CARMIKE CINEMAS INC - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2004


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

For the transition period from ________ to _________

Commission file number 000-14993

CARMIKE CINEMAS, INC.

(Exact Name of Registrant as Specified in Its Charter)


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

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

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

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

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

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

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

Common Stock, par value $0.03 per share — 12,162,622 shares outstanding as of November 4, 2004

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4. CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS EFFECTIVE 8/23/04
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS
SIGNATURES
EXHIBIT INDEX
EX-31.1 302 Certification of CEO
EX-31.2 302 Certification of CFO
EX-32.1 906 Certification of CEO
EX-32.2 906 Certification of CFO

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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


			December 31,
	September 30,		2003
	2004		(restated)

Assets
Current assets:
Cash and cash equivalents	$	38,449	$	41,236
Accounts and notes receivable		2,282		2,061
Inventories		1,637		1,577
Prepaid expenses		6,174		6,956

Total current assets		48,542		51,830
Other assets:
Investment in and advances to partnerships		6,610		6,952
Deferred income tax asset		60,712		72,036
Assets held for sale		8,391		8,932
Other		13,767		11,189

		89,480		99,109
Property and equipment, net of accumulated depreciation		460,572		460,323
Goodwill, net of accumulated amortization		23,354		23,354

Total assets	$	621,948	$	634,616

See accompanying notes


	September 30,			December 31, 2003
	2004			(restated)
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	10,812		$	27,362
Accrued expenses		35,366			44,413
Dividends Payable		2,127			—
Current maturities of long-term debt and capital lease and financing obligations		2,962			2,162

Total current liabilities		51,267			73,937
Long-term liabilities:
Long-term debt, less current maturities		248,250			323,050
Capital lease and long-term financing obligations, less current maturities		68,301			67,889
Long-term trade payables		—			7,988

		316,551			398,927
Liabilities subject to compromise		4,830			21,521
Stockholders’ Equity
Preferred Stock, $1.00 par value, authorized 1,000,000 shares, none outstanding as of September 30, 2004 and December 31, 2003, respectively		—			—
Common Stock, $0.03 par value, authorized 20,000,000 shares, issued and outstanding 12,152,622 and 9,151,492 shares as of September 30, 2004 and December 31, 2003, respectively		365			275
Paid-in capital		307,564			214,270
Retained deficit		(58,629	)		(74,314	)

		249,300			140,231

Total liabilities and stockholders’ equity	$	621,948		$	634,616

See accompanying notes

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
				2003						2003
	2004			(restated)			2004			(restated)

Revenues
Admissions	$	77,750		$	86,539		$	245,652		$	242,763
Concessions and miscellaneous		39,178			41,688			121,300			119,118

		116,928			128,227			366,952			361,881
Costs and Expenses
Film exhibition costs		41,857			46,652			127,282			128,665
Concession costs		4,043			4,605			13,113			13,613
Other theatre operating costs		45,746			45,500			136,301			132,443
General and administrative expenses		4,588			3,862			13,468			10,697
Depreciation and amortization expenses		9,363			8,150			26,609			24,381
(Gain)/loss on disposals of property and equipment		7			(1	)		(570	)		(2,503	)

		105,604			108,768			316,203			307,296

Operating income		11,324			19,459			50,749			54,585
Other expenses
Interest expense		4,240			10,323			18,266			30,806
Loss on extinguishment of debt		—			—			9,579			—

Income before reorganization costs and income taxes		7,084			9,136			22,904			23,779
Reorganization costs		(5,116	)		(115	)		(8,997	)		(3,923	)

Income before income taxes		12,200			9,251			31,901			27,702
Income tax expense		4,574			—			11,962			—

Net income available for common stockholders	$	7,626		$	9,251		$	19,939		$	27,702

Weighted average shares outstanding:
Basic		11,991			8,991			11,608			8,991
Diluted		12,715			9,397			12,343			9,331
Net income per common share:
Basic	$	0.64		$	1.03		$	1.72		$	3.08
Diluted	$	0.60		$	0.98		$	1.62		$	2.97
Dividend declared per common share	$	0.175		$	—		$	0.35		$	—

See accompanying notes

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands)


	Nine Months Ended
	September 30,
				2003
	2004			(restated)

Operating Activities
Net income	$	19,939		$	27,702
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		26,609			24,381
Deferred Taxes		11,324			—
Reorganization items		(9,219	)		(10,210	)
Loss on extinguishment of debt		9,579			—
Non-cash compensation		4,038			3,932
Gain on disposals of property and equipment		(570	)		(2,503	)
Changes in operating assets and liabilities:
Accounts and notes receivable and inventories		(2,380	)		(275	)
Prepaid expenses		(10,044	)		(2,695	)
Accounts payable		(16,550	)		(16,296	)
Accrued expenses and other liabilities		(15,750	)		(11,575	)

Net cash provided by operating activities		16,976			12,461
Investing Activities
Purchases of property and equipment		(23,641	)		(14,461	)
Proceeds from sales of property and equipment		1,289			5,136

Net cash used in investing activities		(22,352	)		(9,325	)
Financing Activities
Debt:
Additional borrowings		250,263			—
Repayments of long-term debt		(332,334	)		(23,273	)
Repayments of liabilities subject to compromise		(1,785	)		—
Repayments of capital leases and long-term financing obligations		(774	)		(879	)
Issuance of common stock, net		89,346			—
Dividends paid to stockholders		(2,127	)		—

Net cash provided by (used in) financing activities		2,589			(24,152	)

Increase (decrease) in cash and cash equivalents		(2,787	)		(21,016	)
Cash and cash equivalents at beginning of period		41,236			53,491

Cash and cash equivalents at end of period	$	38,449		$	32,475

Non cash Transactions

In August 2004, the Company reached a settlement with a lessor/lender under which $6.2 million of proceeds received under a long-term financing obligation were offset against a corresponding amount of liabilities subject to compromise to the same lessor/lender.

See accompanying notes

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CARMIKE CINEMAS, INC. and SUBSIDIARIES
For the Three and Nine Months Ended September 30, 2004 and 2003

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

On August 8, 2000, Carmike Cinemas, Inc. (“Carmike”) and its subsidiaries, Eastwynn Theatres, Inc., Wooden Nickel Pub, Inc. and Military Services, Inc. (collectively “the Company”) filed voluntary petitions for relief under Chapter 11 (the “Chapter 11 Cases”) of the United States Bankruptcy Code. In connection with the Chapter 11 Cases, the Company was required to report in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, (“SOP 90-7”). SOP 90-7 requires, among other things, (1) pre-petition liabilities that are subject to compromise be segregated in the Company’s consolidated balance sheet as liabilities subject to compromise and (2) the identification of all transactions and events that are directly associated with the reorganization of the Company in the Consolidated Statements of Operations. The Company emerged from the Chapter 11 Cases pursuant to its plan of reorganization effective on January 31, 2002.

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

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

The Company recognizes deferred revenue from the sale of gift certificates and screen advertising. Gift certificates are recognized as revenue upon redemption. Deferred revenue related to screen advertising is recognized over the course of our contractual agreement with a third party provider that arranges on-screen advertising.

The Company accounts for its stock-based compensation plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”). Reflected in the Consolidated Statements of Operations for the three months ended September 30, 2004 and 2003 is $1.0 million and $1.4 million, respectively, of stock-based employee compensation cost related to stock grants ($0.8 million from fixed accounting and $0.2 million and $0.6 million, respectively, from variable accounting.) Additionally, reflected in the Consolidated Statements of Operations for the nine months ended September 30, 2004 and 2003 is $4.0 million and $3.9 million, respectively, of stock-based employee compensation cost related to stock grants ($2.4 million from fixed accounting and $1.6 million and $1.5 million, respectively, from variable accounting.)

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition,

option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The Company has adopted SFAS No. 148, Accounting for Stock Based Compensation-Transition and Disclosure (“SFAS No. 148”). For SFAS No. 148 purposes, the fair value of each option grant and stock based award has been estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:


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

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
				2003						2003
	2004			(restated)			2004			(restated)

Net income available for common stock:
As reported	$	7,626		$	9,251		$	19,939		$	27,702
Plus: expense recorded on deferred stock compensation, net of related tax effects		638			1,445			2,524			3,934
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(923	)		(1,175	)		(2,825	)		(3,489	)

Pro forma – for SFAS No. 123	$	7,341		$	9,521		$	19,638		$	28,147

Basic net earnings per common share:
As reported	$	0.64		$	1.03		$	1.72		$	3.08
Pro forma – for SFAS No. 123	$	0.61		$	1.06		$	1.69		$	3.13
Diluted net earnings per common share:
As reported	$	0.60		$	0.98		$	1.62		$	2.97
Pro forma – for SFAS No. 123	$	0.58		$	1.01		$	1.59		$	3.02

The Company’s Board of Directors declared a quarterly dividend of $0.175 per share on September 13, 2004. The dividend was paid on November 2, 2004 to stockholders of record as of October 4, 2004. The aggregate amount of this dividend was approximately $2.1 million.

NOTE 2 – ASSETS HELD FOR SALE

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

NOTE 3 — OTHER ASSETS

Other assets are as follows:


			December
	September		31, 2003
	30, 2004		(restated)

Loan/lease origination fees	$	10,583	$	7,723
Deposits and binders		3,162		3,440
Notes receivable less short-term maturity		22		26

	$	13,767	$	11,189

NOTE 4 — DEBT

Debt consisted of the following (in thousands):


	September			December
	30, 2004			31, 2003
Revolving credit facility	$	—		$	—
Post-bankruptcy term loan		—			168,735
New term loan		99,250			—
10.375% senior subordinated notes		—			154,315
7.500% senior subordinated notes		150,000			—
Industrial revenue bonds; payable in equal installments through May 2006, with interest rates ranging from 5.75% to 7%		414			707

		249,664			323,757
Current maturities		(1,414	)		(707	)

	$	248,250		$	323,050

2004 Financing Transactions

On February 4, 2004, we completed a public offering of 4,850,000 shares of our common stock (3,000,000 of which were issued and sold by us and 1,850,000 of which were sold by selling stockholders), priced at $32.00 per share. An additional 675,000 shares were sold by certain selling stockholders on February 11, 2004 pursuant to an underwriters’ over-allotment option. Net proceeds to us, after discounts and expenses, were $89.3 million. In addition, we completed an offering of $150.0 million in aggregate principal amount of 7.500% senior subordinated notes due 2014 to institutional investors and entered into new senior secured credit facilities consisting of a $50.0 million 54-month revolving credit facility and a $100.0 million five-year term loan. We used the proceeds from the common stock offering, the 7.500% senior

subordinated notes offering and the new term loan credit facility, as well as excess cash, to repay the outstanding balance of $168.7 million under our post-bankruptcy term loan, tender for or redeem $154.3 million of our 10.375% senior subordinated notes, repay $7.3 million of our long-term trade payables and pay related transaction fees and expenses.

NOTE 5 — PROCEEDINGS UNDER CHAPTER 11

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

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


	Three months ended						Nine months ended
	September 30,						September 30,
	2004			2003			2004			2003
Change in estimate for general unsecured claims	$	(11,348	)	$	(280	)	$	(15,418	)	$	(4,907	)
Change in estimate for related receivables and deferred expenses		6,200			—			6,200			—
Professional fees and other		32			165			221			984

	$	(5,116	)	$	(115	)	$	(8,997	)	$	(3,923	)

NOTE 6 — LIABILITIES SUBJECT TO COMPROMISE

The principal categories of obligations classified as Liabilities Subject to Compromise under the Chapter 11 Cases are identified below. The amounts in total may vary significantly from the stated amounts of proofs of claims filed with the bankruptcy court, and may be subject to future adjustments depending on bankruptcy court action, further developments with respect to potential disputed claims, and determination as to the value of any collateral securing claims or other events. During the three months ended September 30, 2004, certain claims and long-term trade payables were resolved for amounts different from their original claims; these changes resulted in a net change in estimate of liability of $11.3 million.

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


	September 30, 2004		December 31, 2003
Disputed unsecured claims	$	4,606	$	20,424
Disputed priority claims		224		1,097

	$	4,830	$	21,521

The change in outstanding Liabilities Subject to Compromise results from a change in estimate of $14.6 million and settlements of $2.1 million.

NOTE 7 — INCOME TAXES

As of December 31, 2003 the Company reversed the valuation allowance related to its deferred tax assets as it was determined to be more likely than not that net deferred tax assets would be realized in future periods. At September 30, 2004 the Company had deferred tax assets of approximately $60.7 million remaining. The income tax expense of $4.6 million and $12.0 million for the three and nine months ended September 30, 2004, respectively, reflects a combined federal and state tax rate of 37.5%.

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

The sale of shares in the offering of August, 2004, caused the Company to undergo an “ownership change” within the meaning of section 382 (g) of the Internal Revenue Code of 1986, as amended. The ownership change will subject our net operating loss carryforwards to an annual limitation on their use, which will restrict our ability to use them to offset our taxable income in periods following the ownership change. In general, the annual use limitation equals the aggregate value of the Company’s stock at the time of the ownership change multiplied by a specified tax-exempt interest rate, and is further increased by certain “built-in gains” recognized during the five-year period following the ownership change. Based on the trading value of $33.00 per share at the time of the change and certain assumptions regarding the Company’s recognized built-in gains, such limitation is projected to be $26.9 million per year for the first five years and will decrease to approximately $15 million per year thereafter. The annual use limitation will be pro rated for the post-change period ending on December 31, 2004.

The Company has federal and state net operating loss carryforwards of approximately $84.9 million which will begin to expire in the year 2020.

NOTE 8 — STOCK PLANS

Upon emergence from Chapter 11, the Company’s Board of Directors approved a new management incentive plan, the Carmike Cinemas, Inc. 2002 Stock Plan (the “2002 Stock Plan”). The Board of Directors has approved the grant of 780,000 shares under the 2002 Stock Plan to Michael W. Patrick, the Company’s Chief Executive Officer. Pursuant to the terms of Mr. Patrick’s employment agreement dated January 31, 2002 these shares will be delivered in three equal installments on January 31, 2005, 2006 and 2007 unless, prior to the delivery of any such installment, Mr. Patrick’s employment is terminated for Cause (as defined in his employment agreement) or he has violated certain covenants set forth in such employment agreement. In May 2002, the Company’s Stock Option Committee (which administered the 2002 Stock Plan prior to August 2002) approved grants of the remaining 220,000 shares to a group of seven other members of senior management. These shares are to be earned over a three year period, commencing with the year ended December 31, 2002, with the shares being earned as the executive achieves specific performance goals set for the executive to be achieved during each of these years. In some instances the executive may earn partial amounts of his or her stock grant based on graded levels of performance. Shares earned each year will vest and be receivable approximately two years after the calendar year in which they were earned, provided, with certain

exceptions, the executive remains an employee of the Company. One of the seven grants to senior executives includes a grant of 35,000 shares to a former employee of the Company.

Pursuant to an agreement with the former employee, the Company will deliver to the former employee the 17,000 shares earned in connection with his performance in 2002. These 17,000 shares shall vest on January 31, 2005. Of the 220,000 shares granted to members of senior management, 69,250 shares were earned on December 31, 2002 and 14,250 shares were forfeited. However, the Compensation Committee (renamed the Compensation, Nominating and Corporate Governance Committee subsequent to December 31, 2003) approved two additional grants of 5,500 shares to two members of senior management on March 7, 2003, which shares are deemed to be earned and subject only to vesting requirements. For the year ended December 31, 2003, 62,980 shares were earned and 15,520 shares were forfeited. On May 21, 2004, the Compensation, Nominating and Corporate Governance Committee approved one additional grant of 1,130 shares to one member of senior management. Therefore, of the original 220,000 shares granted to members of senior management, 161,360 shares are deemed to have been earned, subject only to vesting requirements, 23,640 shares have been forfeited and 35,000 shares may be earned over the next year. The Company has included in stockholders’ equity $13.7 million and $9.6 million at September 30, 2004 and December 31, 2003, respectively, related to the 2002 Stock Plan.

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

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

On March 31, 2004, the Board of Directors adopted the Carmike Cinemas, Inc. 2004 Incentive Stock Plan, which was approved by the stockholders on May 21, 2004. The Compensation, Nominating and Corporate Governance Committee may grant stock options, stock

grants, stock units, and stock appreciation rights under the 2004 Incentive Stock Plan to certain eligible employees and to outside directors. There are 830,000 shares of Common Stock reserved for issuance pursuant to grants made under the 2004 Incentive Stock Plan in addition to the 225,000 unissued shares that were previously authorized for issuance under the Employee Incentive Plan and the Directors Incentive Plan which may be forfeited after the effective date of the 2004 Incentive Stock Plan. No further grants may be made under the Employee Incentive Plan or Directors Incentive Plan.

NOTE 9 — EARNINGS PER SHARE

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

per share data (in thousands, except for share data),


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
				2003						2003
	2004			(restated)			2004			(restated)

Outstanding shares		12,152			9,089			11,769			9,089
Less restricted stock issued		(161	)		(98	)		(161	)		(98	)

Basic shares outstanding		11,991			8,991			11,608			8,991
Dilutive shares:
Restricted stock		120			54			122			49
Stock grants		565			340			571			290
Stock options		39			12			42			1

		12,715			9,397			12,343			9,331

Earnings per share:
Basic	$	0.64		$	1.03		$	1.72		$	3.08
Diluted	$	0.60		$	0.98		$	1.62		$	2.97

NOTE 10 — CONDENSED FINANCIAL DATA

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

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

Condensed Consolidating Balance Sheets
As of September 30, 2004


	Carmike		Guarantor
	Cinemas, Inc.		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	36,639	$	1,810		$	—		$	38,449
Accounts and notes receivable		2,369		(87	)					2,282
Inventories		481		1,156						1,637
Prepaid expenses		2,638		3,536						6,174

Total current assets		42,127		6,415			—			48,542
Other assets:
Investment in and advances to partnerships		4,548		2,062						6,610
Investment in subsidiaries		114,467					(114,467	)		—
Deferred income tax assets		27,849		32,863						60,712
Other		231,826		21,610			(231,278	)		22,158
Property and equipment, net		113,790		346,782						460,572
Goodwill, net		5,914		17,440						23,354

Total assets	$	540,521	$	427,172		$	(345,745	)	$	621,948

Liabilities and stockholders’ equity
Current liabilities:
Account payable	$	7,946	$	2,866		$	—		$	10,812
Accrued expenses		14,793		20,573						35,366
Dividends payable		2,127		—						2,127
Current maturities of long-term indebtedness and capital lease obligations		1,613		1,349						2,962

Total current liabilities		26,479		24,788			—			51,267
Long-term debt less current maturities		248,250		—						248,250
Capital lease and long-term financing obligations less current maturities		11,662		56,639						68,301
Other		—		231,278			(231,278	)		—
Liabilities subject to compromise		4,830		—						4,830
Stockholders’ equity		249,300		114,467			(114,467	)		249,300

Total liabilities and stockholders’ equity	$	540,521	$	427,172		$	(345,745	)	$	621,948

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


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries		Eliminations			Consolidated
Revenues
Admissions	$	15,400		$	62,350	$	—			$	77,750
Concessions and other		12,979			31,467		(5,268	)			39,178

		28,379			93,817		(5,268	)			116,928
Costs and expenses
Film exhibition costs		7,954			33,903						41,857
Concession costs		755			3,288						4,043
Other theatre operating costs		10,370			40,644		(5,268	)			45,746
General and administrative expenses		4,586			2						4,588
Depreciation and amortization expenses		2,665			6,698						9,363
Loss on disposal of property and equipment		—			7						7

		26,330			84,542		(5,268	)			105,604

Operating income		2,049			9,275		—				11,324
Interest (expense)/benefit		(2,048	)		6,288						4,240

Income before reorganization costs and income taxes		4,097			2,987		—				7,084
Reorganization costs		(5,116	)		—						(5,116	)

Income before income taxes & equity in earnings of subsidiaries		9,213			2,987		—				12,200
Income tax expense		3,454			1,120						4,574

		5,759			1,867		—				7,626
Equity in earnings of subsidiaries		1,867			—		(1,867	)			—

Net income available for common stockholders	$	7,626		$	1,867	$	(1,867	)		$	7,626

Condensed Consolidating Statements of Operations
For Nine Months Ended September 30, 2004


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Revenues
Admissions	$	48,476		$	197,176		$	—		$	245,652
Concessions and other		41,254			97,167			(17,121	)		121,300

		89,730			294,343			(17,121	)		366,952
Costs and expenses
Film exhibition costs		24,000			103,282						127,282
Concession costs		2,427			10,686						13,113
Other theatre operating costs		30,637			122,785			(17,121	)		136,301
General and administrative expenses		13,472			(4	)					13,468
Depreciation and amortization expenses		6,514			20,095						26,609
Gain on disposal of property and equipment		(9	)		(561	)					(570	)

		77,041			256,283			(17,121	)		316,203

Operating income		12,689			38,060			—			50,749
Interest expense		(1,337	)		19,603						18,266
Loss on extinguishment of debt		9,579			—						9,579

Income before reorganization costs and income taxes		4,447			18,457			—			22,904
Reorganization costs		(8,997	)		—						(8,997	)

Income before income taxes and equity in earnings of subsidiaries		13,444			18,457			—			31,901
Income tax expense		5,041			6,921						11,962

		8,403			11,536			—			19,939
Equity in earnings of subsidiaries		11,536			—			(11,536	)		—

Net income available for common stockholders	$	19,939		$	11,536		$	(11,536	)	$	19,939

Condensed Consolidating Statements of Cash Flows
For Nine Months Ended September 30, 2004


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
Operating activities
Net income	$	19,939		$	11,536		$	(11,536	)	$	19,939
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,514			20,095						26,609
Deferred income taxes		5,041			6,283						11,324
Non-cash compensation		4,038			—						4,038
Non-cash reorganization items		(9,219	)		—						(9,219	)
Loss on extinguishment of debt		9,579			—						9,579
Gain on disposal of property and equipment		(9	)		(561	)					(570	)
Changes in operating assets and liabilities		(18,366	)		(37,894	)		11,536			(44,724	)

Net cash provided by (used in) operating activities		17,517			(541	)		—			16,976
Investing activities
Purchases of property and equipment		(9,349	)		(14,292	)					(23,641	)
Proceeds from sale of property and equipment		17			1,272						1,289

Net cash provided by (used in) investing activities		(9,332	)		(13,020	)		—			(22,352	)
Financing activities
Additional borrowing, net of debt issuance costs		250,263			—						250,263
Repayments of debt		(334,010	)		(883	)					(334,893	)
Dividends paid to stockholders		(2,127	)		—						(2,127	)
Issuance of common stock, net		89,346			—						89,346

Net cash provided by (used in) financing activities		3,472			(883	)		—			2,589

Increase (decrease) in cash and cash equivalents		11,657			(14,444	)		—			(2,787	)
Cash and cash equivalents at beginning of period		24,982			16,254			—			41,236

Cash and cash equivalents at end of period	$	36,639		$	1,810		$	—		$	38,449

Condensed Consolidating Balance Sheets
As of December 31, 2003


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

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

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

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

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

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

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


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
	(restated)			(restated)			(restated)			(restated)
Revenues
Admissions	$	17,690		$	68,849		$	—		$	86,539
Concessions and other		14,550			33,391			(6,253	)		41,688

		32,240			102,240			(6,253	)		128,227
Costs and expenses
Film exhibition costs		8,813			37,839						46,652
Concession costs		895			3,710						4,605
Other theatre operating costs		10,295			41,458			(6,253	)		45,500
General and administrative expenses		3,866			(4	)					3,862
Depreciation and amortization expenses		1,772			6,378						8,150
(Gain)/loss on disposal of property and equipment		1			(2	)					(1	)

		25,642			89,379			(6,253	)		108,768

Operating income		6,598			12,861			—			19,459
Interest expense		2,800			7,523						10,323

Income before reorganization costs and income taxes		3,798			5,338			—			9,136
Reorganization costs		(115	)		—						(115	)

Income before income taxes and equity in earnings of subsidiaries		3,913			5,338			—			9,251
Income tax expense		—			—						—

		3,913			5,338			—			9,251
Equity in earnings of subsidiaries		5,338			—			(5,338	)		—

Net income available for common stockholders	$	9,251		$	5,338		$	(5338	)	$	9,251

Condensed Consolidating Statements of Operations
For Nine Months Ended September 30, 2003


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
	(restated)			(restated)			(restated)			(restated)
Revenues
Admissions	$	47,901		$	194,862		$	—		$	242,763
Concessions and other		41,604			95,429			(17,915	)		119,118

		89,505			290,291			(17,915	)		361,881
Costs and expenses
Film exhibition costs		24,044			104,621						128,665
Concession costs		2,412			11,201						13,613
Other theatre operating costs		30,250			120,108			(17,915	)		132,443
General and administrative expenses		10,705			(8	)					10,697
Depreciation and amortization expenses		5,316			19,065						24,381
Gain on disposal of property and equipment		(748	)		(1,755	)					(2,503	)

		71,979			253,232			(17,915	)		307,296

Operating income		17,526			37,059			—			54,585
Interest expense		7,966			22,840						30,806

Income before reorganization costs and income taxes		9,560			14,219			—			23,779
Reorganization costs		(3,923	)		—						(3,923	)

Income before income taxes and equity in earnings of subsidiaries		13,483			14,219			—			27,702
Income tax expense		—			—						—

		13,483			14,219			—			27,702
Equity in earnings of subsidiaries		14,219			—			(14,219	)		—

Net income available for common stockholders	$	27,702		$	14,219		$	(14,219	)	$	27,702

Condensed Consolidating Statements of Cash Flows
For Nine Months Ended September 30, 2003


	Carmike			Guarantor
	Cinemas, Inc.			Subsidiaries			Eliminations			Consolidated
	(restated)			(restated)			(restated)			(restated)
Operating activities
Net income	$	27,702		$	14,219		$	(14,219	)	$	27,702
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		5,316			19,065						24,381
Non-cash compensation		3,932			—						3,932
Non-cash reorganization items		(10,210	)		—						(10,210	)
Gain on disposal of property and equipment		(748	)		(1,755	)					(2,503	)
Changes in operating assets and liabilities		(13,541	)		(31,519	)		14,219			(30,841	)

Net cash provided by (used in) operating activities		12,451			10			—			12,461
Investing activities
Purchases of property and equipment		(5,479	)		(8,982	)					(14,461	)
Proceeds from sale of property and equipment		1,967			3,169						5,136

Net cash provided by (used in) investing activities		(3,512	)		(5,813	)		—			(9,325	)
Financing activities
Additional borrowing, net of debt issuance costs		—			—						—
Repayments of debt		(23,362	)		(790	)					(24,152	)

Net cash used in financing activities		(23,362	)		(790	)		—			(24,152	)

Increase (decrease) in cash and cash equivalents		(14,423	)		(6,593	)		—			(21,016	)
Cash and cash equivalents at beginning of period		39,789			13,702			—			53,491

Cash and cash equivalents at end of period	$	25,366		$	7,109		$	—		$	32,475

NOTE 11 — LEGAL PROCEEDINGS.

From time to time, we are involved in routine litigation and legal proceedings in the ordinary course of our business, such as personal injury claims, employment matters, contractual disputes and claims alleging ADA violations. The Company has established a reserve of $1.0 million for potential litigation. The Company relied on the provisions of Financial Accounting Standard No. 5 “Accounting for Contingencies” in establishing this reserve. The Company determined that it was probable that a liability had been incurred based on the filing of a lawsuit by the EEOC as described below. Additionally, the Company determined the amount of the loss could be reasonably estimated based on the demands of the claimants. Currently, we do not have any pending litigation or proceedings that we believe will have a material adverse effect, either individually or in the aggregate, upon us.

Between late December 2003 and mid-March 2004, eight current or former employees of the Carmike 15 theatre in Raleigh, North Carolina filed charges of discrimination against us with the U.S. Equal Employment Opportunity Commission, the EEOC. All eight charging parties alleged that they were sexually harassed by a male supervisor who worked at the Carmike 15 theatre from February 2003 until his termination in mid-October 2003. We submitted position statements and documents to the EEOC in response to all eight charges. The EEOC conducted an on-site investigation at the Carmike 15 theatre on March 22, 2004 and later completed that investigation via telephone interviews. At the time of the on-site investigation, we had received seven of the charges; the eighth charge was received after the on-site investigation.

On June 18, 2004, the EEOC issued determinations and invitations to conciliate in connection with all eight charges. In each of the eight cases, the EEOC determined (inter alia) that “there is reasonable cause to believe that Charging Party and a class of male employees were subjected to a sexually hostile work environment in violation of Title VII of the Civil Rights Act of 1964.”

On or about September 16, 2004, the EEOC filed a lawsuit against us in the U.S. District Court, E.D. North Carolina, asserting sexual harassment claims on behalf of seven named claimants and “other similarly situated male employees” and seeking injunctive relief, medical expenses, and compensatory and punitive damages in unspecified amounts. We filed our answer and defenses to the EEOC’s complaint on November 15, 2004.

On or about November 4, 2004, attorneys for some of the claimants filed a motion to intervene on behalf of five claimants and family members/guardians of five other claimants. The proposed complaint submitted with the motion to intervene includes claims under state and federal law, including claims of negligent hiring, promotion, and retention, negligent training and supervision, assault, intentional and negligent infliction of emotional distress, sexual harassment and retaliation/constructive discharge. The intervenors seek injunctive relief, costs and attorneys’ fees, as well as compensatory and punitive damages in unspecified amounts. The motion to intervene was granted on November 23, 2004.

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

NOTE 12- IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

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

NOTE 13 — RECLASSIFICATIONS

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

NOTE 14 – RESTATEMENT

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

Also during the third quarter of 2004, the Company completed an analysis of certain prior period bankruptcy-related and other costs, which resulted in the identification of additional tax deductions related to certain of these costs and thus an increase to net operating loss carryforwards as of December 31, 2003. For financial statement purposes, the tax benefit of those additional deductions should have been recognized as of December 31, 2003, the point at which we eliminated the valuation allowance against our other deferred tax assets. Based on this analysis, the Company has restated the previously reported amounts of deferred tax asset as of December 31, 2003 and tax benefit for the year ended December 31, 2003 to increase both such amounts by the $4.0 million tax effect of the additional deductions. This adjustment, along with the aforementioned lease adjustments is reflected in the table in Note 17 to the consolidated financial statements in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2003.

The effect of these restatements on earnings per common share was as follows:


	Basic			Diluted
For the three months ended September 30, 2003
Lease transactions	$	(0.04	)	$	(0.04	)
For the nine months ended September 30, 2003
Lease transactions	$	(0.12	)	$	(0.12	)

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

December 31, 2003


Consolidated Balance Sheet	As Previously Reported		As Restated
Recoverable construction allowances	$	355	$	—
Prepaid expenses		10,714		6,956
Property and Equipment net of accumulated depreciation		420,831	$	460,323
Deferred income tax asset		73,852		72,036
Other assets		14,456		11,189
Total assets		604,320		634,616
Accrued expenses		44,412		44,413
Total debt		376,430		393,101
Total stockholder’s equity	$	126,607	$	140,231

Consolidated Statements of Operations (unaudited)(restated)
For the three months ended September 30, 2003


	As reported		As restated
Other theatre operating costs	$	46,809	$	45,500
Depreciation and amortization expenses		7,711		8,150
Operating Income		18,589		19,459
Interest expense		9,678		10,323
Income before reorganization costs and income taxes		8,911		9,136
Net income available for common stockholders	$	9,026	$	9,257
Net Income per common share
Basic	$	1.00	$	1.03
Diluted	$	0.97	$	0.98

Consolidated Statements of Operations (unaudited)(restated)
For the nine months ended September 30, 2003


	As reported		As restated
Other theatre operating costs	$	136,016	$	132,443
Depreciation and amortization expenses		23,134		24,381
Operating Income		52,259		54,585
Interest expense		29,141		30,806
Income before reorganization costs and income taxes		23,118		23,779
Net income available for common stockholders	$	27,041	$	27,702
Net Income per common share
Basic	$	3.01	$	3.08
Diluted	$	2.90	$	2.97

Consolidated Statements of Cash Flows (unaudited)(restated)
For the nine months ended September 30, 2003


	As reported			As restated
Net cash provided by operating activities	$	12,311		$	12,461
Net cash used in investing activities	$	(5,025	)	$	(9,325	)
Net cash used in financing activities	$	(28,302	)	$	(24,152	)

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

EMERGENCE FROM CHAPTER 11

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

RESULTS OF OPERATIONS

Restatement

Also during the third quarter of 2004, the Company completed an analysis of certain prior period bankruptcy-related and other costs, which resulted in the identification of additional tax deductions related to certain of these costs and thus an increase to net operating loss carryforwards as of December 31, 2003. For financial statement purposes, the tax benefit of these additional deductions should have been recognized as of December 31, 2003, the point at which we eliminated the valuation allowance against our other deferred tax assets. Based on this analysis, the Company has restated the previously reported amounts of deferred tax asset as of December 31, 2003 and tax benefit for the year ended December 31, 2003 to increase both such amounts by the $4.0 million tax effect of the additional deductions. This adjustment, along with the aforementioned lease adjustments is reflected in the table in Note 17 to the consolidated financial statements in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2003.

Comparison of Three and Nine Months Ended September 30, 2004 and 2003

Revenues.

The Company collects substantially all of its revenues from the sales of admission tickets and concessions. The table below provides a comparative summary of the operating data for this revenue generation.


	For the three months ended				For the nine months ended
	September 30, 2004		September 30, 2003		September 30, 2004		September 30, 2003
Average theatres		287		301		291		304
Average screens		2,200		2,248		2,217		2,253
Average attendance per screen		6,874		7,821		21,540		21,980
Average admission price	$	5.14	$	4.92	$	5.14	$	4.90
Average concession per patron	$	2.31	$	2.14	$	2.31	$	2.17
Total attendance (in thousands)		15,126		17,582		47,754		49,520
Total revenues (in thousands)	$	116,928	$	128,227	$	366,952	$	361,881

Total revenues for the three months ended September 30, 2004 compared to the three months ended September 30, 2003 decreased 8.8%. This decrease is due to a 14.0% decrease in total attendance offset by increases in average admission prices and average concession prices.

Total revenues for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003 increased 1.4%. This increase is due to a 3.6% decrease in total attendance offset by increases in average admission prices and average concession prices.

We operated 285 theatres with 2,195 screens at September 30, 2004 compared to 300 theatres with 2,239 screens at September 30, 2003.

The table below shows the activity of theatre openings and closures for the nine months ended September 30, 2004.


							Average Screens/
	Theatres			Screens			Theatre
Total at December 31, 2003		299			2,253			7.5
New construction		2			22			11.0
Closures		(16	)		(80	)		5

Total at September 30, 2004		285			2,195			7.7

The closures shown above were normal lease expirations. The Company incurred no additional liability due to these closures.

The table below summarizes operating expense data for the periods presented.


	For the three months ended								For the nine months ended
			September 30, 2003									September 30, 2003
(in thousands)	September 30, 2004		(restated)			% dec/(inc)			September 30, 2004			(restated)			% dec/(inc)
Film exhibition costs	$	41,857	$	46,652			10.3	%	$	127,282		$	128,665			1.1	%
Concession costs	$	4,043	$	4,605			12.2	%	$	13,113		$	13,613			3.7	%
Other theatre operating costs	$	45,746	$	45,500			(0.5	%)	$	136,301		$	132,443			(2.9	%)
General and administrative expenses	$	4,588	$	3,862			(18.8	%)	$	13,468		$	10,697			(25.9	%)
Depreciation and amortization expenses	$	9,363	$	8,150			(14.9	%)	$	26,609		$	24,381			(9.1	%)
(Gain)/loss on disposals of property and equipment	$	7	$	(1	)		800.0	%	$	(570	)	$	(2,503	)		77.2	%

Film exhibition costs fluctuate in direct relation to the increases and decreases in admissions revenue. The decreases in film exhibition costs were due to the decrease in revenue for the related periods. As a percentage of admissions revenue, film exhibition costs were 53.8% for the three months ended September 30, 2004 as compared to 53.9% for the three months ended September 30, 2003. For the nine months ended September 30, 2004, film exhibition costs were 51.8% of admissions revenue compared to 53.0% of admissions revenue for the nine months ended September 30, 2003.

Concessions costs fluctuate with the changes in concessions revenue. As a percentage of concessions and miscellaneous revenues, concession costs were 10.3% for the three months ended September 30, 2004 as compared to 11.0% for the three months ended September 30, 2003. For the nine months ended September 30, 2004, concessions costs were 10.8% of concessions and miscellaneous revenues, compared to 11.4% for the nine months ended September 30, 2003.

Other theatre operating costs for the three months ended September 30, 2004 increased due to increases in rent, utilities and repair costs compared to the three months ended September 30, 2003. Other theatre operating costs for the nine months ended September 30, 2004 increased due to increases in rent, utilities and repair costs compared to the nine months ended September 30, 2003, as well as the establishment of a reserve of $1.0 million for potential litigation. For more information concerning this reserve see Note 11- Legal Proceedings of the Notes to Consolidated Financial Statements.

General and administrative expenses for the three months ended September 30, 2004 increased 18.8% compared to the three months ended September 30, 2003 due to professional fees related to Sarbanes-Oxley compliance and overall increases in other expenses. For the nine months ended September 30, 2004 general and administrative expenses increased 25.9% compared to the nine months ended September 30, 2003 due to professional fees related to Sarbanes-Oxley compliance and overall increases in other expenses.


	For the three months ended				For the nine months ended
			September 30,				September 30,
	September 30,		2003		September 30,		2003
	2004		(restated)		2004		(restated)
Depreciation	$	8,466	$	8,015	$	25,377	$	23,974
Amortization		897		135		1,232		407

Totals	$	9,363	$	8,150	$	26,609	$	24,381

Depreciation and amortization expenses for the three and nine months ended September 30, 2004 increased 14.9% and 9.1%, respectively compared to the three and nine months ended September 30, 2003. This increase reflects the effect of purchases of fixed assets during the latter portion of 2003 and first half of 2004.

The loss on disposal of property and equipment for the three months ended September 30, 2004 amounted to $7,000 compared to a gain of $1,000 for the three months ended September 30, 2003. This loss relates to the expiration of an operating lease which carried a remaining book value for leasehold improvements at the time of expiration.

Gains on disposals of property and equipment for the nine months ended September 30, 2004 amounted to $570,000 compared to $2.5 million for the nine months ended September 30, 2003. This decrease was due to lower sales of surplus property. We sold two previously closed theatres and one parcel of land during the nine months ended September 30, 2004 compared to six theatres and one parcel of land during the nine months ended September 30, 2003.

Operating Income. Operating income for the three months ended September 30, 2004 decreased 42.1% to $11.3 million compared to $19.5 million for the three months ended September 30, 2003. As a percentage of revenues, operating income for the three months ended September 30, 2004 was 9.7% compared to 15.2% for the three months ended September 30, 2003.

Operating income for the nine months ended September 30, 2004 decreased 7.1% to $50.7 million compared to $54.6 million for the nine months ended September 30, 2003. As a percentage of revenues, operating income for the nine months ended September 30, 2004 was 13.8% compared to 15.1% for the nine months ended September 30, 2003.

Interest expense. Interest expense for the three months ended September 30, 2004 decreased 59.2% to $4.2 million from $10.3 million for the three months ended September 30, 2003. The decrease is related to lower indebtedness and interest rates obtained through our debt refinancing, as well as interest reductions of approximately $2.8 million related to lowering estimates on outstanding liabilities subject to compromise.

Interest expense for the nine months ended September 30, 2004 decreased 39.0% to $18.3 million from $30.8 million for the nine months ended September 30, 2003. The decrease is related directly to lower indebtedness and interest rates obtained through our debt refinancing, as well as interest reductions and credits of approximately $3.7 million related to lowering estimates on outstanding liabilities subject to compromise.

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

Income tax expense. Reflecting the reversal of the deferred tax asset valuation allowance at December 31, 2003, we recognized an income tax expense of $4.6 million for the three months ended September 30, 2004, representing a combined federal and state tax rate of 37.5%, compared to no income tax expense for the three months ended September 30, 2003.

We recognized an income tax expense of $12.0 million for the nine months ended September 30, 2004, representing a combined federal and state tax rate of 37.5%, compared to no income tax expense for the nine months ended September 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Our revenues are collected in cash and credit card payments. Because we receive our revenue in cash prior to the payment of related expenses, we have an operating “float” which partially finances our operations. Our current liabilities exceeded our current assets by $2.7 million as of September 30, 2004 compared to $22.1 million at December 31, 2003. The decreased deficit recorded as of September 30, 2004 reflects the reduction in the current long-term portion of debt through our refinancing that was completed on February 4, 2004. As a component of this debt restructuring, the Company also issued 3.0 million shares of common stock for net proceeds after discounts and expenses of $89.3 million. The proceeds from this offering were used to reduce outstanding debt. The deficit will be funded through anticipated operating cash flows as well as the ability to draw from our new revolving credit agreement. At September 30, 2004, we had available borrowing capacity of $50 million under our new revolving credit facility.

During the nine months ended September 30, 2004, we made capital expenditures of approximately $23.6 million. Our total budgeted capital expenditures for 2004 are $35.0 million, which we anticipate will be funded by using operating cash flows, available cash from our revolving credit facility and landlord-funded new construction and theatre remodeling, when available. We expect that substantially all of these capital expenditures will continue to consist of new theatre construction and theatre remodeling. Our capital expenditures for any new theatre generally precede the opening of the new theatre by several months. In addition, when we rebuild or remodel an existing theatre, the theatre must be closed, which results in lost revenue until the theatre is reopened. Therefore, capital expenditures for new theatre construction, rebuilds and remodeling in a given quarter may not result in revenues from the new theatre or theatres for several quarters.

Net cash provided by operating activities was $17.0 million for the nine months ended September 30, 2004 compared to $12.5 million for the nine months ended September 30, 2003. This change is principally due to lower interest expense. Net cash used in investing activities was $22.4 million for the nine months ended September 30, 2004 compared to $9.3 million for the nine months ended September 30, 2003. For the nine months ended September 30, 2004 net cash provided by financing activities was $2.6 million compared to net cash used in financing activities of $24.2 million for the nine months ended September 30, 2003 as a result of our refinancing.

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

Our ability to service our indebtedness will require a significant amount of cash. Our ability to generate this cash will depend largely on future operations. Based upon our current level of operations, we believe that cash flow from operations, available cash, sales of surplus assets and borrowings under our new credit agreements will be adequate to meet our liquidity needs. However, the possibility exists that, if our liquidity needs are not met and we are unable to service our indebtedness, we could come into technical default under any of our debt instruments, causing the agents or trustees for those instruments to declare all payments due immediately or, in the case of our senior debt, to issue a payment blockage to the more junior debt.

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

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

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

SEASONALITY

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

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

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

expressions. These statements include, among others, statements regarding our strategies, sources of liquidity, the availability of film product and the opening or closing of theatres during 2004.

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

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

• competition in our markets;

• competition with other forms of entertainment;

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

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

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

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

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

ITEM 4. CONTROLS AND PROCEDURES

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

On November 15, 2004, we announced that we were delaying the filing of this Form 10-Q for the third quarter ended September 30, 2004 due to our ongoing evaluation of certain lease and other accounting issues related to transactions entered into in prior periods. Concurrently herewith, we are also filing a 10-K/A for the year ended December 31, 2003 to reflect the restatement of our consolidated financial statements, the notes thereto, and related disclosures for the years ended 1999, 2000, 2001, 2002 and 2003. We also intend to file: (1) a Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2004, to reflect the restatement of our unaudited consolidated financial statements, the notes thereto and related disclosures for such quarter, and (2) a Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2004 to reflect the restatement of our unaudited consolidated financial statements, the notes thereto and related disclosures for such quarter. These restatements are necessary in order to correct the improper reporting of certain leases as operating leases, rather than as financing obligations, as well as to record an adjustment to our deferred tax asset resulting from the identification of additional tax deductions related to certain bankruptcy-related costs incurred in prior periods.

As required by SEC rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. In making this evaluation, we considered matters relating to the restatement of our consolidated financial statements, including the related weaknesses in our internal control over financial reporting. After consideration of the matters discussed above, we have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Our management believes that the errors giving rise to the restatement of our financial results as reflected in our Form 10-K/A for the year ended December 31, 2003 and which will be reflected in our Form 10-Q/As for the quarters ended March 31, 2004 and June 30, 2004 related to the reporting of certain leases as operating leases, rather than financing obligations. These errors occurred because of variety of factors, including limited staffing, lack of communication between the accounting department and the real estate department on lease structure, and the complexity of guidance relating to both the accounting for leases where the lessee has significant involvement in the construction of the project. In reviewing these factors, we determined that a material weakness existed as of the end of the period covered by these amended reports.

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

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

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

fees, as well as compensatory and punitive damages in unspecified amounts. The motion to intervene was granted on November 23, 2004.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS EFFECTIVE 8/23/04.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

We purchase our beverage supplies from The Coca-Cola Company. Our current agreement with The Coca-Cola Company, which we entered into on January 1, 2004, will expire on December 31, 2008. Under the agreement, our beverage supply costs are established by The Coca-Cola Company from time to time. However, in the case of certain price increases, we may terminate the agreement upon 60 days notice. If beverage supply costs increase such that we terminate the agreement and subsequently we are unable to negotiate favorable terms with The Coca-Cola Company or a competing beverage supplier, our margins on concessions may be negatively impacted.

ITEM 6. EXHIBITS


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

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


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

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

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

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

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

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

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

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

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

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

11.1		Computation of per share earnings (provided in Note 9 to the Notes to Consolidated Financial Statements included in this report under the caption “Earnings Per Share”).

EXHIBIT INDEX


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

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

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

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

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

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

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

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

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


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

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

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

11.1		Computation of per share earnings (provided in Note 9 to the Notes to Consolidated Financial Statements included in this report under the caption “Earnings Per Share”).

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

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

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

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


		CARMIKE CINEMAS, INC.

Date: December 13, 2004	By:	/s/ Michael W. Patrick
		Michael W. Patrick
		President, Chief Executive Officer and Chairman of
		the Board of Directors (Duly Authorized Officer)
		(Principal Executive Officer)

Date: December 13, 2004	By:	/s/ Martin A. Durant
		Martin A. Durant
		Senior Vice President — Finance,
		Treasurer and Chief Financial Officer
		(Principal Financial Officer)

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