/ Richard B. Hare
		Richard B. Hare
		Senior Vice President—Finance, Treasurer and Chief Financial Officer
		(Principal Financial Officer)
Date: August 3, 2009	By:	/s/ Paul G. Reitz
		Paul G. Reitz
		Assistant Vice President and Chief Accounting Officer
		(Principal Accounting Officer)

26

EX-10.2

Exhibit 10.2

CARMIKE CINEMAS, INC.

2004 INCENTIVE STOCK PLAN

EMPLOYEE

NON-INCENTIVE STOCK OPTION

OPTION CERTIFICATE

Carmike Cinemas, Inc. (“Carmike”), a Delaware corporation, in accordance with the Carmike Cinemas, Inc. 2004 Incentive Stock Plan, hereby grants an Option to [NAME], or “Eligible Employee”, to purchase from Carmike [# OF SHARES] shares of Stock at an Option Price per share equal to $xxxx, which grant shall be subject to all of the terms and conditions set forth in this Option Certificate and in the Plan. This grant has been made on [GRANT DATE], which shall be referred to as the “Grant Date”. This Option is not intended to satisfy the requirements of § 422 of the Code and thus shall be referred to as a “Non-ISO”.

CARMIKE CINEMAS, INC.

By:

Date:

TERMS AND CONDITIONS

§ 1. Plan. This Non-ISO grant is subject to all the terms and conditions set forth in the Plan and this Option Certificate, and all the terms in this Option Certificate which begin with a capital letter either are defined in this Option Certificate or in the Plan. If a determination is made that any term or condition set forth in this Option Certificate is inconsistent with the Plan, the Plan shall control. A copy of the Plan will be made available to Eligible Employee upon written request to the Chief Financial Officer of Carmike. Carmike does not intend that the special tax treatment for an ISO be available to Eligible Employee upon the exercise of this Option.

§ 2. Section 16(a). If Eligible Employee, at the time he or she proposes to exercise any rights under this Non-ISO, is an officer or director of Carmike, or is filing ownership reports with the Securities and Exchange Commission under Section 16(a) of the Exchange Act, then Eligible Employee should consult Carmike before he or she exercises such rights to determine whether the securities law might subject him or her to additional restrictions upon the exercise of such rights.

§ 3. Vesting and Exercise.

(a) Vesting. Subject to § 3(b), Eligible Employee shall automatically vest in this Option with respect to

(1)             shares of the Stock underlying this Option if Eligible Employee remains continuously employed by Carmike until –            ;

(2)             shares of the Stock underlying this Option if Eligible Employee remains continuously employed by Carmike until             ; and

(3)             shares of the Stock underlying this Option if Eligible Employee remains continuously employed by Carmike until             .

(b) Exercise.

(1) Cause. If Eligible Employee’s employment with Carmike is terminated for “Cause” (as defined in § 3(c)), Eligible Employee shall forfeit his or her right under § 3(a) to exercise all or any part of this Non-ISO at the time of his or her termination of employment.

(2) Death or Disability. If Eligible Employee’s employment with Carmike terminates by reason of his or her death or Disability (as defined in § 3(c)), the right of Eligible Employee or his or her estate (whichever is applicable) to exercise this Non-ISO shall expire on the earlier of (A) the first anniversary of the date his or her employment with Carmike terminates, or (B) the 10^th anniversary of the Grant Date.

(3) Other Reason. If Eligible Employee’s employment with Carmike terminates for any reason (other than a reason described in § 3(b)(1) or § 3(b)(2)), his or her right, if any, under § 3(a) to exercise this Non-ISO shall expire on the earlier of (A) the date which is 90 days after his or her termination of employment with Carmike, or (B) the 10^th anniversary of the Grant Date.

(c) Definitions.

(1) Affiliate. The term “Affiliate” for purposes of this Option Certificate shall mean any Subsidiary and any other organization designated as such by the Committee.

(2) Cause. The term “Cause” for purposes of this Option Certificate shall mean:

(a) Eligible Employee is convicted of, pleads guilty to, or confesses or otherwise admits to any felony or any act of fraud, misappropriation or embezzlement, or Eligible Employee otherwise engages in a fraudulent act or course of conduct;

(b) There is any act or omission by Eligible Employee involving malfeasance or negligence in the performance of Eligible Employee’s duties and responsibilities for Carmike or an Affiliate, or the exercise of Eligible Employee’s powers as an employee of Carmike, where such act or omission is reasonably likely to materially and adversely affect Carmike’s or an Affiliate’s business;

(c) Eligible Employee violates any provision of any code of conduct adopted by Carmike or an Affiliate which applies to Eligible Employee and any other employee of Carmike if the consequence to such violation for any employee of Carmike ordinarily would be the termination of his or her employment.

(3) Disability. Eligible Employee will cease to be an employee of Carmike by reason of a “Disability” if (i) Carmike determines that he or she no longer is able to perform the essential functions of his or her job at Carmike as a result of a physical or mental illness with or without a reasonable accommodation by Carmike with respect to such illness or (ii) Eligible Employee becomes entitled to long-term disability benefits under any plan of Carmike providing such benefits.

§ 4. Life of Non-ISO. This Non-ISO shall expire and shall not be exercisable for any reason on or after the 10^th anniversary of the Grant Date.

§ 5. Method of Exercise of Non-ISO. Eligible Employee may exercise this Non-ISO in whole or in part (to the extent this Non-ISO is otherwise exercisable under § 3) on any normal business day of Carmike by (1) delivering this Option Certificate to Carmike, together with written notice of the exercise of such Non-ISO and (2) simultaneously paying to Carmike the Option Price. The payment of such Option Price shall be made (1) in cash or by check acceptable to Carmike, (2) by delivery to Carmike of certificates (properly endorsed) for shares of Stock registered in Eligible Employee’s name which he or she has held for at least six months or an attestation by Eligible Employee sufficient to the

–3–

Committee that he or she then owns such shares, (3) in any combination of such cash, check, and Stock which results in payment in full of the Option Price or (4) by authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to Carmike a sufficient portion of the sale proceeds to pay the entire Option Price and any tax withholding resulting from such exercise. Stock, which is so tendered as payment (in whole or in part) of the Option Price shall be valued at its Fair Market Value on the date the Non-ISO is exercised.

§ 6. Delivery. Carmike shall deliver a properly issued certificate for any Stock purchased pursuant to the exercise of this Non-ISO as soon as practicable after such exercise, and such delivery shall discharge Carmike of all of its duties and responsibilities with respect to this Non-ISO.

§ 7. Nontransferable. No rights granted under this Non-ISO shall be transferable by Eligible Employee other than by will or by the laws of descent and distribution, and the rights granted under this Non-ISO shall be exercisable during Eligible Employee’s lifetime only by Eligible Employee. The person or persons, if any, to whom this Non-ISO is transferred by will or by the laws of descent and distribution shall be treated after Eligible Employee’s death the same as Eligible Employee under this Option Certificate.

§ 8. No Right to Continue Employment or Service. Neither the Plan, this Non-ISO, nor any related material shall give Eligible Employee the right to continue employment or other service with Carmike or any Affiliate or shall adversely affect the right of Carmike to terminate Eligible Employee’s employment with or without Cause at any time.

§ 9. Stockholder Status. Eligible Employee shall have no rights as a stockholder with respect to any shares of Stock under this Non-ISO until such shares have been duly issued and delivered to Eligible Employee, and no adjustment shall be made for dividends of any rights or any kind or description whatsoever or for distributions of other rights of any kind or description whatsoever respecting such Stock, except as set forth in the Plan.

§ 10. Other Laws. Carmike shall have the right to refuse to issue or transfer any shares of Stock under this Non-ISO if Carmike, acting in its absolute discretion, determines that the issuance or transfer of such shares of Stock might violate any applicable law or regulation, and any payment tendered in such event to exercise this Non-ISO shall be promptly refunded to Eligible Employee and Carmike at that point shall have the right to cancel this Non-ISO or to take such other action with respect to this Non-ISO as Carmike deems appropriate under the circumstances.

§ 11. Governing Law. The Plan and this Non-ISO shall be governed by the laws of the State of Delaware.

§ 12. Binding Effect. This Non-ISO shall be binding upon Carmike and Eligible Employee and their respective heirs, executors, administrators and successors.

–4–

§ 13. References. Any references to sections (§) in this Option Certificate shall be to sections (§) of this Option Certificate unless otherwise expressly stated as part of such reference.

–5–

EX-10.3

Exhibit 10.3

CARMIKE CINEMAS, INC.

2004 INCENTIVE STOCK PLAN

STOCK GRANT CERTIFICATE

This Stock Grant Certificate evidences a Stock Grant made pursuant to the Carmike Cinemas, Inc. 2004 Incentive Stock Plan of 50,000 shares of restricted Stock to S. DAVID PASSMAN III, who shall be referred to as “Executive”. This Stock Grant is granted effective as of June 4, 2009, which shall be referred to as the “Grant Date.”

CARMIKE CINEMAS, INC.
By:
	Senior Vice President
Date:	June 4, 2009

TERMS AND CONDITIONS

§ 1. Plan and Stock Grant Certificate. This Stock Grant is subject to all of the terms and conditions set forth in this Stock Grant Certificate and in the Plan. If a determination is made that any term or condition set forth in this Stock Grant Certificate is inconsistent with the Plan, the Plan shall control. All of the capitalized terms not otherwise defined in this Stock Grant Certificate shall have the same meaning in this Stock Grant Certificate as in the Plan. A copy of the Plan will be made available to Executive upon written request to the Chief Financial Officer of Carmike.

§ 2. Stockholder Status. Executive shall have the right under this Stock Grant to receive ordinary cash dividends on all of the shares of Stock subject to this Stock Grant and to vote such shares until Executive ‘s right to such shares is forfeited or becomes nonforfeitable. If Executive forfeits his shares under § 3, Executive shall at the same time forfeit Executive ‘s right to vote such shares and to receive ordinary cash dividends paid with respect to such shares. Any extraordinary cash dividends and any Stock dividends or other distributions of property made with respect to shares of Stock that remain subject to forfeiture under § 3 shall be held by Carmike, and Executive’s rights to receive such dividends or other property shall be forfeited or shall be nonforfeitable at the same time the shares of Stock with respect to which the dividends or other property are attributable are forfeited or become nonforfeitable. Except for the rights to receive ordinary cash dividends and vote the shares of Stock subject to this Stock Grant which are described in this § 2, Executive shall have no rights as a stockholder with respect to such shares of Stock until Executive’s interest in such shares has become nonforfeitable.

§ 3. Vesting and Forfeiture.

(a) Vesting. Subject to § 3(b) and § 3(c):

(i) If Executive remains continuously employed by Carmike until June 4, 2010, Executive’s interest in 16,667 shares of the Stock subject to this Stock Grant shall become nonforfeitable as of June 4, 2010;

(ii) If Executive remains continuously employed by Carmike until June 4, 2011, Executive’s interest in 16,667 shares of the Stock subject to this Stock Grant shall become nonforfeitable as of June 4, 2011; and

(iii) If Executive remains continuously employed by Carmike until June 4, 2012, Executive’s interest in 16,666 shares of the Stock subject to this Stock Grant shall become nonforfeitable as of June 4, 2012.

(b) Other Vesting Provisions.

(i) Without Cause and Good Reason. If Carmike at any time terminates Executive’s employment without Cause (as defined in the Employment Agreement between Carmike and the Executive, dated as of June 4, 2009 (the “Employment Agreement”)) or if Executive resigns during his Protection Period (as defined in the Employment Agreement) for Good Reason (as defined in the Employment Agreement), then his interest in the shares of Stock subject to this Stock Grant shall immediately become non-forfeitable.

(ii) Death or Disability. If Executive’s employment terminates during the Term (as defined in the Employment Agreement) as a result of his death or Disability (as defined in the Employment Agreement), then his interest in the shares of Stock subject to this Stock Grant shall immediately become non-forfeitable.

(c) Forfeiture. If Executive’s employment with Carmike terminates for any reason (other than a reason described in § 3(b)(i) or § 3(b)(ii)) before his interest in the shares of Stock subject to this Stock Grant have become nonforfeitable under § 3(a), the Executive shall forfeit all such shares of Stock subject to this Stock Grant which have become nonforfeitable under § 3(a).

2

§ 4. Stock Certificates. Carmike shall issue a stock certificate for the shares of Stock subject to this Stock Grant in the name of Executive upon Executive’s execution of the irrevocable stock power in favor of Carmike attached as Exhibit A. The General Counsel of Carmike shall hold such stock certificate representing such shares and any distributions made with respect to such shares (other than ordinary cash dividends) until such time as Executive’s interest in such shares has become nonforfeitable or has been forfeited. As soon as practicable after the date as of which Executive’s interest in any shares becomes nonforfeitable under § 3(a), Carmike shall issue to Executive a stock certificate reflecting the shares in which his or her interest has become nonforfeitable on such date (together with any distributions made with respect to the shares that have been held by Carmike). If shares of Stock are forfeited, such shares (together with any distributions made with respect to such shares that have been held by Carmike) automatically shall revert back to Carmike.

§ 5. Nontransferable. No rights granted under this Stock Grant Certificate shall be transferable by Executive.

§ 6. Other Laws. Carmike shall have the right to refuse to transfer shares of Stock subject to this Stock Grant to Executive if Carmike acting in its absolute discretion determines that the transfer of such shares is (in the opinion of Carmike’s legal counsel) likely to violate any applicable law or regulation.

§ 7. No Right to Continue Employment or Service. Neither the Plan, this Stock Grant Certificate, nor any related material shall give Executive the right to continue in the employment or other service of Carmike or shall adversely affect Carmike’s right to terminate Executive’s employment with or without Cause at any time.

§ 8. Governing Law. The Plan and this Stock Grant Certificate shall be governed by the laws of the State of Delaware.

§ 9. Binding Effect. This Stock Grant Certificate shall be binding upon Carmike and Executive and their respective heirs, executors, administrators and successors.

§ 10. Headings and Sections. The headings contained in this Stock Grant Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Stock Grant Certificate. All references to sections in this Stock Grant Certificate shall be to sections of this Stock Grant Certificate unless otherwise expressly stated as part of such reference.

3

Exhibit A

IRREVOCABLE STOCK POWER

As a condition to the issuance to the undersigned of a stock certificate for the 50,000 shares of Stock which were granted to the undersigned as a Stock Grant under the Carmike Cinemas, Inc. 2004 Incentive Stock Plan in the Stock Grant Certificate as of June 4, 2009, the undersigned hereby executes this Irrevocable Stock Power in order to sell, assign and transfer to Carmike Cinemas, Inc. the shares of Stock subject to such Stock Grant for purposes of effecting any forfeiture called for under § 3 of the Stock Grant Certificate and does hereby irrevocably give Carmike Cinemas, Inc. the power (without any further action on the part of the undersigned) to transfer such shares of Stock on its books and records back to Carmike Cinemas, Inc. to effect any such forfeiture. This Irrevocable Stock Power shall expire automatically with respect to the shares of Stock on the date such shares of Stock are no longer subject to forfeiture under § 3 of such Stock Grant Certificate.

Date

EX-10.4

Exhibit 10.4

CARMIKE CINEMAS, INC.

2004 INCENTIVE STOCK PLAN

EMPLOYEE

NON-INCENTIVE STOCK OPTION

OPTION CERTIFICATE

Carmike Cinemas, Inc., a Delaware corporation, in accordance with the Carmike Cinemas, Inc. 2004 Incentive Stock Plan, hereby grants an Option to S. DAVID PASSMAN III, or “Executive”, to purchase from Carmike 200,000 shares of Stock at an Option Price per share equal to $8.46, which grant shall be subject to all of the terms and conditions set forth in this Option Certificate and in the Plan. This grant has been made on June 4, 2009, which shall be referred to as the “Grant Date”. This Option is not intended to satisfy the requirements of § 422 of the Code and thus shall be referred to as a “Non-ISO”.

CARMIKE CINEMAS, INC.
By:
	Senior Vice President
Date:	June 4, 2009

TERMS AND CONDITIONS

§ 1. Plan. This Non-ISO grant is subject to all the terms and conditions set forth in the Plan and this Option Certificate, and all the terms in this Option Certificate which begin with a capital letter either are defined in this Option Certificate or in the Plan. If a determination is made that any term or condition set forth in this Option Certificate is inconsistent with the Plan, the Plan shall control. A copy of the Plan will be made available to Executive upon written request to the Chief Financial Officer of Carmike. Carmike does not intend that the special tax treatment for an ISO be available to Executive upon the exercise of this Option.

§ 2. Section 16(a). If Executive, at the time he proposes to exercise any rights under this Non-ISO, is an officer or director of Carmike, or is filing ownership reports with the Securities and Exchange Commission under Section 16(a) of the Exchange Act, then Executive should consult Carmike before he exercises such rights to determine whether the securities law might subject him to additional restrictions upon the exercise of such rights.

§ 3. Vesting and Exercise.

(a) Vesting. Subject to § 3(b), Executive shall automatically vest in this Option with respect to

(i) 66,667 shares of the Stock underlying this Option if Executive remains continuously employed by Carmike until June 4, 2010;

(ii) 66,667 shares of the Stock underlying this Option if Executive remains continuously employed by Carmike until June 4, 2011; and

(iii) 66,666 shares of the Stock underlying this Option if Executive remains continuously employed by Carmike until June 4, 2012.

(b) Other Vesting and Exercise Provisions.

(i) Without Cause and Good Reason. If Carmike at any time terminates Executive’s employment without Cause (as defined in the Employment Agreement between Carmike and the Executive, dated as of June 4, 2009 (the “Employment Agreement”)) or if Executive resigns during his Protection Period (as defined in the Employment Agreement) for Good Reason (as defined in the Employment Agreement), then each outstanding and nonvested Non-ISO represented by this Option Certificate shall become fully vested and exercisable on the date Executive’s employment so terminates and shall remain exercisable for ninety (90) days, or if less, for the remaining term of this Non-ISO (as determined as if there had been no such termination of Executive’s employment), subject to the same terms and conditions as if Executive had remained employed by Carmike for such term or such period (other than any term or condition which gives Carmike the right to cancel this Non-ISO).

(ii) Death or Disability. If Executive’s employment terminates during the Term (as defined in the Employment Agreement) as a result of his death or Disability (as defined in the Employment Agreement), then each outstanding and nonvested Non-ISO represented by this Option Certificate shall become fully vested and exercisable on the date Executive’s employment so terminates and shall remain exercisable for one hundred eighty (180) days, or if less, for the remaining term of this Non-ISO (as determined as if there had been no

–2–

such termination of Executive’s employment), subject to the same terms and conditions as if Executive had remained employed by Carmike for such term or such period (other than any term or condition which gives Carmike the right to cancel this Non-ISO).

(iii) Cause. If Executive’s employment with Carmike is terminated for Cause (as defined in the Employment Agreement), Executive shall forfeit his right under § 3 to exercise all or any part of this Non-ISO at the time of his termination of employment.

(iv) Other Reason. If Executive’s employment with Carmike terminates for any reason (other than a reason described in § 3(b)(i), § 3(b)(ii) or § 3(b)(iii)), his right, if any, under § 3 to exercise the Option represented by this Option Certificate shall expire on the earlier of (A) the date which is ninety (90) days after his termination of employment with Carmike, or (B) the date this Non-ISO expires.

§ 4. Life of Non-ISO. This Non-ISO shall expire and shall not be exercisable for any reason on or after the 10^th anniversary of the Grant Date.

§ 5. Method of Exercise of Non-ISO. Executive may exercise this Non-ISO in whole or in part (to the extent this Non-ISO is otherwise exercisable under § 3) on any normal business day of Carmike by (1) delivering this Option Certificate to Carmike, together with written notice of the exercise of such Non-ISO and (2) simultaneously paying to Carmike the Option Price. The payment of such Option Price shall be made (1) in cash or by check acceptable to Carmike, (2) by delivery to Carmike of certificates (properly endorsed) for shares of Stock registered in Executive’s name which he has held for at least six months or an attestation by Executive sufficient to the Committee that he then owns such shares, (3) in any combination of such cash, check, and Stock which results in payment in full of the Option Price or (4) by authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to Carmike a sufficient portion of the sale proceeds to pay the entire Option Price and any tax withholding resulting from such exercise. Stock, which is so tendered as payment (in whole or in part) of the Option Price shall be valued at its Fair Market Value on the date the Non-ISO is exercised.

§ 6. Delivery. Carmike shall deliver a properly issued certificate for any Stock purchased pursuant to the exercise of this Non-ISO as soon as practicable after such exercise, and such delivery shall discharge Carmike of all of its duties and responsibilities with respect to this Non-ISO.

§ 7. Nontransferable. No rights granted under this Non-ISO shall be transferable by Executive other than by will or by the laws of descent and distribution, and the rights

–3–

granted under this Non-ISO shall be exercisable during Executive’s lifetime only by Executive . The person or persons, if any, to whom this Non-ISO is transferred by will or by the laws of descent and distribution shall be treated after Executive’s death the same as Executive under this Option Certificate.

§ 8. No Right to Continue Employment or Service. Neither the Plan, this Non-ISO, nor any related material shall give Executive the right to continue employment or other service with Carmike or any Affiliate of Carmike, or shall adversely affect the right of Carmike to terminate Executive’s employment with or without Cause at any time.

§ 9. Stockholder Status. Executive shall have no rights as a stockholder with respect to any shares of Stock under this Non-ISO until such shares have been duly issued and delivered to Executive , and no adjustment shall be made for dividends of any rights or any kind or description whatsoever or for distributions of other rights of any kind or description whatsoever respecting such Stock, except as set forth in the Plan.

§ 10. Other Laws. Carmike shall have the right to refuse to issue or transfer any shares of Stock under this Non-ISO if Carmike, acting in its absolute discretion, determines that the issuance or transfer of such shares of Stock might violate any applicable law or regulation, and any payment tendered in such event to exercise this Non-ISO shall be promptly refunded to Executive and Carmike at that point shall have the right to cancel this Non-ISO or to take such other action with respect to this Non-ISO as Carmike deems appropriate under the circumstances.

§11. Governing Law. The Plan and this Non-ISO shall be governed by the laws of the State of Delaware.

§ 12. Binding Effect. This Non-ISO shall be binding upon Carmike and Executive and their respective heirs, executors, administrators and successors.

§ 13. References. Any references to sections (§) in this Option Certificate shall be to sections (§) of this Option Certificate unless otherwise expressly stated as part of such reference.

–4–

EX-31.1

Exhibit 31.1

CERTIFICATE OF CHIEF EXECUTIVE OFFICER

I, S. David Passman III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Carmike Cinemas, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2009

/s/ S. David Passman III

President, Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATE OF CHIEF FINANCIAL OFFICER

I, Richard B. Hare, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Carmike Cinemas, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2009

/s/ Richard B. Hare

Richard B. Hare

Senior Vice President-Finance, Treasurer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Carmike Cinemas, Inc. on Form 10-Q for the period ended June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, S. David Passman III, the Chief Executive Officer of the registrant, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

Date: August 3, 2009

/s/ S. David Passman III

President, Chief Executive Officer and Director

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Carmike Cinemas, Inc. on Form 10-Q for the period ended June 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard B. Hare, Chief Financial Officer of the registrant, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

Date: August 3, 2009

/s/ Richard B. Hare

Richard B. Hare

Senior Vice President-Finance, Treasurer and Chief Financial Officer