SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

OR

Commission File Number 000-14993

CARMIKE CINEMAS, INC.

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

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

None

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

Common Stock, par value $.03 per share

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

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

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

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

     As of March 15, 2004, 12,088,512 shares of Common Stock were outstanding. The aggregate market value of the shares of Common Stock, par value $.03 per share, held by non-affiliates was approximately $281,035,603.

Documents Incorporated by Reference

     Specified portions of Carmike Cinemas, Inc.’s Proxy Statement relating to the 2004 Annual Meeting of Stockholders are incorporated by reference into Part III.

Table of Contents

*

Incorporated by reference from Proxy Statement relating to the 2004 Annual Meeting of Stockholders.

1

PART I

ITEM 1. BUSINESS.

Overview

     We are one of the largest motion picture exhibitors in the United States. As of December 31, 2003, we owned, operated or had an interest in 299 theatres with 2,253 screens located in 35 states, making us the second largest exhibitor in the country by number of theatres and the fourth largest by number of screens. We owned 70 of these theatres, leased 225 of these theatres and operated an additional four theatres under shared ownership. Of our 299 theatres, 259 show films on a first-run basis and 40 are discount theatres.

     We target small- to mid-size non-urban markets. More than 80% of our theatres are located in communities with populations of fewer than 100,000 people. We believe there are several benefits of operating in small- to mid-size markets, including:

•		Less competition from other exhibitors. We believe a majority of our theatres have limited competition for patrons. We believe most of our markets are already adequately screened and our smaller markets in particular cannot support significantly more screens. In addition, because most of our principal competitors are focused on building megaplexes, we do not expect many of our markets to be targeted by our competitors for new theatres.
•		Lower operating costs. We believe that we benefit from lower labor, occupancy and maintenance costs than most other large exhibitors. For example, as of December 31, 2003, approximately 48% of our hourly employees worked for the federal minimum wage. Additionally, we own 70, or approximately 23%, of our theatres, which we believe provides us with further cost benefits. We believe the percentage of our owned theatres is among the highest of the large public theatre exhibitors.
•		Fewer alternative entertainment opportunities. In our typical markets, patrons have fewer entertainment alternatives than in larger markets, where options such as professional sports and cultural events are more likely to be available.
•		Greater access to film product. We believe we are the sole exhibitor in 74.4% of our film licensing zones, which we believe provides us with greater flexibility in selecting films that meet the preferences of patrons in our markets.

2

     The following table sets forth geographic information regarding our theatre circuit as of December 31, 2003:

     From time to time, we convert weaker performing theatres to discount theatres for the exhibition of films that have previously been shown on a first-run basis. Many of these theatres are typically in smaller markets where we are the only exhibitor in the market. At December 31, 2003, we operated 40 theatres with 165 screens as discount theatres. We also operate a very small number of theatres for the exhibition of first-run films at a reduced admission price.

     We are the sole exhibitor in many of the small- to mid-size markets in which we operate. The introduction of a competing theatre in these markets could significantly impact the performance of our theatres. In addition, the type of motion pictures preferred by patrons in these markets is typically more limited than in larger markets, which increases the importance of selecting films that will appeal to patrons in our specific theatre markets.

Theatre Development and Operations

Development

     We carefully review small- to mid-size markets to evaluate the return on capital of opportunities to build new theatres or renovate our existing theatres. The circumstances under which we believe we are best positioned to benefit from building new theatres are in markets in which:

•		we believe building a new theatre provides an attractive cash flow opportunity;
•		we already operate a theatre and could best protect that theatre by expanding our presence;

     or

3

•

a film licensing zone is currently underserved by an exhibitor.

     In general, we do not believe that building theatres in film licensing zones in which competitors operate provides attractive investment opportunities for us.

     Our bankruptcy, as discussed below under the caption “Our Reorganization”, and the excessive number of screens resulting from the industry’s overbuilding of theatres in the last few years have been significant influences on our current growth strategy. We opened two theatres during the year ended December 31, 2003. If opportunities exist where new construction will be profitable to us, we will consider building additional theatres in future periods. From our bankruptcy through December 31, 2003, we closed 33% of our theatres. We continuously analyze our theatres and evaluate approaches to optimize our portfolio.

     The following table shows information about the changes in our theatre circuit during the periods presented:

Operations

     Our theatre operations are under the supervision of our Chief Operating Officer, General Manager of Operations and four division managers. The division managers are responsible for implementing our operating policies and supervising our eighteen operating districts. Each operating district has a district manager who is responsible for overseeing the day-to-day operations of our theatres. Corporate policy development, strategic planning, site selection and lease negotiation, theatre design and construction, concession purchasing, film licensing, advertising, and financial and accounting activities are centralized at our corporate headquarters.

     We have an incentive bonus program for theatre level management, which provides for bonuses based on incremental improvements in theatre profitability, including concession sales. As part of this program, we evaluate “mystery shopper” reports on the quality of service, cleanliness and film presentation at individual theatres.

     Box office admissions. The majority of our revenues come from the sale of movie tickets. For the year ended December 31, 2003, box office admissions totaled $332.1 million, or 67% of total revenues. At December 31, 2003, of our 299 theatres, 259 showed “first-run” films, which we

4

license from distributors owned by the major studios, as well as from independent distributors. The remaining 40 of our theatres featured pictures at a discount price.

     Most of the tickets we sell are sold at our theatre box offices immediately before the start of a picture. As of December 31, 2003, at 38 of our theatres, patrons can buy tickets in advance either over the phone or on the Internet. These alternate sales methods do not currently represent a meaningful portion of our revenues, nor are they expected to be in the near term.

     Concessions. Concession sales are our second largest revenue source after box office admissions, constituting 30% of total revenues for the year ended December 31, 2003. Our strategy emphasizes quick and efficient service built around a limited menu primarily focused on higher margin items such as popcorn, candy and soft drinks. In addition, in a limited number of markets, we offer bottled water, frozen drinks, coffee, ice cream, hot dogs and pretzels in order to respond to competitive conditions. We actively seek to promote concession sales through the design and appearance of our concession stands, the introduction of special promotions from time to time, by reducing wait times and by training our employees to up-sell products. In addition, our management incentive bonus program includes concession results as a component of determining the bonus awards. We manage all inventory purchasing centrally with authority required from our central office before orders may be placed.

     During 2003, we purchased substantially all of our concession supplies and janitorial supplies from Showtime Concession, except for beverage supplies. We are by far the largest customer of Showtime Concession. Our current agreement with Showtime Concession will expire on December 8, 2006. If this relationship were disrupted, we could be forced to negotiate a number of substitute arrangements with alternative vendors which are likely to be, in the aggregate, less favorable to us than the current arrangement.

     During 2003, we purchased our beverage supplies from The Coca-Cola Company. Our current agreement with The Coca-Cola Company will expire on June 30, 2004. Under the agreement, The Coca-Cola Company may raise beverage supply costs and, in fact, has increased such costs by 3.3% beginning January 31, 2004 through the term of the agreement. If beverage supply costs are increased at a higher rate or we are unable to negotiate favorable terms with The Coca-Cola Company or a competing beverage supplier when the agreement is up for renewal, our margins on concessions may be negatively impacted.

     Other revenues. Most of our theatres include electronic video games located in or adjacent to the lobby. We also generate revenues through on-screen advertising on all of our screens. We operate two family entertainment centers under the name Hollywood Connection® which feature multiplex theatres and other forms of family entertainment. These revenue streams comprised the remaining 3% of our revenue generation for the year ended December 31, 2003.

Film Licensing

     We obtain licenses to exhibit films by directly negotiating with film distributors. We license films through our booking office located in Columbus, Georgia. Our Senior Vice President - Film, in consultation with our Chief Executive Officer, directs our motion picture bookings.

5

     Prior to negotiating for a film license, our Senior Vice President - Film and film-booking personnel evaluate the prospects for upcoming films. The criteria considered for each film include cast, director, plot, performance of similar films, estimated film rental costs and expected MPAA rating. Because we only license a portion of newly released first-run films, our success in licensing depends greatly upon the availability of commercially popular motion pictures, but also upon our knowledge of the preferences of patrons in our markets and insight into trends in those preferences. We maintain a database that includes revenue information on films previously exhibited in our markets. We use this historical information to match new films with particular markets so as to maximize revenues. The table below depicts the industry’s top 10 films for the year ended December 31, 2003 compared to our top 10 films for the same period, based on reported gross receipts:

Film Rental Fees

     We typically enter into licenses that provide for rental fees based on either “firm terms” established prior to the opening of the picture or on a mutually agreed “settlement” upon the conclusion of the film run. Under a firm terms formula, we pay the distributor a specified percentage of the box office receipts, and this percentage declines over the term of the run. Firm term film rental fees are generally the greater of (1) 60 to 70% of gross box office receipts, gradually declining to as low as 30% over a period of four to seven weeks or (2) a specified percentage (e.g., 90%) of the excess gross box office receipts over a negotiated allowance for theatre expenses (commonly known as a “90-10” arrangement). The settlement process allows for negotiation based upon how a film actually performs. A firm terms agreement could result in lower than anticipated film rent if the film outperforms expectations especially with respect to the film’s run and, conversely, there is a downside risk when the film underperforms.

Film Licensing Zones

     Film licensing zones are geographic areas established by film distributors where any given film is allocated to only one theatre within that area. In our markets, these zones generally encompass three to five miles. In film licensing zones where we have little or no competition, we obtain film licenses by selecting a film from among those offered and negotiating directly with the distributor. In competitive film licensing zones, a distributor will allocate its films among the exhibitors in the zone. When films are licensed under the allocation process, a

6

distributor will choose which exhibitor is offered a movie and then that exhibitor will negotiate film rental terms directly with the distributor for the film.

Relationship With Distributors

     We depend on, among other things, the quality, quantity, availability and acceptance by movie-going customers of the motion pictures produced by the motion picture production companies and licensed for exhibition to the motion picture exhibitors by distribution companies. Disruption in the production of motion pictures by the major studios and/or independent producers or poor performance of motion pictures could have an adverse effect on our business.

     While there are numerous distributors that provide quality first-run movies to the motion picture exhibition industry, the following ten major distributors accounted for approximately 99.8% of our box office admissions for the year ended December 31, 2003: Buena Vista, DreamWorks, Fox, MGM/UA, Miramax, New Line Cinema, Paramount, Sony, Universal and Warner Brothers.

Management Information Systems

     We have developed a proprietary computer system, which we call IQ-Zero, that is installed in each of our theatres. IQ-Zero allows us to centralize most theatre-level administrative functions at our corporate headquarters, creating significant operating leverage. IQ-Zero allows corporate management to monitor ticket and concession sales and box office and concession staffing on a daily basis, enabling our theatre managers to focus on the day-to-day operations of the theatre. In addition, it also coordinates payroll, tracks theatre invoices and generates operating reports analyzing film performance and theatre profitability. IQ-Zero also generates information we use to quickly detect theft. IQ-2000 is an enhanced version of the IQ-Zero system and has been installed in our theatres built since 1999. IQ-2000 facilitates new services such as advanced ticket sales and Internet ticket sales. Its expanded capacity will allow for future growth and more detailed data tracking and trend analysis. There is active communication between the theatres and corporate headquarters, which allows our senior management to react to vital profit and staffing information on a daily basis and perform the majority of the theatre-level administrative functions.

Competition

     The motion picture exhibition industry is fragmented and highly competitive. In markets where we are not the sole exhibitor, we compete against regional and independent operators as well as the larger theatre circuit operators.

     Our operations are subject to varying degrees of competition with respect to film licensing, attracting customers, obtaining new theatre sites or acquiring theatre circuits. In those areas where real estate is readily available, there are few barriers preventing competing companies from opening theatres near one of our existing theatres, which may have a material adverse effect on our theatres. Competitors have built or are planning to build theatres in certain areas in which

7

we operate, which have resulted and may continue to result in excess capacity in such areas which adversely affects attendance and pricing at our theatres in such areas.

     From the mid- to late-1990s, industry screen count grew faster than attendance. As a result of this rapid overbuilding, the total number of screens reached an all-time high of 37,396 in 2000, according to the MPAA. When the economics of many of these theatres became unsustainable, most major exhibitors, ourselves included, were required to restructure and to close underperforming locations. At December 31, 2003, the domestic screen count had declined to 35,786. We believe the reduction in screen count, combined with the trends described above, has meaningfully improved the economics of the film exhibition industry.

     The opening of large multiplexes and theatres with stadium seating by us and certain of our competitors has tended to, and is expected to continue to, draw audiences away from certain older and smaller theatres, including theatres operated by us. In addition, demographic changes and competitive pressures can lead to a theatre location becoming impaired. However, at this time we are not aware of any such situations.

     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.

Regulatory Environment

     The distribution of motion pictures is in large part regulated by federal and state antitrust laws and has been the subject of numerous antitrust cases. Certain consent decrees resulting from such cases bind certain major motion picture distributors and require the motion pictures of such distributors to be offered and licensed to exhibitors, including us, on a theatre-by-theatre basis. Consequently, exhibitors such as our company cannot assure themselves of a supply of motion pictures by entering into long-term arrangements with major distributors but must compete for licenses on a film-by-film and theatre-by-theatre basis.

     The Americans with Disabilities Act (“ADA”), which became effective in 1992, and certain state statutes and local ordinances, among other things, require that places of public accommodation, including theatres (both existing and newly constructed), be accessible to patrons with disabilities. The ADA requires that theatres be constructed to permit persons with disabilities full use of a theatre and its facilities. Also, the ADA may require certain modifications be made to existing theatres in order to make them accessible to patrons and employees who are disabled. For example, we are aware of several lawsuits that have been filed against other exhibitors by disabled moviegoers alleging that certain stadium seating designs violate the ADA.

8

     On June 30, 1998, we executed a settlement agreement with the U.S. Department of Justice under Title III of the ADA. Under the settlement agreement, we agreed to complete the readily achievable removal of barriers to accessibility, or alternatives to barrier removal, at two theatres in Des Moines, Iowa and to distribute to all of our theatres a questionnaire designed to assist our management in the identification of existing and potential barriers and a threshold determination of what steps might be available for removal of such existing and potential barriers. We were not required to pay any damages or fines. We continue to assess the impact of such questionnaires on our theatres. We construct new theatres to be accessible to the disabled and believe we are otherwise in substantial compliance with applicable regulations relating to accommodating the needs of the disabled. We have a Director of ADA Compliance to monitor our ADA requirements.

     Our theatre operations are also subject to federal, state and local laws governing such matters as construction, renovation and operation of our theatres as well as wages, working conditions, citizenship, and health and sanitation requirements and licensing. We believe that our theatres are in material compliance with such requirements.

     We own, manage and/or operate theatres and other properties which may be subject to certain U.S. federal, state and local laws and regulations relating to environmental protection, including those governing past or present releases of hazardous substances. Certain of these laws and regulations may impose joint and several liability on certain statutory classes of persons for the costs of investigation or remediation of such contamination, regardless of fault or the legality of original disposal. These persons include the present or former owner or operator of a contaminated property and companies that generated, disposed of or arranged for the disposal of hazardous substances found at the property. Other environmental laws, such as those regulating wetlands, may affect our site development activities, and some environmental laws, such as those regulating the use of fuel tanks, could affect our ongoing operations. Additionally, in the course of maintaining and renovating our theatres and other properties, we periodically encounter asbestos containing materials that must be handled and disposed of in accordance with federal, state and local laws, regulations and ordinances. Such laws may impose liability for release of asbestos containing materials and may entitle third parties to seek recovery from owners or operators of real properties for personal injury associated with asbestos containing materials. We believe that our activities are in material compliance with such requirements.

Employees

     As of December 31, 2003, we had approximately 9,030 employees, of which 38 were covered by collective bargaining agreements and 7,688 were part-time. As of December 31, 2003, approximately 48% of our employees were paid at the federal minimum wage and, accordingly, the minimum wage largely determines our labor costs for those employees. We believe we are more dependent upon minimum wage employees than most other motion picture exhibitors. Although our ability to secure employees at the minimum wage in our smaller markets is advantageous to us because it lowers our labor costs, we are also more likely than other exhibitors to be immediately and adversely affected if the minimum wage is raised.

9

Properties

     As of December 31, 2003, we owned 70 of our theatres and leased 225 of our theatres. We operated an additional four theatres under shared ownership.

     We typically enter into long-term leases that provide for the payment of fixed monthly rentals, contingent rentals based on a percentage of revenue over a specified amount and the payment of property taxes, common area maintenance, insurance and repairs. We, at our option, can renew a substantial portion of our theatre leases at the then fair rental rate for various periods with renewal periods of up to 20 years.

     We own our headquarters building, which has approximately 48,500 square feet, in Columbus, Georgia. Pursuant to the terms of industrial revenue bonds which were issued in connection with the construction of the corporate office, our interest in the building is encumbered by a lien in favor of the Downtown Development Authority of Columbus, Georgia.

Legal Proceedings

     From time to time, we are involved in routine litigation and legal proceedings in the ordinary course of our business, such as personal injury claims, employment matters, contractual disputes and claims alleging ADA violations. Currently, we do not have pending any litigation or proceedings that we believe will have a material adverse effect, either individually or in the aggregate, upon us. In addition, we emerged from bankruptcy under chapter 11 on January 31, 2002. The chapter 11 filing and our subsequent reorganization are discussed under “Our Reorganization.”

Trademarks and Tradenames

     We own or have rights to trademarks or trade names that are used in conjunction with the operations of our theatres. We own Carmike Cinemas® and Hollywood Connection® trademarks. In addition, our logo is our trademark. Coca-Cola® is a registered trademark used in this annual report on Form 10-K and is owned by and belongs to The Coca-Cola Company.

Website Access

     Our website address is www.carmike.com. You may obtain free electronic copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, at our website under the heading “Corporate Information.” These reports are available on our website as soon as reasonably practicable after we electronically file such material, or furnish it to, the Securities and Exchange Commission.

Our Reorganization

     On August 8, 2000, we and our subsidiaries Eastwynn Theatres, Inc., Wooden Nickel Pub, Inc. and Military Services, Inc. filed voluntary petitions for relief under chapter 11 of the

10

bankruptcy code. On January 4, 2002, the United States Bankruptcy Court for the District of Delaware entered an order confirming our Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated as of November 14, 2001. The plan of reorganization became effective on January 31, 2002.

     In our reorganization, substantially all of our unsecured and partially secured liabilities as of August 8, 2000, were subject to compromise or other treatment until the plan of reorganization was confirmed by the bankruptcy court. Generally, actions to enforce or otherwise effect repayment of all pre-chapter 11 liabilities as well as all pending litigation against us were stayed while we continued our business operations as debtors-in-possession.

Background

     Our reorganization resulted from a sequence of events and the unforeseen effect that these events had in the aggregate on us. Weak film performance during the summer of 2000 contributed to our lower revenues for that summer, which were significantly below our internal projections. Like our competitors, we had increased our costs by expending significant funds in building megaplexes and in making improvements to existing theatres in order to attract and accommodate larger audiences. Consequently, the effect of poor summer returns was substantial on our efforts to comply with the financial covenants under our then $200 million revolving credit facility and $75 million term loan credit agreement, which we sometimes refer to as the pre-reorganization bank facilities. On June 30, 2000, we were in technical default of certain financial covenants contained in the pre-reorganization bank facilities and were unable to negotiate amendments with the lenders to resolve these compliance issues, as we had been able to do in the past. On July 28, 2000, the agents under the pre-reorganization bank facilities issued a payment blockage notice to us and the indenture trustee for our 9 3/8% senior subordinated notes due 2009, (the “Original Senior Subordinated Notes”), prohibiting our payment of the semi-annual interest payment in the amount of $9.4 million due to the noteholders on August 1, 2000. Faced with, among other things, significant operating shortfalls, unavailability of credit and problems dealing with our lenders, we voluntarily filed for bankruptcy in order to continue our business.

Operations During Reorganization

     We could not pay pre-petition debts without prior bankruptcy court approval during our bankruptcy case. Immediately after the commencement of our bankruptcy case, we sought and obtained several orders from the bankruptcy court which were intended to stabilize our business and enable us to continue operations as debtors-in-possession. The most significant of these orders:

•		permitted us to operate our consolidated cash management system during our bankruptcy case in substantially the same manner as it was operated prior to the commencement of our bankruptcy case;
•		authorized payment of pre-petition wages, vacation pay and employee benefits and reimbursement of employee business expenses;

11

•		authorized payment of pre-petition sales and use taxes we owed;
•		authorized us to pay up to $2.3 million of pre-petition obligations to critical vendors, common carriers and workers’ compensation insurance, to aid us in maintaining operation of our theatres, and $37.2 million to film distributors as set forth below; and
•		authorized debt service payments for the loan related to Industrial Revenue Bonds issued by the Downtown Development Authority of Columbus, Georgia.

     As debtors-in-possession, we had the right during the reorganization period, subject to bankruptcy court approval and other limitations, to assume or reject executory contracts and unexpired leases on our theatres. In this context, “assumption” means that we agree to perform our obligations and cure all existing defaults under the contract or lease, and “rejection” means that we are relieved from our obligations to perform further under the contract or lease but are subject to a claim for damages for breach of the rejected contract or lease. Any damages resulting from rejection of executory contracts and unexpired leases were treated as general unsecured claims in our reorganization. During the reorganization period, we received approval from the bankruptcy court to reject theatre leases relating to 136 of our theatre locations.

     As of the date of our bankruptcy petition, film distributors held claims against us aggregating approximately $37.2 million. After we commenced our bankruptcy, several distributors elected to cease supplying us with new film product until their claims against us for pre-petition film exhibition fees were paid in full. We negotiated an agreement with each of our principal film distributors to repay their pre-petition claims for film exhibition fees in full in 17 weekly installments. Based on those agreements, the film distributors began to supply us with new film product again. Our payments under the agreements began on September 18, 2000 and were concluded by December 26, 2000.

     In connection with our reorganization, we reached an agreement to restructure our master lease facility, which we refer to as the Original MoviePlex Lease, with MoviePlex Realty Leasing, L.L.C. and entered into the Second Amended and Restated Master Lease, dated as of September 1, 2001. Under our new MoviePlex master lease, we leased six MoviePlex properties for 15 years with an option to extend the term for an additional five years. The Original MoviePlex Lease was terminated and pre-petition defaults under the Original MoviePlex Lease were cured up to a maximum amount of $493,680. The initial first twelve months base rent for the six theatres is an aggregate of $5.4 million per year ($450,000 per month), subject to periodic increases thereafter and certain additional rent obligations such as percentage rent. Percentage rent is an amount equal to 12% of all aggregate revenue we earn in the leased theatres in excess of one-half of ten times our base rent for any lease year.

Our Plan Of Reorganization

     The material features of the plan of reorganization are described below:

•

The plan of reorganization provided for the issuance or reservation for future issuance of up to 10,000,000 shares of common stock in the aggregate (20,000,000 shares of common stock are authorized in our amended and restated certificate of incorporation), and for the

12

		cancellation of all of our then existing Class A and Class B common stock and preferred stock. As of December 31, 2003, we had 9,088,512 shares of a single class of common stock outstanding.
•		The holders of our cancelled Class A and Class B common stock received in the aggregate 22.2% of the shares reserved for issuance under the plan of reorganization.
•		The holders of our cancelled Series A preferred stock received in the aggregate 41.2% of the shares reserved for issuance under the plan of reorganization. These holders are affiliates of Carmike and have board representation.
•		Certain holders of $45.7 million in aggregate principal amount of the cancelled 9 3/8% senior subordinated notes we issued prior to our reorganization received in the aggregate 26.6% of the shares reserved for issuance under the plan of reorganization. These holders are affiliates of Carmike and have board representation.
•		We reserved 1,000,000 shares of our common stock for issuance under a new management incentive plan, which we refer to as the 2002 Stock Plan. Under the 2002 Stock Plan, 780,000 shares were authorized for issuance to Michael W. Patrick pursuant to his new employment agreement as our Chief Executive Officer and 220,000 were authorized for issuance to seven other members of our senior management.
•		Certain banks holding claims in our reorganization received replacement debt and cash in the amount of $35.6 million, representing accrued and unpaid post-petition interest on their prior claims from August 8, 2000 to January 31, 2002. The prior bank claims arose under (1) the Amended and Restated Credit Agreement among the banks party thereto and Wachovia Bank, N.A., as agent, and us, dated as of January 29, 1999, and amended as of March 31, 2000 and (2) the term loan credit agreement among the banks party thereto, Wachovia Bank, N.A., as administrative agent, Goldman Sachs Credit Partners, L.P., as syndication agent, and First Union National Bank, as documentation agent, and us, dated as of February 25, 1999, as amended as of July 13, 1999, and further amended as of March 31, 2000. The replacement debt was approximately $254.5 million and carried interest at the greater of: (a) at our option, (i) a specified base rate plus 3.5% or (ii) an adjusted LIBOR plus 4.5%; and (b) 7.75% per annum.
•		We issued $154.3 million of our former 10 3/8% senior subordinated notes due 2009 in exchange for $154.3 million aggregate principal amount of the claims in our reorganization concerning the 9 3/8% senior subordinated notes.
•		Leases covering 136 of our underperforming theatres were rejected. Lease terminations and settlement agreements are being negotiated for the resolution of lease termination claims, and the restructuring or other disposition of lease obligations.
•		We agreed to pay our general unsecured creditors the amount of their allowed claims in our reorganization, including claims for damages resulting from the rejection of executory contracts and unexpired leases, plus interest on those amounts at an annual rate of 9.4%. At December 31, 2003, the amount of such claims remaining unpaid was $29.5 million, and the aggregate accrued interest on such claims was $3.7 million. Of the $29.5 million in

13

remaining claims, $21.5 million are disputed. As such, our ultimate liability for these claims is uncertain and is subject to bankruptcy court resolution.

     On the effective date of our reorganization, we entered into a $254.5 million term loan credit agreement, which governed the terms of the banks’ replacement debt. On the same date we closed on a revolving credit agreement totaling $50.0 million. We borrowed $20.0 million of the revolving credit agreement in partial repayment of our obligations owing to the banks under the term loan credit agreement, and we repaid all outstanding amounts under the revolving credit agreement.

Risk Factors

The following are risk factors for Carmike.

Our business will be adversely affected if there is a decline in the number of motion pictures available for screening or in the appeal of motion pictures to 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 will vary from period to period based upon the number and popularity of the motion pictures we show in our theatres. A disruption in the production of motion pictures by, or a reduction in the marketing efforts of, the major studios and/or independent producers, a lack of motion pictures, the poor performance of motion pictures in general 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 substantial lease and debt obligations could impair our financial flexibility and our competitive position.

     We now have, and will continue to have, significant debt obligations. Our current long-term debt obligations are as follows:

•		Our new term loan credit agreement provides for borrowings of up to $100.0 million, of which all was outstanding as of February 27, 2004.
•		Our new revolving credit agreement provides for borrowings of up to $50.0 million. There were no amounts outstanding as of February 27, 2004.
•		Our 7.500% senior subordinated notes, issued as of February 4, 2004, total $150.0 million.
•		Amounts owed on our industrial revenue bonds total $0.7 million at December 31, 2003.
•		As of February 27, 2004, we estimate that our general unsecured creditors will receive an aggregate of $21.4 million plus interest at an annual rate of 9.4% in resolution of their allowed claims, with a final maturity date of January 31, 2007. As of February 27, 2004, total accrued interest on these claims was approximately $4 million. Of these claims, $21.4 million are disputed.

14

     We also have, and will continue to have, significant lease obligations. As of December 31, 2003, our total capital and operating lease obligations for leases with terms over one year totaled $641.8 million.

     These obligations could have important consequences for us. For example, they could:

•		limit our ability to obtain necessary financing in the future and make it more difficult for us to satisfy our lease and debt obligations;
•		require us to dedicate a substantial portion of our cash flow to payments on our lease and debt obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements;
•		make us more vulnerable to a downturn in our business and limit our flexibility to plan for, or react to, changes in our business; and
•		place us at a competitive disadvantage compared to competitors that might have stronger balance sheets or better access to capital by, for example, limiting our ability to enter into new markets or renovate our theatres.

     If we are unable to meet our lease and debt obligations, we could be forced to restructure or refinance our obligations, to seek additional equity financing or to sell assets, which we may not be able to do on satisfactory terms or at all. As a result, we could default on those obligations.

We may not generate sufficient cash flow to meet our needs.

     Our ability to service our indebtedness and to fund potential capital expenditures for theatre construction, expansion or renovation will require a significant amount of cash, which depends on many factors beyond our control. Our ability to make scheduled payments of principal, to pay the interest on or to refinance our indebtedness is subject to general industry economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations to meet our needs.

Our business is subject to significant competitive pressures.

     Large multiplex theatres, which we and some of our competitors built, have tended to and are expected to continue to draw audiences away from certain older theatres, including some of our theatres. In addition, demographic changes and competitive pressures can lead to the impairment of a theatre. Over the last several years, we and many of our competitors have closed a significant number of theatres. Our competitors or smaller entrepreneurial developers may purchase or lease these abandoned buildings and reopen them as theatres in competition with us.

     We face varying degrees of competition from other motion picture exhibitors with respect to licensing films, attracting customers, obtaining new theatre sites and acquiring theatre circuits. In those areas where real estate is readily available, there are few barriers preventing competing companies from opening theatres near one of our existing theatres. Competitors have built and are planning to build theatres in certain areas in which we operate. In the past, these

15

developments have resulted and may continue to result in excess capacity in those areas, adversely affecting attendance and pricing at our theatres in those areas. Even where we are the only exhibitor in a film licensing zone (and therefore do not compete for films), we still may experience competition for patrons from theatres in neighboring zones. There have also been a number of consolidations in the film exhibition industry, and the impact of these consolidations could have an adverse effect on our business if greater size would give larger operators an advantage in negotiating licensing terms.

     Our theatres also compete with a number of other motion picture delivery systems including cable television, pay-per-view, video disks and cassettes, satellite and home video systems. New technologies for motion picture delivery (such as video on demand) could also have a material adverse effect on our business and results of operations. While the impact of these alternative types of motion picture delivery systems on the motion picture exhibition industry is difficult to determine precisely, there is a risk that they could adversely affect attendance at motion pictures shown in theatres.

     Theatres also face competition from a variety of other forms of entertainment competing for the public’s leisure time and disposable income, including sporting events, concerts, live theatre and restaurants.

Our revenues vary significantly depending upon the timing of the motion picture releases by distributors.

     Our business is seasonal, with higher revenues generated during the summer months and year-end holiday season. While motion picture distributors have begun to release major motion pictures more evenly throughout the year, the most marketable motion pictures 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. Additionally, the unexpected emergence of a “hit” film may occur in these or other periods. As a result, the timing of motion picture releases affects our results of operations, which may vary significantly from quarter to quarter and year to year.

If we do not comply with the covenants in our credit agreements or otherwise default under them, we may not have the funds necessary to pay all our amounts that could become due.

     On February 4, 2004, we completed an offering of $150 million of 7.500% senior subordinated notes due 2014 to institutional investors and entered into new senior secured credit facilities consisting of a $50 million revolving credit facility and a $100 million five-year term loan. The notes offering and the new credit facilities replaced our post-bankruptcy term loan credit agreement, post-bankruptcy revolving credit agreement and 10 3/8% senior subordinated notes, which had been in place since our reorganization. Under the indenture that governs the 7.500% senior subordinated notes and the agreements relating to the new senior secured credit facilities, we are subject to limitations on our ability to incur additional indebtedness, make capital expenditures and other customary covenants.

We may be unable to fund our additional capital needs.

16

     Our access to capital may be limited because of our current leverage. In addition, because of our bankruptcy, we may have difficulty obtaining financing for new development on terms that we find attractive. Traditional sources of financing new theatres through landlords may be unavailable for a number of years.

     The opening of large multiplexes by our competitors and the opening of newer theatres with stadium seating in certain of our markets have led us to reassess a number of our theatre locations to determine whether to renovate or to dispose of underperforming locations. Further advances in theatre design may also require us to make substantial capital expenditures in the future or to close older theatres that cannot be economically renovated in order to compete with new developments in theatre design.

     We are subject to restrictions imposed by our lenders that limit the amount of our capital expenditures. As a result, we may be unable to make the capital expenditures that we would otherwise believe necessary. In addition, we cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated revenue growth will be realized or that future capital will be available for us to fund our capital expenditure needs.

We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability.

     As of December 31, 2003, after utilizing approximately $25.0 million for 2003, we had approximately $90.4 million of federal and state operating loss carryforwards with which to offset our future taxable income. Section 382 of the Internal Revenue Code of 1986 imposes an annual limitation on the use of a corporation’s net operating loss carryforwards if the corporation undergoes an “ownership change,” which in general terms is a change in beneficial ownership of the company’s stock that exceeds 50 percentage points during a three year testing period.

     The determination of whether we underwent an ownership change for purposes of section 382 as a result of the issuance of common stock pursuant to our plan of reorganization (the “Plan Stock Issuance”) is subject to a number of highly complex legal issues and factual uncertainties. In our federal income tax return for 2002, we reported the Plan Stock Issuance as causing a section 382 ownership change, although the matter is not free from doubt and arguments can be advanced to support the contrary position. Based on our reported tax treatment, we believe that the special exception in section 382(l)(5) available to debtors in bankruptcy applied, so that our net operating loss carryforwards did not become subject to a section 382 limitation as a result of the Plan Stock Issuance. If, however, we underwent a second ownership change within two years following our date of reorganization — that is, by January 31, 2004 — and assuming that the Plan Stock Issuance caused an ownership change, our net operating losses would have become subject to a section 382 limitation of zero and their future use effectively would have been eliminated. While we do not believe that the sale of our common stock in the offering we completed on February 4, 2004 caused a second ownership change, future changes in the direct or indirect beneficial ownership of our common stock, which may be beyond our control, could trigger an ownership change and thus limit, or possibly eliminate altogether, our ability to use these net operating loss carryforwards in a subsequent taxable year.

17

     If it were determined that we did not undergo an ownership change as a result of the Plan Stock Issuance, the issuance of common stock in our recently completed offering would trigger an ownership change, which would cause our net operating loss carryforwards to become subject to an annual limitation on their use equal to the value of our equity immediately prior to the date of the ownership change, subject to certain adjustments, multiplied by the applicable federal long-term tax-exempt interest rate.

Deterioration in our relationships with any of the major film distributors could adversely affect our access to commercially successful films and could adversely affect our business and results of operations.

     Our business depends to a significant degree on maintaining good relationships with the major film distributors that license films to our theatres. A deterioration in our relationships with any of the major film distributors could adversely affect our access to commercially successful films and adversely affect our business and results of operations. We suffered such a deterioration for a period of time while we were in bankruptcy. When we commenced our bankruptcy, several film distributors ceased supplying us with new film product in light of their claims against us for exhibition fees aggregating approximately $37.2 million. Those film distributors recommenced supplying us with new film product upon our agreeing to pay their claims in full, which we did in 17 weekly installments ending on December 26, 2000.

     Because the distribution of motion pictures is in large part regulated by federal and state antitrust laws and has been the subject of numerous antitrust cases, we cannot ensure a supply of motion pictures by entering into long-term arrangements with major distributors. Rather, we must compete for licenses on a film-by-film and theatre-by-theatre basis and are required to negotiate licenses for each film and for each theatre individually.

Our success depends on our ability to retain key personnel.

     We believe that our success is due in part to our experienced management team. We depend in large part on the continued contribution of our senior management and, in particular, Michael W. Patrick, our President and Chief Executive Officer. Losing the services of one or more members of our senior management could adversely affect our business and results of operations. We entered into a five-year employment agreement with Michael W. Patrick as Chief Executive Officer on January 31, 2002, the term of which extends for one year each December 31, provided that neither we nor Mr. Patrick chooses not to extend the agreement. We maintain no key man life insurance policies for any senior officers or managers except for a $1.8 million policy covering Mr. Patrick.

We face uncertainties related to digital cinema.

     If a digital cinema roll-out progresses rapidly, we may not have adequate resources to finance the conversion costs. Digital cinema is in an experimental stage in the motion picture exhibition

18

industry. There are multiple parties competing to be the leading manufacturer of digital cinema technology. However, there are significant obstacles to the acceptance of digital cinema, including quality of image and costs. Electronic projectors will require substantial investment in re-equipping theatres. If the conversion process rapidly accelerates, we may have to raise additional capital to finance the conversion costs associated with it. The additional capital necessary may not, however, be available to us on terms we deem acceptable.

A prolonged economic downturn could materially affect our business by reducing amounts consumers spend on attending movies.

     Our business depends on consumers voluntarily spending discretionary funds on leisure activities. Movie theatre attendance may be affected by prolonged negative trends in the general economy that adversely affect consumer spending. 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.

Compliance with the Americans with Disabilities Act could require us to incur significant capital expenditures and litigation costs in the future.

     The Americans with Disabilities Act of 1990, or the ADA, and certain state statutes and local ordinances, among other things, require that places of public accommodation, including both existing and newly constructed theatres, be accessible to customers with disabilities. The ADA requires that theatres be constructed to permit persons with disabilities full use of a theatre and its facilities. The ADA may also require that certain modifications be made to existing theatres in order to make them accessible to patrons and employees who are disabled. We are subject to a settlement agreement arising from a complaint filed with the U.S. Department of Justice concerning theatres operated by us in Des Moines, Iowa. As a result of the settlement agreement, we removed barriers to accessibility at two Des Moines theatres and distributed to all of our theatre managers a questionnaire designed to assist our central management in identifying existing and potential barriers and determining what steps might be available for removal of such existing and potential barriers.

     We are aware of several lawsuits that have been filed against other motion picture exhibitors by disabled moviegoers alleging that certain stadium seating designs violated the ADA. If we fail to comply with the ADA, remedies could include imposition of injunctive relief, fines, awards for damages to private litigants and additional capital expenditures to remedy non-compliance. Imposition of significant fines, damage awards or capital expenditures to cure non-compliance could adversely affect our business and operating results.

We are subject to other federal, state and local laws which limit the manner in which we may conduct our business.

     Our theatre operations are subject to federal, state and local laws governing matters such as construction, renovation and operation of our theatres as well as wages, working conditions, citizenship and health and sanitation requirements and licensing. While we believe that our theatres are in material compliance with these requirements, we cannot predict the extent to

19

which any future laws or regulations that regulate employment matters will impact our operations. At December 31, 2003, approximately 48% of our employees were paid at the federal minimum wage and, accordingly, the minimum wage largely determines our labor costs for those employees. Increases in the minimum wage will increase our labor costs.

Disruption of our relationship with our primary concession suppliers could harm our margins on concessions.

     We purchase substantially all of our concession supplies, except for beverage supplies, as well as janitorial supplies from Showtime Concession Supply, Inc. and are by far its largest customer. In return for our concession supplies, we pay Showtime Concession at set prices that are based on the type of concession supplied. Our current agreement with Showtime Concession will expire on December 8, 2006. If this relationship were disrupted, we could be forced to negotiate a number of substitute arrangements with alternative vendors which are likely to be, in the aggregate, less favorable to us than the current arrangement.

     We purchase our beverage supplies from The Coca-Cola Company. Our current agreement with The Coca-Cola Company will expire on June 30, 2004. Under the agreement, The Coca-Cola Company may raise beverage supply costs and, in fact, has increased such costs by 3.3% beginning January 31, 2004 through the term of the agreement. If beverage supply costs are increased at a higher rate or we are unable to negotiate favorable terms with The Coca-Cola Company or a competing beverage supplier when the agreement is up for renewal, our margins on concessions may be negatively impacted.

Our development of new theatres poses a number of risks.

     We plan to continue to expand our operations through the development of new theatres and the expansion of existing theatres. Developing new theatres poses a number of risks. Construction of new theatres may result in cost overruns, delays or unanticipated expenses related to zoning or tax laws. Desirable sites for new theatres may be unavailable or expensive, and the markets in which new theatres are located may deteriorate over time. Additionally, the market potential of new theatre sites cannot be precisely determined, and our theatres may face competition in new markets from unexpected sources. Newly constructed theatres may not perform up to our expectations.

     We face significant competition for potential theatre locations and for opportunities to acquire existing theatres and theatre circuits. Because of this competition, we may be unable to add to our theatre circuit on terms we consider acceptable.

If we determine that assets are impaired, we will be required to recognize a charge to earnings.

     The opening of large multiplexes and theatres with stadium seating by us and certain of our competitors has tended to, and is expected to continue to, draw audiences away from certain older theatres, including some of our theatres. In addition, demographic changes and competitive pressures can lead to the impairment of a theatre. Whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be

20

recoverable, we review those assets to be held and used in the business for impairment of long-lived assets and goodwill. We also periodically review and monitor our internal management reports and the competition in our markets for indicators of impairment of individual theatres. If we determine that assets are impaired, we are required to recognize a charge to earnings.

     We had impairment charges in four of the last five fiscal years totaling $187.5 million. Our impairment charge recognized for 2001 was significantly larger than in prior years due to the write-off of leasehold improvements on rejected theatres, the impact of closing owned theatres, the diminished value of our entertainment centers and the write-down of surplus equipment removed from closed theatres. Additionally, in 2001 we included equipment in the theatre valuation calculations based on the reduced capital building program in the future as well as the excess supply of equipment in inventory. We incurred no impairment charge in 2002. For fiscal year 2003, our impairment charge was $1.1 million. Through December 31, 2003, we believe we have properly tested for impairments. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets.

Our bankruptcy reorganization could harm our business, financial condition and results of operations.

     We estimate that our aggregate liability at December 31, 2003 for general unsecured creditors is approximately $29.5 million, which includes our estimated liability for damages resulting from the rejection of executory contracts and unexpired leases which we have not already paid. As of December 31, 2003, total accrued interest on these claims was $3.7 million. Subsequent to December 31, 2003, we paid approximately $7.6 million of these claims, with $0.5 million reduced due to changes in estimates. Certain of these claims remain unsettled and are subject to ongoing negotiation and possible litigation. We estimate the amount of the disputed claims at December 31, 2003 to be $21.5 million; however, the final amounts we pay in satisfaction of the claims will depend on the bankruptcy court’s determination. In addition, new claims could be asserted that could exceed our estimate. The final amounts paid in connection with these claims could materially exceed our current estimates, which could reduce our profitability or cause us to incur losses that would impair our ability to make required principal and interest payments on our indebtedness and affect the trading price of our common stock.

     In addition, our past inability to meet our obligations that resulted in our filing for bankruptcy protection, or the perception that we may not be able to meet our obligations in the future, could adversely affect our ability to obtain adequate financing, to enter into new leases for theatres or to retain or attract high-quality employees. It could also adversely affect our relationships with our suppliers.

Our business makes us vulnerable to future fears of terrorism.

     If future terrorist incidents or threats cause our customers to avoid crowded settings such as theatres, our attendance would be adversely affected.

21

We have significant stockholders with the ability to influence our actions.

     Entities affiliated with Goldman, Sachs & Co. beneficially owned approximately 25% of the shares of our common stock following the recently completed common stock offering. This ownership interest and the Goldman entities’ board representation allows them to have significant input on major corporate decisions. The Goldman entities may exert their influence in a manner that is not consistent with the interests of other stockholders.

Our certificate of incorporation and bylaws contain provisions that make it more difficult to effect a change in control of the company.

     Certain provisions of our certificate of incorporation and bylaws and the Delaware General Corporation Law could have the effect of delaying, deterring or preventing a change in control of the company not approved by the board of directors, even if the change in control were in the stockholders’ interests. Under our certificate of incorporation, our board of directors has the authority to issue up to one million shares of preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. While we have no present intention to issue shares of preferred stock, an issuance of preferred stock in the future could have the effect of making it more difficult for a third party to acquire a majority of the outstanding voting stock of the company. In addition, our bylaws provide that a special meeting of the stockholders of the company may only be called by the Chairman, President or Secretary, at the request in writing of a majority of our board of directors or at the request in writing of stockholders owning at least 66 2/3% of our capital stock then issued and outstanding and entitled to vote.

     Further, we are subject to the anti-takeover provisions of section 203 of the Delaware General Corporation Law, which prohibits us from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. The application of section 203 could have the effect of delaying or preventing a change of control that could be advantageous to the stockholders.

ITEM 2. PROPERTIES.

     As of December 31, 2003, we owned 70 of our theatres and leased 225 of our theatres. We operated an additional four theatres under shared ownership.

     We typically enter into long-term leases that provide for the payment of fixed monthly rentals, contingent rentals based on a percentage of revenue over a specified amount and the payment of property taxes, common area maintenance, insurance and repairs. We, at our option, can renew a substantial portion of our theatre leases at the then fair rental rate for various periods with renewal periods of up to 20 years.

     We own our headquarters building, which has approximately 48,500 square feet, in Columbus, Georgia. Pursuant to the terms of industrial revenue bonds which were issued in

22

connection with the construction of the corporate office, our interest in the building is encumbered by a lien in favor of the Downtown Development Authority of Columbus, Georgia.

ITEM 3. LEGAL PROCEEDINGS.

     From time to time, we are involved in routine litigation and legal proceedings in the ordinary course of our business, such as personal injury claims, employment matters, contractual disputes and claims alleging ADA violations. Currently, we do not have pending any litigation or proceedings that we believe will have a material adverse effect, either individually or in the aggregate, upon our financial position, liquidity or results of operations.

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

     There were no matters submitted to a vote of security holders during the last quarter of the year ended December 31, 2003.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following sets forth certain information as of March 15, 2004 regarding the executive officers of Carmike. For purposes of this section, references to Carmike include Carmike’s predecessor, Martin Theatres, Inc.

     Michael W. Patrick has served as Carmike’s President since October 1981, director since April 1982, Chief Executive Officer since March 1989 and Chairman of the Board of Directors since January 2002. He joined Carmike in 1970 and served in a number of operational and film booking and buying capacities prior to becoming President. Mr. Patrick serves as a director of the Will Rogers Institute, and he is a member of the Board of Trustees of Columbus State University Foundation, Inc.

23

     Fred W. Van Noy joined Carmike in 1975. He served as a District Manager from 1984 to 1985 and as Western Division Manager from 1985 to 1988, when he became Vice President – General Manager. In December 1997, he was elected to the position of Senior Vice President – Operations. In November 2000, he became Senior Vice President – Chief Operating Officer.

     Martin A. Durant joined Carmike in July 1999 as Senior Vice President – Finance, Treasurer and Chief Financial Officer. Prior to joining Carmike, Mr. Durant was Senior Vice President – Corporate Services for AFLAC Incorporated, a Columbus, Georgia based international holding company, for a period of ten years. Prior to his position with AFLAC he was President of a venture capital firm located in Florida. Mr. Durant began his career with KPMG Peat Marwick and is a Certified Public Accountant.

     Anthony J. Rhead joined Carmike in June 1981 as manager of the booking office in Charlotte, North Carolina. In July 1983, Mr. Rhead became Vice President – Film, in December 1997 was elected Senior Vice President – Film and in January 2002 he was elected Senior Vice President – Film and Secretarty. Prior to joining Carmike, he worked as a film booker for Plitt Theatres, Inc. from 1973 to 1981.

     H. Madison Shirley joined Carmike in 1976 as a theatre manager. He served as a District Manager from 1983 to 1987 and as Director of Concessions from 1987 until 1990. He became Vice President – Concessions in 1990 and Senior Vice President – Concessions and Assistant Secretary in December 1997.

     Marilyn B. Grant joined Carmike in 1975 as a bookkeeper. She served as Advertising Coordinator from 1984 to 1985 and became the Director of Advertising in 1985. In August 1990, she was elected to her present position as Vice President – Advertising.

     Philip A. Smitley joined Carmike in April 1997 as Controller. In January 1998, he was elected to his present position of Assistant Vice President and Controller. In March 1999, he assumed the duties of interim Chief Financial Officer pending the appointment of Martin A. Durant in July 1999. Prior to joining Carmike, Mr. Smitley was Divisional Controller – Transportation of Burnham Service Corporation, a trucking company. On March 22, 2002, Mr. Smitley filed a personal voluntary petition for relief under Chapter 7 of the Federal Bankruptcy Code in the United States Bankruptcy Court of the Middle District of Alabama. This petition was discharged on August 2, 2002.

     All of the executive officers were serving as our executive officers or those of our subsidiaries when we filed our voluntary petition for relief under the bankruptcy code.

24

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

     Our common stock is currently traded on the Nasdaq National Market under the symbol “CKEC,” but it has traded on the NASD’s over-the-counter Bulletin Board (the “OTCBB”) and the New York Stock Exchange at different times in the past. From January 31, 2002 until May 22, 2002, our new common stock was traded on the OTCBB under the symbol “CMKC.” Prior to that time, our pre-reorganization Class A common stock traded on the OTCBB under the symbol “CKECQ” from January 17, 2001 until January 30, 2002. The Class A common stock previously traded on the New York Stock Exchange under the symbol “CKE” until trading in our stock on the New York Stock Exchange was suspended prior to trading on January 12, 2001 because we had fallen below certain New York Stock Exchange criteria for continued listing.

     The last reported sale price of the common stock on March 15, 2004 was $36.90 per share. The table below sets forth the high and low closing prices of our new common stock from January 31, 2002 through December 31, 2003:

     As of March 15, 2004, there were approximately 249 record holders of our common stock and there were no shares of any other class of stock issued and outstanding.

     During fiscal year 2003, we did not make any sales of unregistered equity securities.

     We have never declared or paid a dividend on our common stock. However, our board of directors intends to declare a quarterly dividend of $0.175 per share of common stock in the second quarter of 2004. We intend to pay quarterly dividends for the foreseeable future at our board’s discretion, subject to many considerations, including limitations imposed by covenants in the indenture for our 7.500% senior subordinated notes and our new credit facilities, operating results, capital requirements and other factors. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Material Credit Agreement and Covenant Compliance.”

25

ITEM 6. SELECTED FINANCIAL AND OTHER DATA.

     The consolidated selected financial and other data below should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto. The selected financial and other data for each of the four fiscal years in the period ended December 31, 2002 are derived from our consolidated financial statements which have been audited by Ernst & Young LLP, independent auditors. The data presented for the period ended December 31, 2003 is derived from our consolidated financial statements, which have been audited by PricewaterhouseCoopers LLP, independent auditors.

     During the period from August 8, 2000 through January 31, 2002, we operated as a debtor-in-possession under chapter 11 of the bankruptcy code. Our results of operations during the reorganization period were significantly affected by the bankruptcy proceeding and are therefore not comparable in all respects with our results for other periods. In addition, the per share data for all periods prior to 2002 reflect the shares of our previously outstanding classes of common stock, which were cancelled when our reorganization became effective. The results from those periods are not comparable to the year ended December 31, 2003, which are based on a different number of shares of our new class of common stock issued when the reorganization became effective.

26

(1)

See notes 1, 2 and 3 of notes to audited annual consolidated financial statements with respect to our bankruptcy and financial reporting in accordance with Statement of Position 90-7. See note 3 of notes to audited annual consolidated financial statements with respect to reorganization costs incurred while in bankruptcy. See note 11 of notes to audited annual consolidated financial statements for income taxes relative to valuation allowances for deferred income tax debits.

(2)

Gain on sales of property and equipment for the years ended December 31, 1999, 2000, 2001 and 2002 as filed with the SEC, is not included in concessions and other revenues in the foregoing table, but has been separately stated.

(3)

Goodwill amortization of $1.7 million, $1.5 million and $1.5 million is included for the years ended December 31, 1999, 2000 and 2001, respectively.

(4)

See notes 2, 3, and 4 of notes to audited annual consolidated financial statements with respect to impairments of long-lived assets and restructuring charges.

(5)

Loss on extinguishment of debt, gross, has been reclassified from an extraordinary item, net of tax, in our audited annual consolidated financial statements in accordance with SFAS 145.

(6)

Includes current maturities of long-term indebtedness, capital lease obligations and long-term trade payables; excludes long-term trade payables and liabilities subject to compromise.

27

(7)

See the audited annual consolidated financial statements of cash flows for the years ended December 31, 2000, 2001, 2002 and 2003.

(8)

Excludes 28 theatres and 116 screens which we closed as part of our 1998 restructuring plan in 1999. In addition, these amounts exclude theatres which we closed upon approval of the bankruptcy court as follows: 84 theatres and 394 screens through December 31, 2000; an additional 17 theatres and 81 screens through December 31, 2001; and an additional eight theatres and 44 screens through December 31, 2002.

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

     The following discussion of our financial condition and operating results should be read in conjunction with “Item 6. Selected Financial and Other Data” and our consolidated financial statements and accompanying notes.

Results of Operations

Financial Reporting During Reorganization

     In connection with our bankruptcy proceedings, we were required to report in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, (“SOP 90-7”). SOP 90-7 requires, among other things, (i) that pre-petition liabilities that are subject to compromise be segregated in our consolidated balance sheet as liabilities subject to compromise and (ii) the identification of all transactions and events that are directly associated with our reorganization in the consolidated statement of operations.

Seasonality

     Typically, movie studios release films with the highest expected revenues during the summer and the holiday period between Thanksgiving and Christmas, causing seasonal fluctuations in revenues. However, movie studios are increasingly introducing more popular film titles throughout the year.

Revenues

     We derive almost all of our revenues from box office admissions and concession sales. We recognize admissions revenues when movie tickets are sold at the box office, and concession sales revenues when the products are sold in the theatre. Admissions and concession sales revenues depend primarily upon attendance, ticket price and the price and volume of concession sales. Our attendance is affected by the quality and timing of movie releases and our ability to obtain films that appeal to patrons in our markets.

Expenses

     Film exhibition costs vary according to box office admissions and are accrued based on the specified splits of receipts in firm term agreements with movie distributors. The agreements usually provide for a decreasing percentage of box office admissions to be paid to the movie

28

studio over the first few weeks of the movie’s run, subject to a floor for later weeks. Where firm terms do not apply, film exhibition costs are accrued based on estimates of the final settlement that is agreed between us and the movie studio after the completion of the movie’s run.

     Concession cost of sales are incurred as products are sold. We purchase substantially all of our beverage supplies from The Coca-Cola Company. We purchase substantially all of our other concession supplies from a single vendor of which we are the principal customer.

     Other theatre operating costs include labor, utilities and occupancy, and facility lease expenses. Labor costs have both a variable and fixed cost component. During non-peak periods, a minimum number of staff is required to operate a theatre facility. However, to handle attendance volume increases, theatre staffing and thus salaries and wages vary in relation to revenues. Utilities, repairs and maintenance services also have variable and fixed costs components. Our occupancy expenses and property taxes are primarily fixed costs, as we are generally required to pay applicable taxes, insurance and fixed minimum rent.

     Our general and administrative expenses include costs not specific to theatre operations, and are composed primarily of corporate overhead.

Net Operating Losses

     As of December 31, 2003, after utilizing approximately $25.0 million for 2003, we had approximately $90.4 million of federal and state operating loss carryforwards with which to offset our future taxable income. Net operating losses may be carried back and then forward for specified periods. If they are not used to offset taxable income by the end of the carryforward period, they expire. Under section 382 of the Internal Revenue Code of 1986, as amended, a corporation may generally be restricted in utilizing its net operating losses to offset prospective taxable income if it experiences an “ownership change,” as defined in section 382(g). The determination as to whether a corporation has experienced an ownership change on a given date is a complex analysis of the beneficial stock ownership of the corporation over a time period of not more than three years. An ownership change under section 382(g) occurs when on a testing date, the beneficial ownership of the corporation by one or more “5-percent stockholders” has increased, in the aggregate, by more than 50 percentage points over the respective lowest ownership percentages of such 5-percent stockholders during the testing period preceding such date. It should be noted that the rules for determining whether an ownership change under section 382 has occurred are different from those applied to evaluate whether a “change in ownership” as defined by Statement of Position 90-7 has occurred.

     The determination of whether we underwent an ownership change for purposes of section 382 as a result of the issuance of common stock pursuant to our plan of reorganization (the “Plan Stock Issuance”) is subject to a number of highly complex legal issues and factual uncertainties. In our federal income tax return for 2002, we reported the Plan Stock Issuance as causing a section 382 ownership change, although the matter is not free from doubt and arguments can be advanced to support the contrary position. Based on our reported tax treatment, we believe that the special exception in section 382(I)(5) available to debtors in bankruptcy applied, so that our net operating loss carryforwards did not become subject to a section 382 limitation as a result of

29

the Plan Stock Issuance. If, however, we underwent a second ownership change within two years following our date of reorganization — that is, by January 31, 2004 - and assuming that the Plan Stock Issuance caused an ownership change, our net operating losses would have become subject to a section 382 limitation of zero and their future use effectively would have been eliminated. While we do not believe that the sale of our common stock in the offering we completed on February 4, 2004 caused a second ownership change, future changes in the direct or indirect beneficial ownership of our common stock, which may be beyond our control, could trigger an ownership change and thus limit, or possibly eliminate altogether, our ability to use these net operating loss carryforwards in a subsequent taxable year.

     If it were determined that we did not undergo an ownership change as a result of the Plan Stock Issuance, the recently completed issuance of common stock from our equity offering could be deemed to have triggered an ownership change, which would cause our net operating loss carryforwards to become subject to an annual limitation on their use equal to the value of our equity immediately prior to the date of the ownership change, subject to certain adjustments, multiplied by the applicable federal long-term tax-exempt interest rate.

Operating Statement Information

     The following table sets forth for the periods indicated the percentage of total revenues represented by certain items reflected in our consolidated statements of operations:

30

(1)

Film exhibition costs include advertising expenses net of co-op reimbursements.

(2)

Concession costs of $20.2 million, $19.2 million and $18.0 million for the years 2001, 2002 and 2003, respectively, and concession revenue of $135.8 million, $151.8 million and $147.2 million for the years 2001, 2002 and 2003, respectively.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2003

     Revenues. Total revenues decreased 2.6% from $506.5 million for the year ended December 31, 2002 to $493.1 million for the year ended December 31, 2003 as a result of decreased attendance driving down admissions and concessions revenues, partially offset by increased ticket prices. Admissions decreased 3.1% from $342.8 million in 2002 to $332.1 million in 2003 due to a 4.0% decrease in overall attendance and a 0.6% increase in average ticket price. Concessions and other revenue decreased 1.5% from $163.7 million in 2002 to $161.0 million in 2003 due to (1) the attendance decrease, (2) a 0.9% increase in concession sales per patron and (3) a $2.1 million increase in other revenues. Other revenues consist of game machine revenue, screen advertising, family entertainment center revenue and other miscellaneous items.

     For the year ended December 31, 2002, our attendance per average screen was 30,784, our average admission price was $4.90, and our average concession sale per patron was $2.17. For the year ended December 31, 2003, our attendance per average screen was 29,835, our average admission price was $4.93, and our average concession sale per patron was $2.19. As a result of the decrease in attendance, our revenues per average screen decreased 1.7% from $222,735 to $218,956.

     We operated 308 theatres with 2,262 screens at December 31, 2002 and 299 theatres with 2,253 screens at December 31, 2003.

     Cost of operations. Total theatre operating costs, including film exhibition costs, concession costs and other theatre operating costs, decreased 2.9% from $391.3 million to $380.1 million. As a percentage of total revenues, cost of operations decreased from 77.3% to 77.1%. This was the result of improvement in concession cost of sales and improved operating leverage driven primarily by cost control measures and by an increase in other revenues of approximately $2.1 million over 2002. Film exhibition costs decreased 4.7% from $189.3 to $180.4 due to a decrease in admission sales offset by improved film rental arrangements.

     General and administrative expenses. General and administrative expenses increased 2.0% from $15.0 million to $15.3 million. This increase resulted primarily from an increase in non-cash deferred compensation charges from $3.6 million to $6.0 million, offset by cost control measures. As a percentage of total revenues, general and administrative costs increased from 3.0% to 3.1%.

     Depreciation and amortization expenses. Depreciation and amortization expenses decreased 1.2% from $32.1 million to $31.7 million as a result of our having fewer screens in operation. The impairment charge of $132.2 million in 2001 resulted in depreciation and amortization expenses for 2002 being approximately $13.6 million lower than they otherwise would have been.

31

     Gain on sales of property and equipment. Gains on sales of property and equipment increased from $0.7 million in 2002 to $3.0 million in 2003 due to the sale of 12 theatres and four parcels of land in 2003.

     Impairment Charge. The company recognized a non-cash impairment charge on long-lived assets in 2003 of $1.1 million due to changes in fundamental conditions in three of our markets, which were effected by competition. There was no comparable charge in 2002.

     Interest expense. Total interest for the year 2003 decreased from $102.8 million to $39.8 million. At emergence from chapter 11 on January 31, 2002, all past interest was required to be recognized. Excluding bankruptcy related items, interest for 2002 would have been approximately $47.5 million. The reduction in interest expense relates to scheduled amortization as well as mandatory prepayments as defined in our credit agreements.

     Income tax expense (benefit). During the quarter ended December 31, 2003, we determined the available positive evidence carried more weight than the historical negative evidence and concluded it was more likely than not that the net deferred tax assets would be realized in future periods. Therefore, the $79.9 million valuation allowance was released creating an income tax benefit for 2003. The positive evidence management considered included operating income for 2002 and 2003, our subsequent stock offering and refinancing, resulting in significant prospective interest expense reduction, and anticipated operating income and cash flows for future periods in sufficient amounts to realize the net deferred tax assets. We recognized an income tax benefit of $75.3 million in 2003. Additionally, we will pay approximately $500 thousand in alternative minimum taxes for the year ended December 31, 2003. The income tax benefit recorded in 2002 is the result of the Job Creation and Worker Assistance Act of 2002, which allowed for additional carryback of net operating losses resulting in a cash refund of approximately $14.7 million. As is customary, the Internal Revenue Service reviews refunds of this size. This review was completed on November 25, 2003 with no adjustments made by the Internal Revenue Service. The new provision also temporarily suspends the 90% limitation found in Internal Revenue Code Section 56(d)(1) on the use of net operating loss carrybacks arising in tax years ending in 2001 and 2002 for alternative minimum tax purposes.

     Reorganization costs. We incurred reorganization costs of $20.5 million in 2002, including $8.0 million of professional fees and $8.9 million in non-cash transactions related to the extinguishment of pre-bankruptcy debt and other items totaling $3.6 million. Reorganization costs for 2003 consisted of a credit of $4.8 million as a result of changes in estimates on liabilities subject to compromise, partially offset by $0.7 million of professional and other expenses.

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

     Revenues. Total revenues increased 11.0% from $457.0 million for the year ended December 31, 2001 to $506.5 million for the year ended December 31, 2002 as a result of increased attendance driving up admissions and concessions revenues, partially offset by the reduced number of screens. Admissions increased 9.9% from $311.8 million in 2001 to $342.8 million in 2002 due to an 8.3% increase in overall attendance and a 1.5% increase in average ticket price.

32

Concessions and other revenue increased 13.2% from $145.1 million in 2001 to $164.3 million in 2002 due to (1) the attendance increase, (2) a 3.2% increase in concession sales per patron and (3) a $3.3 million increase in other revenues.

     For the year ended December 31, 2001, our attendance per average screen was 27,083, our average admission price was $4.83 and our average concession sale per patron was $2.10. For the year ended December 31, 2002, our attendance per average screen was 30,781, our average admission price was $4.90, and our average concession sale per patron was $2.17. As a result of these increases, our revenues per average screen increased 16.5% from $191,513 to $223,038.

     We operated 323 theatres with 2,333 screens at December 31, 2001 and 308 theatres with 2,262 screens at December 31, 2002.

     Cost of operations. Total theatre operating costs, including film exhibition costs, concession costs and other theatre operating costs, increased 4.8% from $373.4 million to $391.3 million. As a percentage of total revenues, cost of operations decreased from 81.7% to 77.2%. This was the result of improvement in concession cost of sales and improved operating leverage driven primarily by higher attendance and by an increase in other revenues of approximately $3.3 million over 2001. Film exhibition costs increased 10.6% from $171.2 million to $189.3 million due to an increase in admission sales.

     General and administrative expenses. General and administrative expenses increased 70.5% from $8.8 million to $15.0 million. This increase resulted primarily from non-cash deferred compensation charges of $3.6 million as described in Notes 1 and 12 of the notes to annual audited consolidated financial statements and the write-off of $552,000 of professional fees relating to our proposed equity offering that was suspended due to the decline in general market conditions. As a percentage of total revenues, general and administrative costs increased from 1.9% to 3.0%.

     Depreciation and amortization expenses. Depreciation and amortization expenses decreased 23.9% from $42.2 million to $32.1 million as a result of our having fewer screens in operation. Impairment charges of $21.2 million in 2000 resulted in depreciation and amortization expenses for 2001 being approximately $1.2 million lower than they otherwise would have been. The impairment charge of $132.2 million in 2001 resulted in depreciation and amortization expenses for 2002 being approximately $13.6 million lower than they otherwise would have been. Additionally, the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, halted the amortization of goodwill, which was approximately $1.5 million in 2001.

     Interest expense. Total interest for the year 2002 increased to $102.8 million from $6.1 million in 2001. For the year ended 2002, interest expense included $55.3 million of contractual interest related to prior periods which was not recorded until approval of the reorganization plan in accordance with SOP 90-7.

33

     Income tax expense. We recognized no income tax expense or benefit in 2001. The income tax benefit recorded in 2002 is the result of the Job Creation and Worker Assistance Act of 2002, which allowed for additional carryback of net operating losses resulting in a cash refund of approximately $14.7 million. As is customary, the Internal Revenue Service reviews refunds of this size. This review was completed on November 25, 2003 with no adjustments made by the Internal Revenue Service

     Reorganization costs. We incurred reorganization costs of $19.5 million during 2001, including $8.2 million of professional fees and $16.4 million of asset impairments directly related to actions taken under the reorganization including, among other things, lease rejections. These costs have been offset by $3.1 million of interest income and gains on asset sales and $2.0 million in other expenses subsequent to the date we filed for bankruptcy under chapter 11. We also incurred reorganization costs of $20.5 million in 2002, including $8.0 million for professional fees and $8.9 million in non-cash transactions related to the extinguishment of pre-bankruptcy debt, as well as other items totaling $3.6 million.

Liquidity and Capital Resources

Recent Developments

     On February 4, 2004 we completed a public offering of 4,850,000 shares of our common stock (3,000,000 of which were issued and sold by us and 1,850,000 of which were sold by selling stockholders; an additional 675,000 shares were sold by certain selling stockholders on February 11, 2004 pursuant to an underwriters’ over-allotment option), priced at $32.00 per share. Net proceeds to us, after discounts and estimated expenses, were $89.2 million. In addition, we also completed a private offering of 7.500% senior subordinated notes due 2014 to institutional investors for net proceeds, after discounts and estimated expenses, of $143.9 million and new senior secured credit facilities consisting of a $50 million revolving credit facility and a $100 million five-year term loan.

     We used the proceeds from the common stock offering, the new senior subordinated notes and the new term loan credit facility, as well as existing cash, to repay the outstanding balance under the post-bankruptcy term loan credit agreement, tender for or redeem our existing 10 3/8% senior subordinated notes, repay a portion of our long-term trade payables and pay related transaction fees and expenses. See “Material Credit Agreements and Covenant Compliance” below for further discussion of our debt.

34

     Below is an adjusted presentation of selected balance sheet items had these transactions occurred as of December 31, 2003.

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 $38.1 million as of December 31, 2002 compared to a working capital deficit of $17.7 million at December 31, 2003. The change in working capital as of December 31, 2003 reflects a reduction in cash related to payments made to long-term debt under our reorganization plan and a reclassification of recoverable construction allowances from current to long-term, offset by the effect of Financial Accounting Standard No. 6 “Classification of Short-Term Obligations Expected to be Refinanced.”

     We had a working capital deficit of $54.7 million at December 31, 2001 compared to a working capital deficit of $38.1 million as of December 31, 2002. The working capital deficit as of December 31, 2002 reflects cash settlements required at emergence from chapter 11, as well as, mandatory payments defined in the plan of reorganization. The deficit was funded through anticipated operating cash flows as well as the ability to draw from our new revolving credit agreement. At February 4, 2004, we had available borrowing capacity of $50 million under our new revolving credit agreement. As of December 31, 2003 we had approximately $41.2 million in cash and cash equivalents on hand.

     We amended our post-bankruptcy term loan credit agreement and our post-bankruptcy revolving credit agreement in October of 2003. Pursuant to our amended post-bankruptcy credit agreements, our capital expenditures were limited to $25 million in each of 2004, 2005 and 2006; provided, however, that unused capital expenditures for a given year would have been applied to increase the capital expenditure limit for the following year. For the year ended December 31, 2003, we made capital expenditures of approximately $18.8 million. As discussed below under “Material Credit Agreements and Covenant Compliance” we refinanced our post-bankruptcy credit facilities subsequent to December 31, 2003. Our new revolving credit agreement limits our annual capital expenditures to $35 million per year, plus any unused portion

35

may be carried over to the succeeding year. We anticipate using the maximum amount allowed for the foreseeable future.

     Net cash provided by operating activities was $15.6 million for the year ended December 31, 2002 compared to net cash provided by operating activities of $51.8 million for the year ended December 31, 2003. This change is due to increased profit from operations related primarily to lower interest expenses, offset by changes in accounts payable, payments to general unsecured creditors and other reorganization items. Net cash used in investing activities was $14.5 million for the year ended December 31, 2002 compared to net cash used in investing activities of $12.1 million for the year ended December 31, 2003. For the year ended December 31, 2002 net cash used in financing activities was $41.7 million compared to $51.9 million for the year ended December 31, 2003.

     Net cash provided by operating activities was $49.4 million for the twelve months ended December 31, 2001, compared to net cash provided by operating activities of $15.6 million for the twelve months ended December 31, 2002. The decrease in cash flow from operating activities was primarily due to cash requirements, primarily interest, payable at emergence from bankruptcy and changes in certain operating assets and liabilities. Net cash used in investing activities was $1.0 million for the year ended December 31, 2001 as compared to $14.5 million in 2002. This increase in cash used in investing activities was primarily due to emergence from chapter 11, which allowed us to increase capital spending. For the year ended December 31, 2001 cash used in financing activities was $6.8 million compared to $41.7 million in 2002. The increase in cash used in financing activities was primarily due to scheduled and mandatory payment requirements of our long-term debt agreements.

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

     Our ability to service our indebtedness will require a significant amount of cash. Our ability to generate this cash will depend largely on future operations. Based upon our current level of operations, we believe that cash flow from operations, available cash, sales of surplus assets and borrowings under our new credit agreements will be adequate to meet our liquidity needs for the next twelve months. However, the possibility exists that, if our liquidity needs are not met and we are unable to service our indebtedness, we could come into technical default under any of our debt instruments, causing the agents or trustees for those instruments to declare all payments due immediately or, in the case of the senior debt, to issue a payment blockage to the more junior debt. A similar situation contributed to the circumstances that led us to file our voluntary petition for relief under chapter 11 in August 2000, as described in “Our Reorganization.”

     We cannot make assurances that our business will continue to generate significant cash flow to fund our liquidity needs. We are dependent to a large degree on the public’s acceptance of the films released by the studios. We are also subject to a high degree of competition and low

36

barriers of entry into our industry. In the future, we may need to refinance all or a portion of our indebtedness on or before maturity. We cannot make assurances that we will be able to refinance any of our indebtedness or raise additional capital through other means, on commercially reasonable terms or at all. 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 technical 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.

Material Credit Agreements and Covenant Compliance

     As described below, our credit and leasing facilities contain certain restrictive provisions which, among other things, limit additional indebtedness, limit capital expenditures, limit the payment of dividends and other defined restricted payments, require that certain debt to capitalization ratios be maintained and require minimum levels of defined cash flows. Upon our emergence from bankruptcy our indebtedness consisted of (1) a term loan credit agreement, the post-bankruptcy term loan credit agreement; (2) a revolving credit agreement, the post-bankruptcy revolving credit agreement; and (3) 10 3/8% senior subordinated notes. In a series of transactions completed on February 4, 2004, we replaced the post bankruptcy term loan credit agreement, the post-bankruptcy revolving credit agreement and the 10 3/8% senior subordinated notes with the indebtedness described below.

New Financing Transactions

     On February 4, 2004, we completed an offering of $150 million of 7.500% senior subordinated notes due 2014 to institutional investors and entered into new senior secured credit facilities consisting of a $50 million revolving credit facility and a $100 million five-year term loan. We used the proceeds from the new senior subordinated notes, the new credit facilities and excess cash to refinance our post-bankruptcy term loan, tender for or redeem our 10 3/8% senior subordinated notes, repaid a portion of our long-term trade payables and paid related transaction fees and expenses. Under the indenture that governs the notes and the agreements related to the new senior secured credit facilities, we will continue to be subject to customary covenants. However, these covenants do not currently prohibit us from paying dividends. A description of the new credit facilities and the new notes is provided below.

New Revolving Credit Facility

     On February 4, 2004, we entered into a new revolving credit facility with Goldman Sachs Credit Partners L.P. as sole lead arranger, sole book runner and sole syndication agent and Wells Fargo Foothill, Inc. as administrative agent and collateral agent. The revolving credit facility provides for borrowings of up to $50.0 million. The interest rate for borrowings under the new revolving credit facility is set from time to time at our option (subject to certain conditions set forth in the new revolving credit facility) at either: (1) a specified base rate plus 2.25% or (2) LIBOR plus 3.25% per annum. The final maturity date of the facility is August 4, 2008.

37

     The new revolving credit facility contains covenants which, among other things, restrict our ability, and that of our restricted subsidiaries, to:

	•		pay dividends or make any other restricted payments;
	•		create liens on our assets;
	•		make certain investments;
	•		consolidate, merge or otherwise transfer all or any substantial part of our assets;
	•		enter into transactions with our affiliates; and
	•		engage in any sale-leaseback, synthetic lease or similar transaction involving any of our assets.

     Our new revolving credit facility generally prohibits us from incurring any additional indebtedness or materially amending the terms of any agreement relating to existing indebtedness without lender approval. In addition, our new revolving credit facility places certain restrictions on our ability to make capital expenditures. The new revolving credit facility also contains financial covenants that require us to maintain specified ratios of funded debt to adjusted EBITDA and adjusted EBITDA to interest expense. The terms governing each of these ratios are defined in the new revolving credit facility.

     Our failure to comply with any of these covenants, including compliance with the financial ratios, is an event of default under the new revolving credit facility, in which case, the agent may, and if requested by the lenders holding a certain minimum percentage of the commitments shall, terminate the new revolving credit facility with respect to additional advances and may declare all or any portion of the obligations due and payable. As of the date we entered into this facility, we believe we were in compliance with all our financial covenants. Other events of default under the new revolving credit facility include:

	•		our failure to pay principal or interest on the loans when due and payable, or our failure to pay certain expenses;
	•		the occurrence of a change of control, as defined in the agreement; or
	•		a breach or default by us or our subsidiaries under, or the termination of, the indenture relating to the notes.

     Borrowings under the new revolving credit facility are secured by first priority security interests in substantially all of our tangible and intangible assets, including the capital stock of our subsidiaries. All of our subsidiaries guaranteed our obligations under the new revolving credit facility.

38

New Term Loan Facility

     On February 4, 2004, we entered into a new term loan facility with Goldman Sachs Credit Partners L.P. as sole lead arranger, sole book runner and sole syndication agent and National City Bank as administrative agent and collateral agent. The new term loan facility provides for borrowings of $100.0 million, which were drawn on the closing of the facility. The interest rate for the borrowings under the new term loan facility is equal to, at our option, (1) a specified base rate plus 2.25% or (2) LIBOR plus 3.25%. The final maturity date of the loan is February 4, 2009.

     The new term loan facility contains certain negative covenants which among other things, restrict our ability to:

	•		incur additional debt;
	•		pay dividends or distributions on, or redeem or repurchase, our capital stock;
	•		make investments;
	•		engage in transactions with affiliates;
	•		create liens on assets;
	•		transfer or sell assets;
	•		guarantee debt;
	•		restrict dividend payments to us; and
	•		consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

     The lenders under the new term loan facility have a second priority security interest in substantially all our tangible and intangible assets, including the capital stock of our subsidiaries. All of the security interests and liens that secure the new term loan facility are junior and subordinate to the liens and security interests of the collateral agent under the new revolving facility. Our subsidiaries guaranteed our obligations under the new term loan facility.

     We may voluntarily pre-pay the term loan, in whole or in part, at (1) 103.0% of the amount repaid if such repayment occurs on or prior to the first anniversary of the closing of the new term loan facility; (2) 102.0% of the amount repaid if such repayment occurs after the first anniversary but before the second anniversary; (3) 101.0% of the amount repaid if such repayment occurs after the second anniversary but before the third anniversary and (4) 100% of the amount repaid if such repayment occurs after the third anniversary.

39

New Senior Subordinated Notes

     On February 4, 2004, we completed an offering of $150 million in aggregate principal amount of 7.500% senior subordinated notes due February 15, 2014 to institutional investors.

     The indenture contains covenants, which, among other things, restrict our ability to:

	•		make restricted payments;
	•		consolidate, merge or otherwise transfer all or substantially all of our assets;
	•		incur additional indebtedness;
	•		issue certain types of stock; and
	•		enter into transactions with affiliates.

     In addition, under the terms of the indenture governing the new notes, we are prohibited from incurring any subordinated debt that is senior in any respect in right of payment to the new notes. We intend to register the notes with the Securities and Exchange Commission in 2004.

     Upon a change of control, as defined in the indenture, subject to certain exceptions, we are required to offer to repurchase from each holder all or any part of each holder’s notes at a purchase price of 101% of the aggregate principal amount thereof plus accrued and unpaid interest to the date of purchase.

     The indenture contains customary events of default for agreements of that type, including payment defaults, covenant defaults and bankruptcy defaults. If any event of default under the new indenture occurs and is continuing, then the trustee or the holders of at least 25% in principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.

     Our subsidiaries have guaranteed the notes that are junior and subordinated to the subsidiary guarantees of our senior debt on the same basis as the notes are junior and subordinated to the senior debt. Interest at 7.500% per annum from the issue date to maturity is payable on the notes each February 15 and August 15. The notes are redeemable at our option under certain conditions.

Contractual Obligations

     As of February 4, 2004, we refinanced our long-term debt obligations. Had this occurred as of December 31, 2003, our long-term debt obligations, obligations to general unsecured creditors pursuant to the plan of reorganization and future minimum payments under capital leases and operating leases with terms over one year and the agreement with our chief executive officer (except as indicated) would have been as follows:

40

(1)		The term loan has a maturity date of February 4, 2009.
(2)		The revolving credit agreement has a maturity date of August 4, 2008. This presentation assumes the full $50 million commitment is outstanding and payable.
(3)		The maturity date for the 7.500% senior subordinated notes is February 15, 2014.
(4)		Our general unsecured creditors are due semi-annual payments of $2.5 million plus interest with a maturity of January 31, 2007.
(5)		The employment agreement with our Chief Executive Officer provides for compensation of $850,000 per year for five years commencing January 31, 2002. The above table does not include bonus payments of up to 50% of his base salary if certain performance goals are achieved.
(6)		Had we not refinanced our long-term debt obligations, our total contractual obligations would have been as follows:

Off-Balance Sheet Arrangements

     As of December 31, 2003, we did not have any off-balance sheet financing transactions or arrangements other than disclosed in the table above.

MoviePlex Lease

     To secure our master lease in 2002, we granted MoviePlex an express contract lien, in addition to MoviePlex’s statutory lien as landlord, on and a security interest in all equipment, inventory, fixtures and other personal property which is located on the leased premises or used in connection therewith and upon all proceeds thereof.

     A default under the new master lease includes our failure to pay rent or perform under certain conditions, our being adjudged bankrupt or the judicial seizure of our assets, or the occurrence of a change of control of Carmike. Under the new master lease, a change of control is any event, transaction or occurrence as a result of which (1) our stockholders cease to own and control all of the economic and voting rights associated with ownership of at least 30% of our outstanding capital stock of all classes on a fully diluted basis, or (2) we cease to own and control all of the economic and voting rights associated with all of the outstanding capital stock of any of our subsidiaries (except that a particular qualified buyer transaction is not a change of control under the new master lease).

41

     The new master lease has been collaterally assigned to Wachovia Bank, National Association, in its capacity as agent under the reimbursement agreement dated as of November 20, 1997, as amended, among MoviePlex, certain lenders and Wachovia Bank, as agent, pursuant to a mortgage and an assignment of rents as to each of six properties, to secure MoviePlex’s obligations to such lenders under the reimbursement agreement. At the end of the new master lease term, or if the lease is terminated by reason of our default, the furniture, fixtures and equipment located in the theatres will become the property of the lenders. In addition, the lenders have released their liens on the other assets that secured the MoviePlex obligations.

Asset Impairments

     In 2001 and 2003, we identified impairments of asset values for certain theatres and a joint venture investment in three movie theatre-entertainment complexes which we reflected as operating expenses in our consolidated financial statements. Based on our analysis, no such charges were required in 2002. The table below sets out certain information concerning these impairments:

     The impairment charge in 2003 was primarily caused by reductions in estimated theatre cash flows due to the impact of new or increased competition on certain older, auditorium-style theatres, negative evaluation of the operating results produced from theatres previously converted to discount theatres, or our inability to improve a marginal theatre’s operating results to a level that would support the carrying value of the long-lived assets.

     The impairment charge recognized in 2001 was significantly larger than in prior years due to the write-off of leasehold improvements on theatres for which we rejected leases, the impact of closing owned theatres, the diminished value of our entertainment centers and the write-down of surplus equipment removed from closed or rejected theatres. Additionally, in 2001 we included impairment charges related to equipment of $34.1 million, based on our reduced capital building program for the future as well as the excess supply of equipment in inventory.

     We had approximately $23.4 million of goodwill recorded at December 31, 2003 and 2002. The goodwill values arose from our acquisitions during the period from 1982 through 1997. The Company considers all of its consolidated operations as a reporting unit for SFAS No. 142. See note 4 of notes to audited annual consolidated financial statements.

42

Critical Accounting Policies

     The preparation of our financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. On an on-going basis, we evaluate our estimates and judgments, including those related to leasing transactions, depreciation of property and equipment, income taxes, litigation and other contingencies and, in particular, those related to impairment of long-lived assets including goodwill. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions and such difference could be material. All critical accounting estimates have been discussed with our audit committee.

     We believe the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States.

Property and Equipment

     Property and equipment are carried at cost, net of accumulated depreciation, or cost adjusted for recognized impairments. Assets held for disposal are reported at the lower of the asset’s carrying amount or its fair value less costs to sell. Amortization of assets recorded under capital leases is included with depreciation expense in the accompanying consolidated statements of operations. Although we use accelerated methods of depreciation for income tax purposes, for financial reporting purposes, we compute depreciation on a straight-line basis as follows:

Impairment of Property and Equipment, Including Goodwill

     Effective January 1, 2002, we adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”). In general, SFAS No. 142 requires that we assess the fair value of the net assets underlying our acquisition related goodwill on a business by business basis. We consider all of our consolidated operations to be our reporting unit for SFAS No. 142 purposes. We evaluate goodwill impairment by comparing discounted cash flows against carrying values. Where that fair value is less than the related carrying value, we have reduced the amount of the goodwill. These reductions were made retroactive to January 1, 2002. SFAS No. 142 also requires that we discontinue the amortization of our acquisition related goodwill. As of December 31, 2003, our financial statements included acquisition related goodwill of $23.4 million, net of previous amortization.

43

     We account for our property and equipment in accordance with the Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”). We review our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We periodically review and monitor our internal management reports and the competition in our markets for indicators of impairment. We consider a trend of operating results that are not in line with management’s expectations to be the primary indicator of potential impairment. An additional impairment indicator used by management is the existence of competition in a market, either from third parties or from our own expansion. For purposes of SFAS No. 144, assets are evaluated for impairment at the theatre level except when multiple theatres are located in the same geographic area. Management believes this is the lowest level for which there are identifiable cash flows. We deem there to be an impairment if a forecast of undiscounted future operating cash flows directly related to the theatre or market, including estimated disposal value if any, is less than its carrying amount. If there is a determination of an impairment, the loss is measured as the amount by which the carrying amount of the theatre or market exceeds its fair value. Fair value is based on management’s estimates which are based on using the best information available, including prices for similar theatres or the results of valuation techniques such as discounting estimated future cash flows. Considerable judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

     See “Asset Impairments” above for additional information regarding the effects on the 2003 and 2001 consolidated financial statements.

Bankruptcy Matters

     As debtors-in-possession, we had the right, subject to bankruptcy court approval and certain other limitations, to assume or reject executory contracts and unexpired leases during our reorganization. Any damages resulting from rejection of executory contracts or unexpired leases were treated as general unsecured claims in our reorganization. During our reorganization, we received approval from the bankruptcy court to reject theatre leases on 136 of our theatre locations. We estimate that our aggregate liability at December 31, 2003 for general unsecured creditors is approximately $29.5 million, which includes our estimated liability for damages resulting from the rejection of executory contracts and unexpired leases which we have not already paid. As of December 31, 2003, total accrued interest on those claims was $3.7 million. Of these claims, $21.5 million are disputed. As such, we cannot presently determine with certainty the ultimate liability that may result; however, the bankruptcy court still maintains jurisdiction over certain matters related to the implementation of the plan of reorganization, including the unresolved disputed claims. We have made our best estimate of such liability given the facts available at this time. If we are unable to resolve these claims with the unsecured creditors we may petition the bankruptcy court to resolve them.

Leases

     We operate most of our theatres under non-cancelable operating lease agreements. These leases generally provide for the payment of fixed monthly rentals, property taxes, common area

44

maintenance, insurance and repairs. Certain of these leases provide for escalating lease payments over the terms of the leases. Moreover, certain leases also include contingent rental fees based on a percentage of sales. At our option, we can renew a substantial portion of our theatre leases, at the then fair rental rate, for various periods with the maximum renewal period generally totaling 10-20 years. For financial statement purposes, the total amount of base rentals over the terms of the leases is charged to expense on the straight-line method over the initial lease terms. Rental expense in excess of lease payments is recorded as a deferred rental liability and is amortized to rental expense over the remaining term of the lease.

Percentage Rent

     Several leases have a contingent component called percentage rent. Percentage rent is based on a percentage of defined revenue factors over a fixed breakpoint for the lease year as described within the lease. We accrue for this contingent liability monthly based on the trailing twelve months activity of the affected theatre. Payment of this liability is defined within the lease and the accrual is reconciled at the end of the lease year.

Income Taxes

     We use the liability method of accounting for income taxes, which requires recognition of temporary differences between financial statement and income tax basis of assets and liabilities, measured by enacted tax rates.

     In 2000 we established a valuation allowance in accordance with the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. We periodically review the adequacy of the valuation allowance and recognize the benefits of deferred tax assets only as reassessment indicates that it is more likely than not that the deferred tax assets will be realized. For the year ended December 31, 2003, we determined that it is more likely than not that the deferred tax assets will be realized in the future. Accordingly, the valuation of approximately $79.9 million was released and a deferred tax asset of $73.9 million was recognized.

Impact of Recently Issued Accounting Standards

     In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, (“FIN 46”). FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is currently effective for all new variable interest entities created or acquired after February 1, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period ending after March 15, 2004. We currently believe adoption of FIN 46 will not have a material effect on our results of operations and financial condition.

45

     In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (“SFAS No. 150”). SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. With the exception of certain measurement criteria deferred indefinitely by the FASB, SFAS No. 150 was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was effective at the beginning of the first interim period beginning after June 15, 2003. We do not currently have any such instruments and therefore the adoption of SFAS No. 150 did not have an impact on our financial condition, results of operations or cash flows.

Information About Forward-Looking Statements

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

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

	•		the availability of suitable motion pictures for exhibition in our markets;
	•		competition in our markets;
	•		competition with other forms of entertainment;
	•		the effect of our leverage on our financial condition; and
	•		other factors, including the risk factors discussed on pages 14 through 22 in this annual report.

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

46

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     We are exposed to various market risks. We have floating rate debt instruments and, therefore, are subject to the market risk related to changes in interest rates.

     Interest paid on our debt is largely subject to changes in interest rates in the market. Our new revolving credit agreement and our new five-year term loan credit agreement are based on a structure that is priced over an index or LIBOR rate option. An increase of 1% in interest rates would increase the interest expense on our $100 million term loan credit agreement, $1 million on an annual basis. If our $50 million revolving credit agreement was fully drawn a 1% increase in interest rates would increase interest expenses $500,000 on an annual basis. The interest rate on our 7.500% senior subordinated notes is fixed and changes in interest rates will have no effect on annual interest expense.

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Consolidated Financial Statements for the year ended December 31, 2003.

47

Report Of Independent Auditors

To The Board of Directors and Shareholders of Carmike Cinemas, Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Carmike Cinemas, Inc and its subsidiaries at December 31, 2003, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, based on our audit, the financial statement schedule as of and for the year ended December 31, 2003 listed in the index appearing under Item 15(a)(2), presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and schedule are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements and schedule based on our audit. We conducted our audit of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, in 2002 the Company ceased amortization of goodwill in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

/s/  PricewaterhouseCoopers LLP

March 18, 2004

F-1

Report Of Independent Auditors

Board of Directors and Shareholders
Carmike Cinemas, Inc.

We have audited the accompanying consolidated balance sheets of Carmike Cinemas, Inc. and subsidiaries as of December 31, 2002 and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the two years in the period ended December 31, 2002. Our audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Carmike Cinemas, Inc. and subsidiaries at December 31, 2002 and the consolidated results of its operations and cash flows for each of the two years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 4 to the consolidated financial statements, in 2002 the Company ceased amortization of goodwill in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

/s/  Ernst & Young LLP

Atlanta, Georgia
March 3, 2003

F-2

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

See accompanying notes.

F-3

See accompanying notes.

F-4

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

See accompanying notes.

F-5

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