NOTE 14—GUARANTOR SUBSIDIARIES

In June 2012, the Company issued in a registered exchange offer $210,000 aggregate principal amount of 7.375% Senior Secured Notes due May 15, 2019. The Senior Secured Notes are fully and unconditionally guaranteed, on a joint and several basis, by the following 100% directly or indirectly owned subsidiaries (the “Guarantor Subsidiaries”): Eastwynn Theatres, Inc., George G. Kerasotes Corporation, GKC Indiana Theatres, Inc., GKC Michigan Theatres, Inc., GKC Theatres, Inc., Military Services, Inc., Carmike Giftco, Inc., Carmike Reviews Holdings, LLC, Carmike Motion Pictures Birmingham, LLC, Carmike Motion Pictures Birmingham II, LLC, Carmike Motion Pictures Birmingham III, LLC, Carmike Motion Pictures Chattanooga, LLC, Carmike Motion Pictures Daphne, LLC, Carmike Motion Pictures Pensacola, LLC, Carmike Motion Pictures Pensacola II, LLC, Carmike Motion Pictures Indianapolis, LLC, Carmike Motion Pictures Huntsville, LLC, Carmike Motion Pictures Ft. Wayne, LLC, Carmike Motion Pictures Melbourne, LLC, Carmike Motion Pictures Peoria, LLC, Carmike Motion Pictures Port St. Lucie, LLC, Carmike Motion Pictures Orange Beach, LLC, Carmike Motion Pictures Allentown, LLC, Carmike Houston LP, LLC, Carmike Houston GP, LLC, Carmike Motion Pictures Houston, LLC and Seth Childs 12 of Kansas L.L.C.

Subsequent to the issuance of the March 31, 2013 consolidated financial statements, the Company determined it needed to revise its presentation with respect to the supplemental financial information included in this footnote. The revised presentation corrects errors identified in the allocation of interest expense, and the resulting income tax expense, between the Company and its Guarantor Subsidiaries on the consolidating statement of operations, as well as the impact of these revisions on the consolidating balance sheets and statements of cash flows. The Company had previously allocated interest expense between the Company and its Guarantor Subsidiaries while the related debt obligation was recognized only by the Company. These revisions relate solely to transactions between the Company and its subsidiaries and only impact the financial statements presented in this footnote. They do not affect the Company’s consolidated financial statements.

The Company’s consolidating statements of operations are being revised in order to allocate the portion of (A) interest expense, and the related income tax expense, between the Company and its Guarantor Subsidiaries.


Parent Column as of March 31, 2013	As Previously Reported			Adjustments to Earnings of Subsidiaries, Loss from Continuing Operations and Net Loss			As Revised
(in thousands)
Interest expense	$	2,025		$	3,321	A	$	5,346
Equity in loss of subsidiaries	$	4,801		$	(1,672	)	$	3,129
Loss before income tax and income from unconsolidated affiliates	$	(5,705	)	$	(1,611	)	$	(7,316	)
Income tax benefit	$	(1,008	)	$	(1,647	) A	$	(2,655	)
Loss from continuing operations	$	(5,785	)	$	36		$	(5,749	)
Net loss	$	(5,783	)	$	—		$	(5,783	)

				Adjustments to
	As			Earnings of Subsidiaries,
Guarantor Column as of March 31, 2013	Previously Reported			Loss from Continuing Operations and Net Loss			As Revised
(in thousands)
Interest expense	$	10,273		$	(3,321	) A	$	6,952
Equity in loss of subsidiaries	$	—		$	—		$	—
Loss before income tax and income from unconsolidated affiliates	$	(8,089	)	$	3,394		$	(4,695	)
Income tax benefit	$	(3,289	)	$	1,693	A	$	(1,596	)
Loss from continuing operations	$	(4,727	)	$	1,701		$	(3,026	)
Net loss	$	(4,801	)	$	1,672		$	(3,129	)

				Adjustments to
	As			Earnings of Subsidiaries,
Eliminations Column as of March 31, 2013	Previously Reported			Loss from Continuing Operations and Net Loss			As Revised
(in thousands)
Interest expense	$	—		$	—		$	—
Equity in loss of subsidiaries	$	(4,801	)	$	1,672		$	(3,129	)
Loss before income tax and income from unconsolidated affiliates	$	4,801		$	(1,672	)	$	3,129
Income tax benefit	$	—		$	—		$	—
Loss from continuing operations	$	4,801		$	(1,672	)	$	3,129
Net loss	$	4,801		$	(1,672	)	$	3,129

The Company has determined that in its consolidating statements of cash flows, it needed to adjust for (B) the change in intercompany accounts due to the revised allocation of interest expense to the Company and its Guarantor Subsidiaries and (C) the classification of the net intercompany funding activity of the Company, which was previously included as an element of cash flows from financing activities.

The following is a reconciliation of the amounts previously reported to the “as revised” amounts as stated in the following components of the consolidating statements of cash flows for the three months ended March 31, 2013:


	As			Adjustments for non-cash
Parent Column as of March 31, 2013	Previously Reported			activity, distributions, dividends & intercompany			As Revised
(in thousands)
Net cash provided by operating activities	$	7,831		$	(3,321	)	$	4,510
Cash flows from investing activities: Intercompany	$	—		$	(2,292	) B,C	$	(2,292	)
Net cash used in investing activities	$	(2,419	)	$	(2,292	)	$	(4,711	)
Cash flows from financing activities: Intercompany	$	(5,613	)	$	5,613	B,C	$	—
Net cash (used in) provided by financing activities	$	(5,890	)	$	5,613		$	(277	)

	As			Adjustments for non-cash
Guarantor Column as of March 31, 2013	Previously Reported			activity, distributions, dividends & intercompany			As Revised
(in thousands)
Net cash provided by operating activities	$	(2,007	)	$	3,321		$	1,314
Cash flows from investing activities: Intercompany	$	—		$	—	B,C	$	—
Net cash used in investing activities	$	(7,149	)	$	—		$	(7,149	)
Cash flows from financing activities: Intercompany	$	5,613		$	(3,321	) B,C	$	2,292
Net cash (used in) provided by financing activities	$	4,745		$	(3,321	)	$	1,424

	As			Adjustments for non-cash
Eliminations Column as of March 31, 2013	Previously Reported			activity, distributions, dividends & intercompany			As Revised
(in thousands)
Net cash provided by operating activities	$	—		$	—		$	—
Cash flows from investing activities: Intercompany	$	—		$	2,292	B,C	$	2,292
Net cash used in investing activities	$	—		$	2,292		$	2,292
Cash flows from financing activities: Intercompany	$	—		$	(2,292	) B,C	$	(2,292	)
Net cash (used in) provided by financing activities	$	—		$	(2,292	)	$	(2,292	)

The Company is providing the following condensed consolidating financial statement information as of March 31, 2014 and December 31, 2013 and for the three months ended March 31, 2014 and 2013 in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered:

CONDENSED CONSOLIDATING BALANCE SHEET


	As of March 31, 2014
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Assets:
Current assets:
Cash and cash equivalents	$	104,949		$	28,961		$	—		$	133,910
Restricted cash		297			—			—			297
Accounts receivable		9,343			6,401			(5,671	)		10,073
Inventories		742			2,549			—			3,291
Deferred income tax asset		4,427			—			(510	)		3,917
Prepaid expenses and other current assets		25,478			8,827			(17,099	)		17,206

Total current assets		145,236			46,738			(23,280	)		168,694


Property and equipment:
Land		11,864			41,902			—			53,766
Buildings and building improvements		48,153			294,144			—			342,297
Leasehold improvements		22,335			143,220			—			165,555
Assets under capital leases		8,675			40,995			—			49,670
Equipment		70,811			185,797			—			256,608
Construction in progress		7,952			4,699			—			12,651

Total property and equipment		169,790			710,757			—			880,547
Accumulated depreciation and amortization		(87,012	)		(326,544	)		—			(413,556	)

Property and equipment, net of accumulated depreciation		82,778			384,213			—			466,991

Intercompany receivables		96,202			—			(96,202	)		—
Investments in subsidiaries		174,770			—			(174,770	)		—
Goodwill		7,662			67,465			—			75,127
Intangible assets, net of accumulated amortization		—			931			—			931
Investments in unconsolidated affiliates		5,518			854			—			6,372
Deferred income tax asset		57,047			43,283			—			100,330
Other		12,409			6,878			—			19,287

Total assets	$	581,622		$	550,362		$	(294,252	)	$	837,732


Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	32,023		$	10,301		$	(5,671	)	$	36,653
Accrued expenses		27,662			38,040			(17,609	)		48,093
Current maturities of capital leases and long-term financing obligations		896			6,335			—			7,231

Total current liabilities		60,581			54,676			(23,280	)		91,977

Long-term liabilities:
Long-term debt		209,637			—			—			209,637
Capital leases and long-term financing obligations, less current maturities		32,274			204,530			—			236,804
Intercompany liabilities		—			96,202			(96,202	)		—
Deferred revenue		31,537			—			—			31,537
Other		5,632			20,184			—			25,816

Total long-term liabilities		279,080			320,916			(96,202	)		503,794


Stockholders’ equity:
Preferred stock		—			—			—			—
Common stock		701			1			(1	)		701
Treasury stock		(13,397	)		—			—			(13,397	)
Paid-in capital		441,100			260,013			(260,013	)		441,100
Accumulated deficit		(186,443	)		(85,244	)		85,244			(186,443	)

Total stockholders’ equity		241,961			174,770			(174,770	)		241,961

Total liabilities and stockholders’ equity	$	581,622		$	550,362		$	(294,252	)	$	837,732

CONDENSED CONSOLIDATING BALANCE SHEET


	As of December 31, 2013
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Assets:
Current assets:
Cash and cash equivalents	$	99,153		$	44,714		$	—		$	143,867
Restricted cash		352			—			—			352
Accounts receivable		7,282			9,138			(7,907	)		8,513
Inventories		766			2,925			—			3,691
Deferred income tax asset		4,162			—			(324	)		3,838
Prepaid expenses and other current assets		9,071			9,314			(3,740	)		14,645

Total current assets		120,786			66,091			(11,971	)		174,906


Property and equipment:
Land		12,080			41,902			—			53,982
Buildings and building improvements		48,104			292,855			—			340,959
Leasehold improvements		22,040			142,035			—			164,075
Assets under capital leases		8,675			40,995			—			49,670
Equipment		70,045			183,845			—			253,890
Construction in progress		3,613			3,588			—			7,201

Total property and equipment		164,557			705,220			—			869,777
Accumulated depreciation and amortization		(84,861	)		(317,161	)		—			(402,022	)

Property and equipment, net of accumulated depreciation		79,696			388,059			—			467,755

Intercompany receivables		112,209			—			(112,209	)		—
Investments in subsidiaries		175,042			—			(175,042	)		—
Goodwill		6,912			67,465			—			74,377
Intangible assets, net of accumulated amortization		—			957			—			957
Investments in unconsolidated affiliates		6,188			885			—			7,073
Deferred income tax asset		56,858			43,185			—			100,043
Other assets		12,922			6,588			—			19,510

Total assets	$	570,613		$	573,230		$	(299,222	)	$	844,621


Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	34,766		$	16,462		$	(7,907	)	$	43,321
Accrued expenses		9,731			36,912			(4,064	)		42,579
Current maturities of capital leases and long-term financing obligations		836			6,034			—			6,870

Total current liabilities		45,333			59,408			(11,971	)		92,770

Long-term liabilities:
Long-term debt		209,619			—			—			209,619
Capital leases and long-term financing obligations, less current maturities		32,497			206,266			—			238,763
Intercompany liabilities		—			112,209			(112,209	)		—
Deferred revenue		31,827			—			—			31,827
Other		5,526			20,305			—			25,831

Total long-term liabilities		279,469			338,780			(112,209	)		506,040


Stockholders’ equity:
Preferred stock		—			—			—			—
Common stock		698			1			(1	)		698
Treasury stock		(11,914	)		—			—			(11,914	)
Paid-in capital		440,306			260,013			(260,013	)		440,306
Accumulated deficit		(183,279	)		(84,972	)		84,972			(183,279	)

Total stockholders’ equity		245,811			175,042			(175,042	)		245,811

Total liabilities and stockholders’ equity	$	570,613		$	573,230		$	(299,222	)	$	844,621

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended March 31, 2014
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Admissions	$	14,237		$	83,335		$	—		$	97,572
Concessions and other		17,463			51,645			(7,756	)		61,352

Total operating revenues		31,700			134,980			(7,756	)		158,924

Operating costs and expenses:
Film exhibition costs		7,790			45,099			—			52,889
Concession costs		1,176			5,943			—			7,119
Salaries and benefits		3,628			17,906			—			21,534
Theatre occupancy costs		3,159			17,202			—			20,361
Other theatre operating costs		6,140			30,998			(7,756	)		29,382
General and administrative expenses		6,845			653			—			7,498
Depreciation and amortization		2,193			9,578			—			11,771
Gain on sale of property and equipment		(7	)		(60	)		—			(67	)
Impairment of long-lived assets		3			355			—			358

Total operating costs and expenses		30,927			127,674			(7,756	)		150,845

Operating income		773			7,306			—			8,079
Interest expense		5,515			7,601			—			13,116
Equity in loss of subsidiaries		256			—			(256	)		—

Loss before income tax and (loss) income from unconsolidated affiliates		(4,998	)		(295	)		256			(5,037	)
Income tax benefit		(2,009	)		(1	)		—			(2,010	)
(Loss) income from unconsolidated affiliates		(180	)		95			—			(85	)

Loss from continuing operations		(3,169	)		(199	)		256			(3,112	)
Income (loss) from discontinued operations		5			(57	)		—			(52	)

Net loss	$	(3,164	)	$	(256	)	$	256		$	(3,164	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended March 31, 2013 As Revised
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Admissions	$	11,148		$	69,907		$	—		$	81,055
Concessions and other		13,905			40,793			(6,470	)		48,228

Total operating revenues		25,053			110,700			(6,470	)		129,283

Operating costs and expenses:
Film exhibition costs		5,985			37,031			—			43,016
Concession costs		893			5,036			—			5,929
Salaries and benefits		2,882			15,477			—			18,359
Theatre occupancy costs		1,631			13,583			—			15,214
Other theatre operating costs		5,193			25,075			(6,470	)		23,798
General and administrative expenses		5,429			586			—			6,015
Lease termination charges		—			3,063			—			3,063
Depreciation and amortization		1,876			8,325			—			10,201
Loss on sale of property and equipment		5			75			—			80
Impairment of long-lived assets		—			192			—			192

Total operating costs and expenses		23,894			108,443			(6,470	)		125,867

Operating income		1,159			2,257			—			3,416
Interest expense		5,346			6,952			—			12,298
Equity in loss of subsidiaries		3,129			—			(3,129	)		—

Loss before income tax and income from unconsolidated affiliates		(7,316	)		(4,695	)		3,129			(8,882	)
Income tax benefit		(2,655	)		(1,596	)		—			(4,251	)
(Loss) income from unconsolidated affiliates		(1,088	)		73			—			(1,015	)

Loss from continuing operations		(5,749	)	$	(3,026	)	$	3,129		$	(5,646	)
Loss from discontinued operations		(34	)		(103	)		—			(137	)

Net loss	$	(5,783	)	$	(3,129	)	$	3,129		$	(5,783	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


	For the Three Months Ended March 31, 2014
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash (used in) provided by operating activities		(7,362	)		7,783			—			421

Cash flows from investing activities:
Purchases of property and equipment		(1,424	)		(6,030	)		—			(7,454	)
Investment in unconsolidated affiliates		—			(3	)		—			(3	)
Proceeds from sale of property and equipment		222			41			—			263
Intercompany receivable		16,016			—			(16,016	)		—
Other investing activities		55			—			—			55

Net cash provided by (used in) investing activities		14,869			(5,992	)		(16,016	)		(7,139	)

Cash flows from financing activities:
Repayments of capital leases and long-term financing obligations		(228	)		(1,528	)		—			(1,756	)
Purchase of treasury stock		(1,483	)		—			—			(1,483	)
Intercompany payable		—			(16,016	)		16,016			—

Net cash used in financing activities		(1,711	)		(17,544	)		16,016			(3,239	)


Increase (decrease) in cash and cash equivalents		5,796			(15,753	)		—			(9,957	)
Cash and cash equivalents at beginning of period		99,153			44,714			—			143,867

Cash and cash equivalents at end of period		104,949			28,961			—			133,910

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


	For the Three Months Ended March 31, 2103 As Revised
	Carmike Cinemas, Inc.			Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities		4,510			1,314			—			5,824

Cash flows from investing activities:
Purchases of property and equipment		(2,708	)		(5,800	)		—			(8,508	)
Theatre acquistion		—			(1,349	)		—			(1,349	)
Proceeds from sale of property and equipment		5			—			—			5
Other investing activities		284			—			—			284
Intercompany receivable		(2,292	)		—			2,292			—

Net cash used in investing activities		(4,711	)		(7,149	)		2,292			(9,568	)

Cash flows from financing activities:
Repayments of capital leases and long-term financing obligations		(103	)		(868	)		—			(971	)
Purchase of treasury stock		(174	)		—			—			(174	)
Intercompany payable		—			2,292			(2,292	)		—

Net cash (used in) provided by financing activities		(277	)		1,424			(2,292	)		(1,145	)


Decrease in cash and cash equivalents		(478	)		(4,411	)		—			(4,889	)
Cash and cash equivalents at beginning of period		49,093			19,438			—			68,531

Cash and cash equivalents at end of period		48,615			15,027			—			63,642