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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 AMENDMENT NO. 2
 FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
  þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year ended December 31, 2004
 OR
 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.
  Delaware
(State or Other Jurisdiction of Incorporation or Organization)
    
    58-1469127
(I.R.S. Employer Identification No.)
 1301 First Avenue, Columbus, Georgia
(Address of Principal Executive Offices)
    
    31901
(Zip Code)
 (706) 576-3400
  None
  common stock, par value $.03 per share
 þ o
 o
 þ o
 þ o
 o þ
  Documents Incorporated by Reference




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Table of Contents
 Page NumberEXPLANATORY NOTE
    
    
    3PART IITEM 1. BUSINESS
    
    
    4ITEM 2. PROPERTIES
    
    
    15ITEM 3. LEGAL PROCEEDINGS
    
    
    15ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    16PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    17ITEM 6. SELECTED FINANCIAL DATA
    
    
    17ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    19ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    32ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    33ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    67ITEM 9A. CONTROLS AND PROCEDURES
    
    
    68ITEM 9B. OTHER INFORMATION
    
    
    70*PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    70ITEM 11. EXECUTIVE COMPENSATION
    
    
    70ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    70ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    70ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    70PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    72EX-21 LIST OF SUBSIDIARIESEX-23.1 Consent of PricewaterhouseCoopers LLPEX-23.2 Consent of Ernst & Young LLPEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  
 *
    
    Incorporated by reference from Proxy Statement relating to the 2005 Annual Meeting of stockholders. 2




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EXPLANATORY NOTE
     3




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PART I
 
 ITEM 1. BUSINESS.
 Overview
   
    
    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,
2004, approximately 47% of our hourly employees worked for the federal minimum wage.
Additionally, we own 68, or approximately 24%, 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
approximately 78% 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.
  State
    
    Theatres
    
    Screens
    
    State
    
    Theatres
    
    ScreensAlabama
    
    
    17
    
    
    
    160
    
    
    New Mexico
    
    
    1
    
    
    
    2Arkansas
    
    
    8
    
    
    
    68
    
    
    New York
    
    
    1
    
    
    
    8Colorado
    
    
    8
    
    
    
    57
    
    
    North Carolina
    
    
    32
    
    
    
    278Delaware
    
    
    1
    
    
    
    14
    
    
    North Dakota
    
    
    6
    
    
    
    37Florida
    
    
    9
    
    
    
    78
    
    
    Ohio
    
    
    6
    
    
    
    39Georgia
    
    
    27
    
    
    
    223
    
    
    Oklahoma
    
    
    10
    
    
    
    52Idaho
    
    
    4
    
    
    
    17
    
    
    Oregon
    
    
    1
    
    
    
    12Illinois
    
    
    1
    
    
    
    2
    
    
    Pennsylvania
    
    
    24
    
    
    
    182Iowa
    
    
    8
    
    
    
    87
    
    
    South Carolina
    
    
    13
    
    
    
    94Kansas
    
    
    1
    
    
    
    12
    
    
    South Dakota
    
    
    5
    
    
    
    35Kentucky
    
    
    9
    
    
    
    45
    
    
    Tennessee
    
    
    27
    
    
    
    220Louisiana
    
    
    3
    
    
    
    22
    
    
    Texas
    
    
    12
    
    
    
    91Maryland
    
    
    1
    
    
    
    8
    
    
    Utah
    
    
    3
    
    
    
    39Michigan
    
    
    1
    
    
    
    5
    
    
    Virginia
    
    
    9
    
    
    
    65Minnesota
    
    
    6
    
    
    
    65
    
    
    Washington
    
    
    1
    
    
    
    12Missouri
    
    
    1
    
    
    
    8
    
    
    West Virginia
    
    
    4
    
    
    
    28Montana
    
    
    13
    
    
    
    74
    
    
    Wisconsin
    
    
    2
    
    
    
    18Nebraska
    
    
    5
    
    
    
    19
    
    
    Wyoming
    
    
    2
    
    
    
    12Totals
    
    
    282
    
    
    
    2,188
   4




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Theatre Development and Operations
 Development
  
    
    we believe building a new theatre provides an attractive cash flow opportunity;
    
    we already operate a theatre and could best protect that market by expanding our presence; or
    
    a film licensing zone is currently underserved by an exhibitor.
    AverageScreens/Theatres
    
    
    Screens
    
    
    TheatreTotal at January 1, 2002
    
    
    323
    
    
    
    2,333
    
    
    
    7.2New Construction
    
    
    0
    
    
    
    0Closures
    
    
    (15
    )
    
    
    (71
    )Total at December 31, 2002
    
    
    308
    
    
    
    2,262
    
    
    
    7.3New Construction
    
    
    2
    
    
    
    31Closures
    
    
    (11
    )
    
    
    (40
    )Total at December 31, 2003
    
    
    299
    
    
    
    2,253
    
    
    
    7.5New Construction
    
    
    3
    
    
    
    41Closures
    
    
    (20
    )
    
    
    (106
    )Total at December 31, 2004
    
    
    282
    
    
    
    2,188
    
    
    
    7.8
 Operations
   Box office admissions.
  5




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Concessions.
  .
 Other revenues.
 Film Licensing
   Industry
    
    
    
    
    
    Carmike Cinemas1.
    
    Shrek 2
    
    
    1.
    
    
    The Passion of the Christ2.
    
    Spider-Man 2
    
    
    2.
    
    
    Shrek 23.
    
    The Passion of the Christ
    
    
    3.
    
    
    Spider-Man 24.
    
    The Incredibles
    
    
    4.
    
    
    Harry Potter and the Prisoner of Azkaban5.
    
    Harry Potter and the Prisoner of Azkaban
    
    
    5.
    
    
    The Incredibles6.
    
    The Day After Tomorrow
    
    
    6.
    
    
    The Day After Tomorrow7.
    
    The Bourne Supremacy
    
    
    7.
    
    
    Shark Tale8
    
    Meet The Fockers
    
    
    8
    
    
    Meet The Fockers9.
    
    Shark Tale
    
    
    9.
    
    
    National Treasure10.
    
    The Polar Express
    
    
    10.
    
    
    The Polar Express
 Film Rental Fees
  6




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Film Licensing Zones
  Relationship With Distributors
   Management Information Systems
   Competition
     7




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Regulatory Environment
      Employees
  8




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Legal Proceedings
  Trademarks and Trade-Names
  Website Access
   Our Reorganization
      9




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Risk Factors
  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 substantial lease and debt obligations could impair our financial flexibility and our
competitive position.
  
    
    Our term loan credit agreement provides for borrowings of up to $100.0 million,
of which $99.0 million was outstanding as of December 31, 2004.
    
    Our revolving credit agreement provides for borrowings of up to $50.0 million.
There were no amounts outstanding as of December 31, 2004.
    
    Our 7.500% senior subordinated notes, issued as of February 4, 2004, total $150.0 million.
    
    Amounts owed on our industrial revenue bonds totaled $0.3 million at December 31, 2004.
    
    As of December 31, 2004, we estimate that our general unsecured creditors will
receive an aggregate of $1.3 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 December 31,
2004, total accrued interest on these claims was approximately $338,000. All of these claims
are disputed.
   
    
    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.
  10




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We may not generate sufficient cash flow to meet our needs.
  Our business is subject to significant competitive pressures.
     Our revenues vary significantly depending upon the timing of the motion picture releases by
distributors.
  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.
  We may be unable to fund our additional capital needs.
  11




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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.
   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 success depends on our ability to retain key personnel.
  12




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We face uncertainties related to digital cinema.
  A prolonged economic downturn could materially affect our business by reducing amounts consumers
spend on attending movies.
  Compliance with the Americans with Disabilities Act could require us to incur significant capital
expenditures and litigation costs in the future.
   We are subject to other federal, state and local laws which limit the manner in which we may
conduct our business.
  Disruption of our relationship with our primary concession suppliers could harm our margins on
concessions.
   13




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Our development of new theatres poses a number of risks.
   If we determine that assets are impaired, we will be required to recognize a charge to earnings.
   Our growth strategy includes acquisitions. We may not be able to identify suitable acquisition
candidates, complete acquisitions or integrate acquisitions successfully.
  Our business makes us vulnerable to future fears of terrorism.
  Our certificate of incorporation and bylaws contain provisions that make it more difficult to
effect a change in control of the Company.
  14




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ITEM 2. PROPERTIES.
    
 ITEM 3. LEGAL PROCEEDINGS.
     15




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  EXECUTIVE OFFICERS OF THE REGISTRANT
  Name
    
    Age
    
    TitleMichael W. Patrick
    
    
    54
    
    
    President, Chief Executive Officer and Chairman of the Board of DirectorsFred W. Van Noy
    
    
    48
    
    
    Senior Vice President, Chief Operating Officer and DirectorMartin A. Durant
    
    
    56
    
    
    Senior Vice President  Finance, Treasurer and Chief Financial OfficerAnthony J. Rhead
    
    
    63
    
    
    Senior Vice President  Film and SecretaryH. Madison Shirley
    
    
    53
    
    
    Senior Vice President  Concessions and Assistant SecretaryGary F. Krannacker
    
    
    42
    
    
    Vice President, General Manager Theatre OperationsPhilip A. Smitley
    
    
    46
    
    
    Assistant Vice President and Controller
 Michael W. Patrick
 Fred W. Van Noy
 Martin A. Durant
 Anthony J. Rhead
 H. Madison Shirley
 Gary F. Krannacker
 Philip A. Smitley
  16




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.  2004
    
    High
    
    
    LowFourth Quarter
    
    $
    39.01
    
    
    $
    34.90Third Quarter
    
    
    39.00
    
    
    
    32.68Second Quarter
    
    
    41.84
    
    
    
    33.80First Quarter
    
    
    38.95
    
    
    
    31.29
 2003
    
    High
    
    
    LowFourth Quarter
    
    $
    36.53
    
    
    $
    26.25Third Quarter
    
    
    27.44
    
    
    
    20.76Second Quarter
    
    
    23.66
    
    
    
    19.30First Quarter
    
    
    23.14
    
    
    
    18.58
    
 ITEM 6. SELECTED FINANCIAL DATA.
    17




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For the Year Ended December 31,2000(1)
    
    
    2001 (1)
    
    
    2002 (1)
    
    
    2003 (8)
    
    
    2004 (8)(as restated)
    
    (as restated)(in millions except per share and operating data)Statement of Operations Data:Revenues:Admissions
    
    $
    315.4
    
    
    $
    311.8
    
    
    $
    342.8
    
    
    $
    332.1
    
    
    $
    331.5Concessions and other (2)
    
    
    143.9
    
    
    
    145.1
    
    
    
    163.6
    
    
    
    161.0
    
    
    
    163.0Total revenues (2)
    
    
    459.3
    
    
    
    457.0
    
    
    
    506.5
    
    
    
    493.1
    
    
    
    494.5Costs and expenses:Film exhibition costs
    
    
    185.2
    
    
    
    171.2
    
    
    
    189.3
    
    
    
    180.4
    
    
    
    174.5Concession costs
    
    
    21.0
    
    
    
    20.2
    
    
    
    19.2
    
    
    
    18.0
    
    
    
    16.9Other theatre operating costs
    
    
    192.7
    
    
    
    177.8
    
    
    
    178.4
    
    
    
    176.8
    
    
    
    179.1General and administrative expenses
    
    
    6.9
    
    
    
    8.8
    
    
    
    15.0
    
    
    
    15.3
    
    
    
    19.3Depreciation and amortization expenses (3)
    
    
    43.5
    
    
    
    42.7
    
    
    
    33.7
    
    
    
    32.8
    
    
    
    33.8Impairment of long-lived assets (4)
    
    
    21.3
    
    
    
    118.8
    
    
    
    
    
    
    
    1.1
    
    
    
    0.9Gain on sales of property and equipment (2)
    
    
    (3.0
    )
    
    
    
    
    
    
    (0.7
    )
    
    
    (3.0
    )
    
    
    (1.1
    )Total costs and expenses
    
    
    467.5
    
    
    
    539.6
    
    
    
    434.9
    
    
    
    421.4
    
    
    
    423.4Operating income (loss)
    
    
    (8.2
    )
    
    
    (82.6
    )
    
    
    71.6
    
    
    
    71.7
    
    
    
    71.1Interest expense
    
    
    32.4
    
    
    
    9.1
    
    
    
    105.5
    
    
    
    42.9
    
    
    
    26.1Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9.3Income (loss) before reorganization costs and income taxes
    
    
    (40.7
    )
    
    
    (91.7
    )
    
    
    (33.9
    )
    
    
    28.8
    
    
    
    35.6Reorganization costs
    
    
    7.0
    
    
    
    19.5
    
    
    
    20.5
    
    
    
    (4.1
    )
    
    
    (12.4
    )Income (loss) before income taxes
    
    
    (47.7
    )
    
    
    (111.2
    )
    
    
    (54.5
    )
    
    
    32.9
    
    
    
    48.0Income tax expense (benefit)
    
    
    25.5
    
    
    
    
    
    
    
    (14.7
    )
    
    
    (71.1
    )
    
    
    19.6Net income (loss)
    
    
    (73.2
    )
    
    
    (111.2
    )
    
    
    (39.8
    )
    
    
    104.0
    
    
    
    28.4Preferred stock dividends
    
    
    1.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss) available to common stockholders
    
    $
    (74.7
    )
    
    $
    (111.2
    )
    
    $
    (39.8
    )
    
    $
    104.0
    
    
    $
    28.4Weighted average common shares outstanding (in thousands):Basic
    
    
    11,344
    
    
    
    11,344
    
    
    
    9,195
    
    
    
    8,991
    
    
    
    11,704Diluted
    
    
    11,344
    
    
    
    11,344
    
    
    
    9,195
    
    
    
    9,448
    
    
    
    12,480Earnings (loss) per common share:Basic
    
    $
    (6.59
    )
    
    $
    (9.80
    )
    
    $
    (4.32
    )
    
    $
    11.57
    
    
    $
    2.43Diluted
    
    $
    (6.59
    )
    
    $
    (9.80
    )
    
    $
    (4.32
    )
    
    $
    11.01
    
    
    $
    2.28Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.525Balance Sheet Data:Cash and cash equivalents
    
    $
    52.5
    
    
    $
    94.2
    
    
    $
    53.5
    
    
    $
    41.2
    
    
    $
    56.9Property and equipment, net (4)
    
    
    640.3
    
    
    
    491.6
    
    
    
    475.2
    
    
    
    460.3
    
    
    
    469.5Total assets
    
    
    774.7
    
    
    
    651.3
    
    
    
    583.6
    
    
    
    632.2
    
    
    
    640.0Total debt (5)
    
    
    65.0
    
    
    
    68.3
    
    
    
    431.0
    
    
    
    393.1
    
    
    
    323.4Liabilities subject to compromise
    
    
    529.2
    
    
    
    508.1
    
    
    
    37.4
    
    
    
    21.5
    
    
    
    1.3Retained earnings (deficit)
    
    
    (29.7
    )
    
    
    (141.3
    )
    
    
    (180.7
    )
    
    
    (76.7
    )
    
    
    (54.6
    )Total stockholders equity
    
    $
    129.5
    
    
    $
    18.0
    
    
    $
    27.8
    
    
    $
    137.8
    
    
    $
    254.7Other Financial Data:Net cash provided by (used in) operating activities
    
    $
    26.1
    
    
    $
    50.7
    
    
    $
    16.2
    
    
    $
    53.3
    
    
    $
    59.4Net cash provided by (used in) investing activities
    
    $
    (15.6
    )
    
    $
    (1.0
    )
    
    $
    (14.6
    )
    
    $
    (12.2
    )
    
    $
    (35.4
    )Net cash provided by (used in) financing activities
    
    $
    46.3
    
    
    $
    (8.0
    )
    
    $
    (42.4
    )
    
    $
    (53.3
    )
    
    $
    (8.3
    )Capital expenditures
    
    $
    44.9
    
    
    $
    9.2
    
    
    $
    18.1
    
    
    $
    18.9
    
    
    $
    38.6Operating Data:Theatres at period end (6)
    
    
    352
    
    
    
    323
    
    
    
    308
    
    
    
    299
    
    
    
    282Screens at period end (6)
    
    
    2,438
    
    
    
    2,333
    
    
    
    2,262
    
    
    
    2,253
    
    
    
    2,188Average screens in operation
    
    
    2,643
    
    
    
    2,386
    
    
    
    2,274
    
    
    
    2,252
    
    
    
    2,207Average screens per theatre
    
    
    6.9
    
    
    
    7.2
    
    
    
    7.3
    
    
    
    7.5
    
    
    
    7.8Total attendance (in thousands)
    
    
    67,804
    
    
    
    64,621
    
    
    
    69,997
    
    
    
    67,189
    
    
    
    63,260Average ticket price
    
    $
    4.65
    
    
    $
    4.83
    
    
    $
    4.90
    
    
    $
    4.93
    
    
    $
    5.17Average concession sales per patron
    
    $
    1.98
    
    
    $
    2.10
    
    
    $
    2.17
    
    
    $
    2.18
    
    
    $
    2.33
 
 (1)
    
    See notes 1, 2 and 3 of the notes to our audited annual consolidated financial statements
with respect to our bankruptcy and financial reporting in accordance with Statement of
Position 90-7. See note 2 of notes to audited annual consolidated financial statements with
respect to reorganization costs incurred while in bankruptcy. See note 11 of the notes to our
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, 2000, 2001 and 2002
as filed with the SEC, was previously reported in concessions and other revenues. It has been
reclassed in the foregoing table.(3)
    
    Goodwill amortization of $1.5 million is included for the years ended December 31, 2000 and
2001.(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)
    
    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. 18




---



##### Table of Contents



(6)
    
    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.(7)
    
    Due to rounding, certain amounts do not total properly.(8)
    
    See Note 18- Notes to consolidated financial statements for information about the
restatements. 
 ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Restatements
    Results of Operations
 Financial Reporting During Reorganization
 Financial Reporting by Entities in Reorganization under the Bankruptcy
Code,
 Seasonality
  19




---



##### Table of Contents



Revenues
  Expenses
     Net Operating Losses
    Operating Statement Information
  Restated For the Year EndedDecember 31,2004
    
    
    2003
    
    
    2002(restated)(3)
    
    
    (restated) (3)Revenues:Admissions
    
    
    67.0
    %
    
    
    67.3
    %
    
    
    67.6
    %Concessions and other
    
    
    33.0
    
    
    
    32.7
    
    
    
    32.4Total revenues
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Costs and expenses:Film exhibition costs (1)(2)
    
    
    52.6
    %
    
    
    54.3
    %
    
    
    55.2
    %Concessions costs (2)
    
    
    10.4
    
    
    
    11.2
    
    
    
    11.8Other theatre operating costs
    
    
    36.2
    
    
    
    35.9
    
    
    
    35.2
 20




---



##### Table of Contents



Restated For the Year EndedDecember 31,2004
    
    
    2003
    
    
    2002(restated)(3)
    
    
    (restated) (3)General and administrative
    
    
    3.9
    
    
    
    3.1
    
    
    
    3.0Depreciation
    
    
    6.8
    
    
    
    6.6
    
    
    
    6.7Gain on sales of property and equipment
    
    
    (0.2
    )
    
    
    (0.6
    )
    
    
    (0.1
    )Impairment of long-lived assets
    
    
    0.2
    
    
    
    0.2
    
    
    
    Total costs and expenses
    
    
    85.6
    
    
    
    85.5
    
    
    
    85.9Operating income (loss)
    
    
    14.4
    
    
    
    14.5
    
    
    
    14.1Interest expense
    
    
    5.3
    
    
    
    8.7
    
    
    
    20.8Loss on extinguishment of debt
    
    
    1.9
    
    
    
    
    
    
    
    Income (loss) before reorganization costs and income taxes
    
    
    7.2
    
    
    
    5.8
    
    
    
    (6.7
    )Reorganization costs
    
    
    (2.5
    )
    
    
    (0.8
    )
    
    
    4.1Income (loss) before income taxes
    
    
    9.7
    
    
    
    6.7
    
    
    
    (10.8
    )Income tax expense (benefit)
    
    
    4.0
    
    
    
    (14.4
    )
    
    
    (2.9
    )5.7
    %
    
    
    21.1
    %
    
    
    (7.9
    )%
 
 (1)
    
    Film exhibition costs include advertising expenses net of co-op reimbursements.(2)
    
    All costs are expressed as a percentage of total revenues, except film exhibition costs,
which are expressed as a percentage of admissions revenues, and concession costs, which are
expressed as a percentage of concession and other revenues.(3)
    
    For additional information about the restatements, please see Note 18  Notes to
Consolidated Financial Statements. 21




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##### Table of Contents



Year Ended December 31, 2004 Compared to Year Ended December 31, 2003
 Revenues
  For Years ended December 312004
    
    
    2003Average theatres
    
    
    288
    
    
    
    303Average screens
    
    
    2,207
    
    
    
    2,252Average attendance per screen
    
    
    28,661
    
    
    
    29,830Average admission price (1)
    
    $
    5.17
    
    
    $
    4.93Average concession price (1)
    
    $
    2.33
    
    
    $
    2.18Total attendance (in thousands)
    
    
    63,260
    
    
    
    67,189Total revenues (in thousands)
    
    $
    494,475
    
    
    $
    493,085
 
    Cost of operations
  For the years ended December 31% varianceFavorable(in thousands)
    
    2004
    
    
    2003
    
    
    (Unfavorable)Film exhibition costs
    
    $
    174,473
    
    
    $
    180,403
    
    
    
    3.3
    %Concession costs
    
    $
    16,881
    
    
    $
    17,985
    
    
    
    6.1
    %Other theatre operating costs
    
    $
    179,127
    
    
    $
    176,781
    
    
    
    (1.3
    %)General and administrative expenses
    
    $
    19,302
    
    
    $
    15,335
    
    
    
    (25.9
    %)Depreciation expenses
    
    $
    33,801
    
    
    $
    32,764
    
    
    
    (3.2
    %)(Gain) on sales of property and equipment
    
    $
    (1,051
    )
    
    $
    (3,023
    )
    
    
    (65.2
    %)Impairment of long-lived assets
    
    $
    892
    
    
    $
    1,148
    
    
    
    22.3
    %
    22




---



##### Table of Contents



Operating Income.
 Interest expense
 Loss on extinguishment of debt.
 Reorganization costs
 Income tax expense
 Year Ended December 31, 2003 Compared to Year Ended December 31, 2002
 Revenues
  For Years ended December 312003
    
    
    2002Average theatres
    
    
    303
    
    
    
    311Average screens
    
    
    2,252
    
    
    
    2,274Average attendance per screen
    
    
    29,830
    
    
    
    30,784Average admission price
    
    $
    4.93
    
    
    $
    4.90Average concession price
    
    $
    2.18
    
    
    $
    2.17Total attendance (in thousands)
    
    
    67,189
    
    
    
    69,997Total revenues (in thousands)
    
    $
    493,085
    
    
    $
    506,507
  23




---



##### Table of Contents



Cost of operations
  For the years ended December 31% varianceFavorable(in thousands)
    
    2003
    
    
    2002
    
    
    (Unfavorable)Film exhibition costs
    
    $
    180,403
    
    
    $
    189,265
    
    
    
    4.7
    %Concession costs
    
    $
    17,985
    
    
    $
    19,233
    
    
    
    6.5
    %Other theatre operating costs
    
    $
    176,781
    
    
    $
    178,376
    
    
    
    0.9
    %General and administrative expenses
    
    $
    15,335
    
    
    $
    14,983
    
    
    
    (2.3
    %)Depreciation and amortization expenses
    
    $
    32,764
    
    
    $
    33,738
    
    
    
    2.9
    %(Gain)/loss on sales of property and equipment
    
    $
    (3,023
    )
    
    $
    (681
    )
    
    
    343.9
    %Impairment of long-lived assets
    
    $
    1,148
    
    
    $
    
    
    
    
    n/a
       Operating Income.
 Interest expense
 Reorganization costs
 Income tax expense (benefit)
 24




---



##### Table of Contents



Liquidity and Capital Resources
 General
        25




---



##### Table of Contents



Material Credit Agreements and Covenant Compliance
  Revolving Credit Facility
   
    
    pay dividends or make any other restricted payments;
    
    create liens on our assets;
    
    make certain investments;
    
    dispose of interests in our subsidiaries;
    
    consolidate, merge, transfer or sell assets or acquire properties or businesses;
    
    enter into transactions with our affiliates; and
    
    engage in any sale-leaseback or similar transaction involving any of our assets.
     26




---



##### Table of Contents



Term Loan Facility
   
    
    pay dividends or make any other restricted payments;
    
    create liens on our assets;
    
    make certain investments;
    
    dispose of interests in our subsidiaries;
    
    consolidate, merge, transfer or sell assets or acquire properties or businesses;
    
    enter into transactions with our affiliates; and
    
    engage in any sale-leaseback or similar transaction involving any of our assets.
     7.500% Senior Subordinated Notes
   
    
    make restricted payments;
    
    create liens on our assets;
    
    consolidate, merge or otherwise transfer or sell all or substantially all of our assets;
 27




---



##### Table of Contents




    
    engage in certain sales of less than all or substantially all of our assets;
    
    incur additional indebtedness;
    
    issue certain types of stock; and
    
    enter into transactions with affiliates.
      Contractual Obligations
  Payments Due by Period (in thousands)One Year
    
    
    
    
    
    
    
    
    
    
    After 5or Less
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    Years
    
    
    TotalTerm loan credit agreement (1)
    
    $
    1,000
    
    
    $
    2,000
    
    
    $
    96,000
    
    
    $
    
    
    
    $
    99,000Revolving credit agreement (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.500% senior subordinated notes (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    150,000Long-term interest payments
    
    
    17,061
    
    
    
    33,947
    
    
    
    28,600
    
    
    
    46,046
    
    
    
    125,654General unsecured creditors
    
    
    
    
    
    
    1,348
    
    
    
    
    
    
    
    
    
    
    
    1,348Industrial revenue bond
    
    
    315
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315Long-term financing obligations (4)
    
    
    5,328
    
    
    
    10,656
    
    
    
    10,656
    
    
    
    57,758
    
    
    
    84,398Capital lease obligations
    
    
    6,756
    
    
    
    13,268
    
    
    
    13,228
    
    
    
    64,646
    
    
    
    97,898Operating leases (5)
    
    
    40,304
    
    
    
    74,915
    
    
    
    68,971
    
    
    
    306,352
    
    
    
    490,542Employment agreement with Chief Executive Officer (6)
    
    
    850
    
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    1,771Total contractual cash obligations
    
    $
    71,614
    
    
    $
    137,055
    
    
    $
    217,455
    
    
    $
    624,802
    
    
    $
    1,050,926
 
 (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.(3)
    
    The maturity date for the 7.500% senior subordinated notes is February 15, 2014.(4)
    
    Long-term financing obligations excludes $19.0 million related to non-cash financing
obligations offset by long-term financing assets.(5)
    
    Within the operating leases is a commitment to enter into a transaction that will be
accounted for as a financing obligation in the amount of $6.3 million. The Company is required
to make payments on this lease prior to the closing of the financing. 28




---



##### Table of Contents



(6)
    
    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. Off-Balance Sheet Arrangements
  Asset Impairments
   in millions( except number of theatres and screens)
    
    2004
    
    
    2003Annual impairment charge included in operations
    
    $
    0.9
    
    
    $
    1.1Reduction in carrying values
    
    
    4.0
    
    
    
    3.0Reduction in accumulated depreciation and amortization expenses
    
    $
    (3.1
    )
    
    $
    (1.9
    )Number of theatres affected
    
    
    9
    
    
    
    4Number of screens affected
    
    
    30
    
    
    
    27
  Critical Accounting Policies
   Property and Equipment
   Building and improvements
    
    20-30 yearsLeasehold improvements*
    
    15-30 yearsLeasehold interests*
    
    15-30 yearsCapital leases*
    
    15-30 yearsLong-term financing assets
    
    30 yearsEquipment
    
    5-15 years
 
 *
    
    Number of years is based on the terms of the applicable lease 29




---



##### Table of Contents



Impairment of Long-lived Assets, Including Goodwill
  Accounting for the Impairment or Disposal of Long-Lived Assets
  Bankruptcy Matters
  Leases
  30




---



##### Table of Contents



Percentage Rent
  Financing Obligations
  Income Taxes
   Impact of Recently Issued Accounting Standards
    Recent Developments
  Information About Forward-Looking Statements
  31




---



##### Table of Contents




    
    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.
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   32




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##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting FirmReport of Ernst & Young LLP, Independent Registered Public Accounting FirmConsolidated Balance SheetsConsolidated Statements of OperationsConsolidated Statements of Cash FlowsConsolidated Statements of Stockholders EquityNotes to Consolidated Financial Statements
 33




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
   Consolidated financial statements
   Internal control over financial reporting
 Internal Control-Integrated Framework
    34




---



##### Table of Contents



Internal Control-Integrated Framework Internal Control-Integrated Framework
  
  35




---



##### Table of Contents



Report Of Independent Registered Public Accounting Firm
 
    Goodwill and Other Intangible Assets
    36




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except for share data)
 December 31,2004
    
    
    2003(restated)
    
    
    (restated)Assets:Current assets:Cash and cash equivalents
    
    $
    56,944
    
    
    $
    41,236Accounts and notes receivable
    
    
    1,464
    
    
    
    2,061Inventories
    
    
    1,459
    
    
    
    1,577Prepaid expenses
    
    
    6,252
    
    
    
    6,956Total current assets
    
    
    66,119
    
    
    
    51,830Other assets:Investment in and advances to partnerships
    
    
    2,092
    
    
    
    6,952Deferred income tax asset
    
    
    50,601
    
    
    
    69,635Assets held for sale
    
    
    6,534
    
    
    
    8,932Other
    
    
    21,027
    
    
    
    11,189Total other assets
    
    
    80,254
    
    
    
    96,708Property and equipment:Land
    
    
    47,639
    
    
    
    44,561Construction in progress
    
    
    19,696
    
    
    
    8,362Building and improvements
    
    
    149,503
    
    
    
    143,924Leasehold improvements
    
    
    215,263
    
    
    
    214,251Leasehold interest
    
    
    5,531
    
    
    
    5,841Capital leases and long-term financing assets
    
    
    72,841
    
    
    
    66,641Equipment
    
    
    198,092
    
    
    
    185,413Total property and equipment
    
    
    708,565
    
    
    
    668,993Accumulated depreciation
    
    
    (238,437
    )
    
    
    (208,670
    )Property and equipment, net of accumulated depreciation
    
    
    470,128
    
    
    
    460,323Goodwill, net of accumulated amortization
    
    
    23,354
    
    
    
    23,354Total assets
    
    $
    639,855
    
    
    $
    632,215Liabilities and stockholders equity:Current liabilities:Accounts payable
    
    $
    22,710
    
    
    $
    27,362Dividends payable
    
    
    2,128
    
    
    
    Accrued expenses
    
    
    35,582
    
    
    
    44,413Current maturities of long-term indebtedness, capital leases and long-term financing obligations
    
    
    2,872
    
    
    
    2,162Total current liabilities
    
    
    63,292
    
    
    
    73,937Long-term liabilities:Long-term debt, less current maturities
    
    
    248,000
    
    
    
    323,050Capital lease and long-term financing obligations, less current maturities
    
    
    72,530
    
    
    
    67,889Long-term trade payables, less current maturities
    
    
    
    
    
    
    7,988320,530
    
    
    
    398,927Liabilities Subject to Compromise
    
    
    1,348
    
    
    
    21,521Stockholders equity:Preferred stock, $1.00 par value, authorized 1,000,000 shares, none outstanding at December 31,
2004 and 2003
    
    
    
    
    
    
    Common stock, $0.03 par value, authorized 20,000,000 shares, issued and outstanding 12,162,622
shares and 9,148,012 shares at December 31, 2004 and 2003, respectively.
    
    
    365
    
    
    
    275Paid-in capital
    
    
    308,990
    
    
    
    214,270Accumulated deficit
    
    
    (54,670
    )
    
    
    (76,715
    )254,685
    
    
    
    137,830Total liabilities and stockholders equity
    
    $
    639,855
    
    
    $
    632,215
 See accompanying notes.
 37




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except per share data)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(restated)
    
    
    (restated)Revenues:Admissions
    
    $
    331,479
    
    
    $
    332,070
    
    
    $
    342,839Concessions and other
    
    
    162,996
    
    
    
    161,015
    
    
    
    163,668494,475
    
    
    
    493,085
    
    
    
    506,507Costs and expenses:Film exhibition costs
    
    
    174,473
    
    
    
    180,403
    
    
    
    189,265Concession costs
    
    
    16,881
    
    
    
    17,985
    
    
    
    19,233Other theatre operating costs
    
    
    179,127
    
    
    
    176,781
    
    
    
    178,376General and administrative expenses
    
    
    19,302
    
    
    
    15,335
    
    
    
    14,983Depreciation expenses
    
    
    33,801
    
    
    
    32,764
    
    
    
    33,738Gain on sales of property and equipment
    
    
    (1,051
    )
    
    
    (3,023
    )
    
    
    (681
    )Impairment charge of long-lived assets
    
    
    892
    
    
    
    1,148
    
    
    
    423,425
    
    
    
    421,393
    
    
    
    434,914Operating income
    
    
    71,050
    
    
    
    71,692
    
    
    
    71,593Interest expense (Contractual interest was $50,215 for the year ended December 31, 2002)
    
    
    26,104
    
    
    
    42,874
    
    
    
    105,520Loss on extinguishment of debt
    
    
    9,313
    
    
    
    
    
    
    
    Income (loss) before reorganization costs and income taxes
    
    
    35,633
    
    
    
    28,818
    
    
    
    (33,927
    )Reorganization costs (benefits)
    
    
    (12,397
    )
    
    
    (4,109
    )
    
    
    20,547Income (loss) before income taxes
    
    
    48,030
    
    
    
    32,927
    
    
    
    (54,474
    )Income tax expense (benefit)
    
    
    19,603
    
    
    
    (71,062
    )
    
    
    (14,706
    )Net income (loss) available for common stockholders
    
    $
    28,427
    
    
    $
    103,989
    
    
    $
    (39,768
    )Weighted average shares outstanding:Basic
    
    
    11,704
    
    
    
    8,991
    
    
    
    9,195Diluted
    
    
    12,480
    
    
    
    9,448
    
    
    
    9,195Income (loss) per common share:Basic
    
    $
    2.43
    
    
    $
    11.57
    
    
    $
    (4.32
    )Diluted
    
    $
    2.28
    
    
    $
    11.01
    
    
    $
    (4.32
    )Dividends declared
    
    $
    .53
    
    
    $
    
    
    
    $
    
 See accompanying notes.
 38




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands)
 Years Ended December 31,2004
    
    
    2003
    
    
    2002(restated)
    
    
    (restated)Operating activitiesNet income (loss)
    
    $
    28,427
    
    
    $
    103,989
    
    
    $
    (39,768
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization
    
    
    33,801
    
    
    
    32,764
    
    
    
    33,738Interest expense
    
    
    1,693
    
    
    
    668
    
    
    
    Impairment charge
    
    
    892
    
    
    
    1,148
    
    
    
    Deferred income taxes
    
    
    19,004
    
    
    
    (71,562
    )
    
    
    Non-cash deferred compensation
    
    
    5,757
    
    
    
    6,023
    
    
    
    3,614Non-cash reorganization items
    
    
    (12,552
    )
    
    
    (5,940
    )
    
    
    13,528Gain on sales of property and equipment
    
    
    (1,051
    )
    
    
    (3,023
    )
    
    
    (681
    )Changes in operating assets and liabilities:Accounts and notes receivable and inventories
    
    
    715
    
    
    
    (111
    )
    
    
    (427
    )Prepaid expenses and other assets
    
    
    (11,720
    )
    
    
    (6,043
    )
    
    
    9,697Accounts payable
    
    
    (4,760
    )
    
    
    (4,584
    )
    
    
    5,420Accrued expenses and other liabilities
    
    
    (809
    )
    
    
    (66
    )
    
    
    (8,849
    )Net cash provided by operating activities
    
    
    59,397
    
    
    
    53,263
    
    
    
    16,272Investing activitiesPurchases of property and equipment
    
    
    (38,644
    )
    
    
    (18,928
    )
    
    
    (18,068
    )Proceeds from sale of property and equipment
    
    
    4,577
    
    
    
    6,722
    
    
    
    3,475Acquisition of partnership
    
    
    (1,333
    )
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (35,400
    )
    
    
    (12,206
    )
    
    
    (14,593
    )Financing activitiesConsolidated Debt:Additional borrowing, net of debt issuance costs
    
    
    250,263
    
    
    
    
    
    
    
    21,705Repayments of long-term debt (including prepayment penalties)
    
    
    (341,894
    )
    
    
    (50,754
    )
    
    
    (64,061
    )Repayments of capital lease and long-term financing obligations
    
    
    (1,455
    )
    
    
    (1,395
    )
    
    
    (1,470
    )Prepaid financing costs
    
    
    
    
    
    
    (1,163
    )
    
    
    (1,163
    )Issuance of common stock
    
    
    89,052
    
    
    
    
    
    
    
    Dividends paid
    
    
    (4,255
    )
    
    
    
    
    
    
    Proceeds from long-term financing obligations
    
    
    
    
    
    
    
    
    
    
    2,614Net cash used in financing activities
    
    
    (8,289
    )
    
    
    (53,312
    )
    
    
    (42,375
    )Increase (decrease) in cash and cash equivalents
    
    
    15,708
    
    
    
    (12,255
    )
    
    
    (40,696
    )Cash and cash equivalents at beginning of year
    
    
    41,236
    
    
    
    53,491
    
    
    
    94,187Cash and cash equivalents at end of year
    
    $
    56,944
    
    
    $
    41,236
    
    
    $
    53,491
 See accompanying notes.
 39




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##### Table of Contents



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands)
 Series A CumulativeConvertible Exchangeable
    
    
    Class A commonPreferred stock
    
    
    StockShares
    
    
    Amount
    
    
    Shares
    
    
    AmountBalance at January 1, 2002
    
    
    550
    
    
    
    550
    
    
    
    10,018
    
    
    
    301Emergence from bankruptcy
    
    
    (550
    )
    
    
    (550
    )
    
    
    (10,018
    )
    
    
    (301
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock issuance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2004
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 See accompanying notes.
 40




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##### Table of Contents



Class B common stock
    
    
    Treasury stock
    
    
    New common stock
    
    
    
    
    
    
    Retained Earnings
    
    
    TotalShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Paid-in CapitalBalance at January 1, 2002
    
    
    1,371
    
    
    
    41
    
    
    
    (45
    )
    
    
    (441
    )
    
    
    
    
    
    
    
    
    
    
    158,771
    
    
    
    (140,936
    )
    
    
    18,286Emergence from bankruptcy
    
    
    (1,371
    )
    
    
    (41
    )
    
    
    45
    
    
    
    441
    
    
    
    8,991
    
    
    
    270
    
    
    
    45,866
    
    
    
    
    
    
    
    45,685Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,768
    )
    
    
    (39,768
    )Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    3
    
    
    
    3,612
    
    
    
    
    
    
    
    3,615Balance at December 31, 2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,088
    
    
    
    273
    
    
    
    208,249
    
    
    
    (180,704
    )
    
    
    27,818Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103,989
    
    
    
    103,989Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    2
    
    
    
    6,021
    
    
    
    
    
    
    
    6,023Balance at December 31, 2003
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,148
    
    
    
    275
    
    
    
    214,270
    
    
    
    (76,715
    )
    
    
    137,830Stock issuance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,015
    
    
    
    90
    
    
    
    88,963
    
    
    
    
    
    
    
    89,053Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,427
    
    
    
    28,427Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,382
    )
    
    
    (6,382
    )Deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,757
    
    
    
    
    
    
    
    5,757Balance at December 31, 2004
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    12,163
    
    
    $
    365
    
    
    $
    308,990
    
    
    $
    (54,670
    )
    
    $
    254,685
 See accompanying notes.
 41




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CARMIKE CINEMAS, INC. and SUBSIDIARIES
December 31, 2004
 NOTE 1  SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
 Financial
Reporting by Entities in Reorganization under the Bankruptcy Code,
  Description of Business
  Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Debt Issuance Costs
  Inventories
  42




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##### Table of Contents



Investments in Unconsolidated Affiliates
 Accounting for Certain Investments in Debt and Equity
Securities
  Property and Equipment
  Building and improvements
    
    20-30 yearsLeasehold improvements*
    
    15-30 yearsLeasehold interests*
    
    15-30 yearsCapital leases*
    
    15-30 yearsLong-term financing assets
    
    30 yearsEquipment
    
    5-15 years
 
 *
    
    Number of years is based on the shorter of estimated useful
life or the term of the applicable lease  Goodwill
  Assets Held for Sale
  Deferred Revenue
  43




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##### Table of Contents



Impairment of Property and Equipment
   Income Taxes
  Advertising
  Stock Based Compensation
  Accounting for stock Issued to Employees
  44




---



##### Table of Contents



2004
    
    
    2003
    
    
    2002Expected life (years)
    
    
    9.0
    
    
    
    9.0
    
    
    
    9.0Risk-free interest rate
    
    
    4.34
    %
    
    
    4.34
    %
    
    
    4.19
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility
    
    
    0.40
    
    
    
    0.40
    
    
    
    0.40
  2004
    
    
    2003
    
    
    2002(restated)
    
    
    (restated)Net income (loss):As reported
    
    
    28,427
    
    
    $
    103,989
    
    
    $
    (39,768
    )Plus: expense recorded on deferred stock compensation, net of related tax effects
    
    
    3,408
    
    
    
    3,764
    
    
    
    2,304Deduct: Total stock-based employee compensation expense determined under fair
value based method for all awards, net of related tax effects
    
    
    (3,551
    )
    
    
    (2,983
    )
    
    
    (2,720
    )Pro forma  for SFAS No. 123
    
    $
    28,284
    
    
    $
    104,770
    
    
    $
    (40,184
    )Basic net earnings (loss) per share:As reported
    
    $
    2.43
    
    
    $
    11.57
    
    
    $
    (4.32
    )Pro forma  for SFAS No. 123
    
    $
    2.42
    
    
    $
    11.65
    
    
    $
    (4.37
    )Diluted net earnings (loss) per share:As reported
    
    $
    2.28
    
    
    $
    11.01
    
    
    $
    (4.32
    )Pro forma  for SFAS No. 123
    
    $
    2.27
    
    
    $
    11.09
    
    
    $
    (4.37
    )
 Earnings Per Share
  For Year Ended December 31,2004
    
    
    2003
    
    
    2002(in 000s except per share data)
    
    (restated)
    
    
    (restated)Weighted average shares outstanding
    
    
    11,863
    
    
    
    9,150
    
    
    
    9,292Less
restricted stock issued
    
    
    (159
    )
    
    
    (159
    )
    
    
    (97
    )11,704
    
    
    
    8,991
    
    
    
    9,195Dilutive Shares:Restricted stock
    
    
    139
    
    
    
    66
    
    
    
    Stock grants
    
    
    594
    
    
    
    378
    
    
    
    Stock options
    
    
    43
    
    
    
    13
    
    
    
    12,480
    
    
    
    9,448
    
    
    
    9,195Earnings per share:Basic
    
    $
    2.43
    
    
    $
    11.57
    
    
    $
    (4.32
    )Diluted
    
    $
    2.28
    
    
    $
    11.01
    
    
    $
    (4.32
    )
 Leases
  45




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##### Table of Contents



Financing Obligations
  Derivatives
  Benefit Plans
  Reclassifications
  Recent Accounting Pronouncements
    46




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##### Table of Contents



NOTE 2  PROCEEDINGS UNDER CHAPTER 11
        47




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##### Table of Contents




    
    The plan of reorganization provided for the issuance or reservation for future
issuance of ten million (10,000,000) shares of reorganized Carmike common stock in the
aggregate.
    
    The holders of Carmikes cancelled Class A and Class B common stock received in
the aggregate 22.2% (2,211,261) of the ten million (10,000,000) shares of reorganized
Carmike common stock.
    
    The holders of Carmikes cancelled Series A preferred stock received in the
aggregate 41.2% (4,120,000) of the ten million (10,000,000) shares of reorganized Carmike
common stock.
    
    Certain holders of $45,685,000 in aggregate principal amount of the cancelled 9
3/8% Senior Subordinated Notes due 2009 issued by Carmike prior to the Chapter 11 Cases (the
Original Senior Subordinated Notes) received in the aggregate 26.6% (2,660,001) of the ten
million (10,000,000) shares of reorganized Carmike common stock.
    
    Carmike reserved one million (1,000,000) shares of the reorganized Carmike
common stock for issuance under the 2002 stock Plan. Under the 2002 stock Plan, 780,000 have
been authorized for issuance to Michael W. Patrick pursuant to his employment agreement and
220,000 shares have been authorized for issuance to seven other members of senior
management.
    
    The holders of Bank Claims in the Chapter 11 Cases received Bank Debt and cash
in the amount of approximately $35 million plus accrued and unpaid post-petition interest on
the Bank Claims from January 15, 2002 to the Reorganization Date. Bank Claims consisted of
claims of certain banks arising under: (i) the Amended and Restated Credit Agreement, dated
as of January 29, 1999, and amended as of March 31, 2000 and (ii) the Term Loan Credit
Agreement dated as of February 25, 1999, as amended as of July 13, 1999, and further amended
as of March 31, 2000, and certain related documents. Bank Debt consisted of borrowings of
approximately $254 million and bears interest, at the greater of: (a) at the option of
Carmike, (i) a specified base rate plus 3.5% or (ii) LIBOR plus 4.5%; or (b) 7.75% per
annum.
    
    Carmike issued $154,315,000 of its former 10 3/8% Senior Subordinated Notes due
2009 in exchange for $154,315,000 aggregate principal amount of the claims in the Chapter 11
Cases concerning the Original Senior Subordinated Notes.
    
    Leases covering 136 of Carmikes underperforming theatres were rejected. Lease
terminations and settlement agreements are being negotiated for the resolution of lease
termination claims, and the restructuring of lease obligations.
    
    General unsecured creditors will receive payments in the aggregate of
approximately $53.8 million with an annual interest rate of 9.4% in resolution of their
allowed claims in Carmikes reorganization, including claims for damages resulting from the
rejection of executory contracts and unexpired leases. Of these claims, $1.3 million are
disputed as of December 31, 2004. As such, the Companys ultimate liability for these claims
is uncertain and is subject to bankruptcy court resolution. The Company has paid, adjusted
by stipulation or changed estimates, as of December 31, 2004, approximately $52.5 million of
these claims. Changes in estimates are the result of ongoing negotiations with creditors.
   48




---



##### Table of Contents



December 31,2004
    
    
    2003
    
    
    2002Write-off of origination fees
    
    $
    
    
    
    $
    
    
    
    $
    8,994Professional fees
    
    
    30
    
    
    
    282
    
    
    
    8,049Gains on sale of assets
    
    
    
    
    
    
    
    
    
    
    (15
    )Interest income
    
    
    
    
    
    
    
    
    
    
    (92
    )Theatre disposition expenses
    
    
    
    
    
    
    
    
    
    
    592Change in estimates on claims
    
    
    (12,552
    )
    
    
    (4,754
    )
    
    
    Other
    
    
    125
    
    
    
    363
    
    
    
    3,019Total reorganization costs
    
    $
    (12,397
    )
    
    $
    (4,109
    )
    
    $
    20,547
  2004
    
    
    2003
    
    
    2002Professional fees
    
    $
    (30
    )
    
    $
    (282
    )
    
    $
    (8,773
    )Retention payments
    
    
    
    
    
    
    
    
    
    
    (283
    )Proceeds from sale of assets
    
    
    
    
    
    
    
    
    
    
    15Payment of pre-petition liabilities
    
    
    (9,300
    )
    
    
    (11,885
    )
    
    
    (8,528
    )Interest income
    
    
    
    
    
    
    
    
    
    
    107Other
    
    
    (125
    )
    
    
    
    
    
    
    (1,486
    )$
    (9,455
    )
    
    $
    (12,167
    )
    
    $
    (18,948
    )
 NOTE 3  LIABILITIES SUBJECT TO COMPROMISE
   December 31,2004
    
    
    2003Disputed unsecured claims
    
    $
    1,348
    
    
    $
    20,424Disputed priority claims
    
    
    
    
    
    
    1,097$
    1,348
    
    
    $
    21,521
 NOTE 4  IMPAIRMENT OF PROPERTY AND EQUIPMENT
  NOTE 5  INVESTMENTS IN UNCONSOLIDATED AFFILIATES
   49




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##### Table of Contents



NOTE 6  OTHER ASSETS
  December 31,2004
    
    
    2003Loan/lease origination fees
    
    $
    17,298
    
    
    $
    7,723Deposits and binders
    
    
    3,689
    
    
    
    3,440Other
    
    
    40
    
    
    
    26$
    21,027
    
    
    $
    11,189
 NOTE 7  PROPERTY AND EQUIPMENT
   December 31,2004
    
    
    2003Buildings and improvements
    
    $
    72,841
    
    
    $
    66,641Less accumulated amortization
    
    
    (16,506
    )
    
    
    (14,079
    )$
    56,335
    
    
    $
    52,562
 NOTE 8  CAPITALIZED INTEREST AND CASH PAID FOR INTEREST
  Interest
    
    
    Interest
    
    
    InterestYears ended December 31,
    
    Expensed
    
    
    Paid
    
    
    Capitalized2004
    
    $
    24,411
    
    
    $
    28,874
    
    
    $
    1,0512003
    
    
    42,206
    
    
    
    43,944
    
    
    
    6972002
    
    
    105,520
    
    
    
    107,158
    
    
    
    292
 NOTE 9  ACCRUED EXPENSES
  December 31,2004
    
    
    2003Deferred revenues
    
    $
    5,999
    
    
    $
    8,682Deferred and other accrued rents
    
    
    7,659
    
    
    
    8,891Property taxes
    
    
    5,695
    
    
    
    5,596Accrued interest
    
    
    4,904
    
    
    
    10,403Accrued salaries
    
    
    4,781
    
    
    
    4,117Sales tax
    
    
    2,944
    
    
    
    2,867Other accruals
    
    
    3,600
    
    
    
    3,857$
    35,582
    
    
    $
    44,413
 50




---



##### Table of Contents



NOTE 10  DEBT
  December 31,2004
    
    
    2003Revolving credit facility
    
    $
    
    
    
    $
    Post-bankruptcy term loan
    
    
    
    
    
    
    168,735New term loan
    
    
    99,000
    
    
    
    10.375% senior subordinated notes
    
    
    
    
    
    
    154,3157.500% senior subordinated notes
    
    
    150,000
    
    
    
    Industrial revenue bonds; payable in equal
installments through May 2006, with interest rates
ranging from 5 3/4% to 7%
    
    
    315
    
    
    
    707249,315
    
    
    
    323,757Current maturities
    
    
    (1,315
    )
    
    
    (707
    )$
    248,000
    
    
    $
    323,050
 2004 Financing Transactions
 Revolving Credit Facility
   
    
    pay dividends or make any other restricted payments;
    
    create liens on our assets;
    
    make certain investments;
    
    dispose of interests in our subsidiaries;
    
    consolidate, merge, transfer or sell assets or acquire properties or businesses;
    
    enter into transactions with our affiliates; and
    
    engage in any sale-leaseback or similar transaction involving any of our assets.
    51




---



##### Table of Contents




    
    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 the term loan facility, the
indenture relating to the 7.500% senior subordinated notes or other debt exceeding $2.5
million in any single case, or $5.0 million in the aggregate.
  Term Loan Facility
   
    
    pay dividends or make any other restricted payments;
    
    create liens on our assets;
    
    make certain investments;
    
    dispose of interests in our subsidiaries;
    
    consolidate, merge, transfer or sell assets or acquire properties or businesses;
    
    enter into transactions with our affiliates; and
    
    engage in any sale-leaseback or similar transaction involving any of our assets.
     52




---



##### Table of Contents



7.500% Senior Subordinated Notes
   
    
    make restricted payments;
    
    create liens on our assets;
    
    consolidate, merge or otherwise transfer or sell all or substantially all of our assets;
    
    engage in certain sales of less than all or substantially all of our assets;
    
    incur additional indebtedness;
    
    issue certain types of stock; and
    
    enter into transactions with affiliates.
       After 5One Year
    
    
    2 Years
    
    
    3 Years
    
    
    4 Years
    
    
    5 Years
    
    
    Years
    
    
    TotalTerm loan credit agreement (1)
    
    $
    1,000
    
    
    $
    1,000
    
    
    $
    1,000
    
    
    $
    1,000
    
    
    $
    95,000
    
    
    $
    
    
    
    $
    99,000Revolving credit agreement (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.500% senior subordinated notes (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000
    
    
    
    150,000General unsecured creditors
    
    
    
    
    
    
    
    
    
    
    1,348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,348Industrial revenue bond
    
    
    315
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    315Total contractual cash obligations
    
    $
    1,315
    
    
    $
    1,000
    
    
    $
    2,348
    
    
    $
    1,000
    
    
    $
    95,000
    
    
    $
    150,000
    
    
    $
    250,663
 
 (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.(3)
    
    The maturity date for the 7.500% senior subordinated notes is February 15, 2014.
  53




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NOTE 11  INCOME TAXES
     December 31,2004
    
    
    2003
    
    
    2002(restated)
    
    
    (restated)Current:Federal
    
    $
    569
    
    
    $
    500
    
    
    $
    (14,706
    )State
    
    
    
    
    
    
    
    
    
    
    Deferred:Federal
    
    
    17,702
    
    
    
    (66,553
    )
    
    
    State
    
    
    1,332
    
    
    
    (5,009
    )
    
    
    Total provision
    
    $
    19,603
    
    
    $
    (71,062
    )
    
    $
    (14,706
    )
  December 31,2004
    
    
    2003
    
    
    2002(restated)
    
    
    (restated)Pre-tax book income (loss)
    
    $
    48,030
    
    
    $
    32,927
    
    
    $
    (54,474
    )Federal tax expense (benefit)
    
    
    16,811
    
    
    
    11,524
    
    
    
    (18,521
    )State tax expense (benefit)
    
    
    1,201
    
    
    
    824
    
    
    
    (1,198
    )Permanent items
    
    
    1,591
    
    
    
    (2,155
    )
    
    
    2,972Other
    
    
    
    
    
    
    (2,869
    )
    
    
    (21
    )Change in Valuation Allowance
    
    
    
    
    
    
    (78,386
    )
    
    
    2,062Total tax expense (benefit)
    
    $
    19,603
    
    
    $
    (71,062
    )
    
    $
    (14,706
    )
  December 31,2004
    
    
    2003(restated)
    
    
    (restated)Alternative minimum tax credit carryforwards
    
    $
    838
    
    
    $
    500Net operating loss carryforwards
    
    
    31,773
    
    
    
    37,139Tax basis of property, equipment and intangible assets over book basis
    
    
    11,497
    
    
    
    18,908Deferred compensation
    
    
    1,960
    
    
    
    1,226Deferred rent
    
    
    1,674
    
    
    
    1,557Disputed claims
    
    
    506
    
    
    
    8,070Other
    
    
    1,232
    
    
    
    1,232Compensation accruals
    
    
    1,121
    
    
    
    1,003Net deferred tax asset/(liability)
    
    $
    50,601
    
    
    $
    69,635
  54




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##### Table of Contents



NOTE 12  STOCKHOLDERS EQUITY
      December 31,2004
    
    
    2003
    
    
    20022002 Stock Plan
    
    
    829
    
    
    
    841
    
    
    
    903Directors Incentive Plan
    
    
    60
    
    
    
    60
    
    
    
    65Employee Incentive Plan
    
    
    170
    
    
    
    170
    
    
    
    5001,059
    
    
    
    1,071
    
    
    
    1,468
  Stock Plans
   55




---



##### Table of Contents



Exercise Price per Share$5.44
    
    
    $6.00-$14.00
    
    
    $18.00-$19.95
    
    
    $21.40-$21.79
    
    
    $27.125-$35.63
    
    
    TotalStock options outstanding at January 1, 2002
    
    
    403
    
    
    
    6
    
    
    
    63
    
    
    
    
    
    
    
    275
    
    
    
    747Cancelled (January 31, 2002)
    
    
    (403
    )
    
    
    (6
    )
    
    
    (63
    )
    
    
    
    
    
    
    (275
    )
    
    
    (747
    )Issued
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    10Stock options outstanding at December 31, 2002
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    10Issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155
    
    
    
    180
    
    
    
    335Stock options outstanding at December 31, 2003
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    155
    
    
    
    180
    
    
    
    345Issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock options outstanding at December 31, 2004
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    155
    
    
    
    180
    
    
    
    345
  56




---



##### Table of Contents



NOTE 13  COMMITMENTS AND CONTINGENCIES
 Leases
   Operating
    
    
    Capital
    
    
    FinancingLeases (1)
    
    
    Leases
    
    
    Obligations2005
    
    $
    40,304
    
    
    $
    6,756
    
    
    $
    5,3282006
    
    
    38,295
    
    
    
    6,632
    
    
    
    5,3282007
    
    
    36,620
    
    
    
    6,636
    
    
    
    5,3282008
    
    
    35,072
    
    
    
    6,604
    
    
    
    5,3282009
    
    
    33,899
    
    
    
    6,624
    
    
    
    5,328Thereafter
    
    
    306,352
    
    
    
    64,646
    
    
    
    76,753Total minimum lease payments
    
    $
    490,542
    
    
    
    97,898
    
    
    
    103,393Less amounts representing interest
    
    
    
    
    
    
    (52,736
    )
    
    
    (74,468
    )Present value of future minimum lease payments
    
    
    
    
    
    
    45,162
    
    
    
    28,925Less current maturities
    
    
    
    
    
    
    (1,420
    )
    
    
    (137
    )Long-term obligations
    
    
    
    
    
    $
    43,742
    
    
    $
    28,788
 
 (1)
    
    Within the operating leases is a commitment to enter into a transaction that will be
accounted for as a financing obligation in the amount of $6.3 million. The Company is required
to make payments on this lease prior to the closing of the financing.   57




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##### Table of Contents



NOTE 14  CONDENSED FINANCIAL DATA
   Condensed Consolidating Balance Sheets
As of December 31, 2004
As restated
 Carmike
    
    
    Guarantor
    
    
    Non-guarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    47,227
    
    
    $
    4,835
    
    
    $
    4,882
    
    
    $
    
    
    
    $
    56,944Accounts and notes receivable
    
    
    1,322
    
    
    
    142
    
    
    
    
    
    
    
    
    
    
    
    1,464Inventories
    
    
    385
    
    
    
    1,062
    
    
    
    12
    
    
    
    
    
    
    
    1,459Prepaid expenses
    
    
    2,329
    
    
    
    3,870
    
    
    
    53
    
    
    
    
    
    
    
    6,252Total current assets
    
    
    51,263
    
    
    
    9,909
    
    
    
    4,947
    
    
    
    
    
    
    
    66,119Other assets:Investment in and advances to partnerships
    
    
    9,331
    
    
    
    2,092
    
    
    
    
    
    
    
    (9,331
    )
    
    
    2,092Investment in subsidiaries and intercompany receivable
    
    
    335,063
    
    
    
    2,220
    
    
    
    
    
    
    
    (337,283
    )
    
    
    Other
    
    
    41,187
    
    
    
    36,974
    
    
    
    1
    
    
    
    
    
    
    
    78,162Property and equipment, net
    
    
    113,538
    
    
    
    351,748
    
    
    
    4,841
    
    
    
    1
    
    
    
    470,128Goodwill
    
    
    5,914
    
    
    
    17,440
    
    
    
    
    
    
    
    
    
    
    
    23,354Total assets
    
    $
    556,296
    
    
    $
    420,383
    
    
    $
    9,789
    
    
    $
    (346,613
    )
    
    $
    639,855Liabilities and stockholders equityCurrent liabilities:Account payable
    
    $
    17,710
    
    
    $
    4,920
    
    
    $
    80
    
    
    $
    
    
    
    $
    22,710Dividends payable
    
    
    2,128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,128Accrued expenses
    
    
    19,293
    
    
    
    15,910
    
    
    
    379
    
    
    
    
    
    
    
    35,582Current maturities of long-term indebtedness,
capital lease and long-term financings obligations
    
    
    1,532
    
    
    
    1,340
    
    
    
    
    
    
    
    
    
    
    
    2,872Total current liabilities
    
    
    40,663
    
    
    
    22,170
    
    
    
    459
    
    
    
    
    
    
    
    63,292Long-term debt less current maturities
    
    
    248,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    248,000Capital lease and long-term financing obligations
less current maturities
    
    
    11,600
    
    
    
    60,930
    
    
    
    
    
    
    
    
    
    
    
    72,530Intercompany liabilities
    
    
    
    
    
    
    222,118
    
    
    
    1,134
    
    
    
    (223,252
    )
    
    
    Liabilities subject to compromise
    
    
    1,348
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,348Stockholders equity
    
    
    254,685
    
    
    
    115,165
    
    
    
    8,196
    
    
    
    (123,361
    )
    
    
    254,685Total liabilities and stockholders equity
    
    $
    556,296
    
    
    $
    420,383
    
    
    $
    9,789
    
    
    $
    (346,613
    )
    
    $
    639,855
 58




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##### Table of Contents



Condensed Consolidating Statements of Operations
For Year Ended December 31, 2004As restated
 Carmike
    
    
    Guarantor
    
    
    Non-guarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenuesAdmissions
    
    $
    65,560
    
    
    $
    261,197
    
    
    $
    4,722
    
    
    $
    
    
    
    $
    331,479Concessions and other
    
    
    54,451
    
    
    
    129,613
    
    
    
    2,038
    
    
    
    (23,106
    )
    
    
    162,996120,011
    
    
    
    390,810
    
    
    
    6,760
    
    
    
    (23,106
    )
    
    
    494,475Costs and expensesFilm exhibition costs
    
    
    33,095
    
    
    
    138,926
    
    
    
    2,452
    
    
    
    
    
    
    
    174,473Concession costs
    
    
    3,119
    
    
    
    13,571
    
    
    
    191
    
    
    
    
    
    
    
    16,881Other theatre operating costs
    
    
    39,474
    
    
    
    159,935
    
    
    
    2,460
    
    
    
    (22,742
    )
    
    
    179,127General and administrative expenses
    
    
    18,294
    
    
    
    1,006
    
    
    
    366
    
    
    
    (364
    )
    
    
    19,302Depreciation expenses
    
    
    7,155
    
    
    
    26,240
    
    
    
    406
    
    
    
    
    
    
    
    33,801Gain on sales of property and equipment
    
    
    (23
    )
    
    
    (522
    )
    
    
    (506
    )
    
    
    
    
    
    
    (1,051
    )Impairment of long-lived assets
    
    
    362
    
    
    
    530
    
    
    
    
    
    
    
    
    
    
    
    892101,476
    
    
    
    339,686
    
    
    
    5,369
    
    
    
    (23,106
    )
    
    
    423,425Operating income
    
    
    18,535
    
    
    
    51,124
    
    
    
    1,391
    
    
    
    
    
    
    
    71,050Interest expense
    
    
    23
    
    
    
    26,081
    
    
    
    
    
    
    
    
    
    
    
    26,104Loss on extinguishment of debt
    
    
    9,313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,313Income before reorganization costs and income taxes
    
    
    9,199
    
    
    
    25,043
    
    
    
    1,391
    
    
    
    
    
    
    
    35,633Reorganization costs
    
    
    (12,397
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,397
    )Net income before income taxes
    
    
    21,596
    
    
    
    25,043
    
    
    
    1,391
    
    
    
    
    
    
    
    48,030Income tax expense
    
    
    6,790
    
    
    
    12,813
    
    
    
    
    
    
    
    
    
    
    
    19,60314,806
    
    
    
    12,230
    
    
    
    1,391
    
    
    
    
    
    
    
    28,427Equity in earnings of subsidiaries
    
    
    13,621
    
    
    
    
    
    
    
    
    
    
    
    (13,621
    )
    
    
    Net income available for common stockholders
    
    $
    28,427
    
    
    $
    12,230
    
    
    $
    1,391
    
    
    $
    (13,621
    )
    
    $
    28,427
 59




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##### Table of Contents



Condensed Consolidating Statements of Cash Flow
For Year Ended December 31, 2004As restated
 Carmike
    
    
    Guarantor
    
    
    Non-guarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income (loss)
    
    $
    28,427
    
    
    $
    12,230
    
    
    $
    1,391
    
    
    $
    (13,621
    )
    
    $
    28,427Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation
    
    
    7,155
    
    
    
    26,240
    
    
    
    406
    
    
    
    
    
    
    
    33,801Interest expense
    
    
    1,693
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,693Impairment charge
    
    
    362
    
    
    
    530
    
    
    
    
    
    
    
    
    
    
    
    892Deferred income taxes
    
    
    6,683
    
    
    
    12,321
    
    
    
    
    
    
    
    
    
    
    
    19,004Non-cash deferred compensation
    
    
    5,757
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,757Non-cash reorganization on items
    
    
    (12,552
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,552
    )Gain on sales of property and equipment
    
    
    (23
    )
    
    
    (522
    )
    
    
    (506
    )
    
    
    
    
    
    
    (1,051
    )Changes in operating assets and liabilities
    
    
    15,837
    
    
    
    (44,675
    )
    
    
    (1,357
    )
    
    
    13,621
    
    
    
    (16,574
    )Net cash provided by (used in) operating activities
    
    
    53,339
    
    
    
    6,124
    
    
    
    (66
    )
    
    
    
    
    
    
    59,397Investing activitiesPurchases of property and equipment
    
    
    (20,544
    )
    
    
    (18,047
    )
    
    
    (53
    )
    
    
    
    
    
    
    (38,644
    )Proceeds from sale of property and equipment
    
    
    213
    
    
    
    1,774
    
    
    
    2,590
    
    
    
    
    
    
    
    4,577Net change in consolidation of partnerships
    
    
    (1,333
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,333
    )Net cash provided by (used in) investing activities
    
    
    (21,664
    )
    
    
    (16,273
    )
    
    
    2,537
    
    
    
    
    
    
    
    (35,400
    )Financing activitiesAdditional borrowing, net of debt issuance costs
    
    
    250,263
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250,263Repayments of debt
    
    
    (342,079
    )
    
    
    (1,270
    )
    
    
    
    
    
    
    
    
    
    
    (343,349
    )Issuance of common stock
    
    
    89,052
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,052Dividends paid
    
    
    (4,255
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,255
    )Net cash used in financing activities
    
    
    (7,019
    )
    
    
    (1,270
    )
    
    
    
    
    
    
    
    
    
    
    (8,289
    )Increase (decrease) in cash and cash equivalents
    
    
    24,656
    
    
    
    (11,419
    )
    
    
    2,471
    
    
    
    
    
    
    
    15,708Cash and cash equivalents at beginning of year
    
    
    22,571
    
    
    
    16,254
    
    
    
    2,411
    
    
    
    
    
    
    
    41,236Cash and cash equivalents at end of year
    
    $
    47,227
    
    
    $
    4,835
    
    
    $
    4,882
    
    
    $
    
    
    
    $
    56,944
 60




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##### Table of Contents



Condensed Consolidating Balance Sheets
As of December 31, 2003As restated
 Carmike
    
    
    GuarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    24,982
    
    
    $
    16,254
    
    
    $
    
    
    
    $
    41,236Accounts and notes receivable
    
    
    1,938
    
    
    
    123
    
    
    
    
    
    
    
    2,061Inventories
    
    
    407
    
    
    
    1,170
    
    
    
    
    
    
    
    1,577Prepaid expenses
    
    
    7,189
    
    
    
    (233
    )
    
    
    
    
    
    
    6,956Total current assets
    
    
    34,516
    
    
    
    17,314
    
    
    
    
    
    
    
    51,830Other assets:Investment in and advances to partnerships
    
    
    4,955
    
    
    
    1,997
    
    
    
    
    
    
    
    6,952Investment in subsidiaries and intercompany receivable
    
    
    102,932
    
    
    
    
    
    
    
    (102,932
    )
    
    
    Other
    
    
    295,226
    
    
    
    53,363
    
    
    
    (258,833
    )
    
    
    89,756Property and equipment, net
    
    
    102,974
    
    
    
    357,349
    
    
    
    
    
    
    
    460,323Goodwill, net
    
    
    5,914
    
    
    
    17,440
    
    
    
    
    
    
    
    23,354Total assets
    
    $
    546,517
    
    
    $
    447,463
    
    
    $
    (361,765
    )
    
    $
    632,215Liabilities and stockholders equityCurrent liabilities:Account payable
    
    $
    15,400
    
    
    $
    11,962
    
    
    $
    
    
    
    $
    27,362Accrued expenses
    
    
    28,021
    
    
    
    16,392
    
    
    
    
    
    
    
    44,413Current maturities of long-term indebtedness and
capital lease and financing obligations
    
    
    887
    
    
    
    1,275
    
    
    
    
    
    
    
    2,162Total current liabilities
    
    
    44,308
    
    
    
    29,629
    
    
    
    
    
    
    
    73,937Long-term debt less current maturities
    
    
    323,050
    
    
    
    
    
    
    
    
    
    
    
    323,050Capital lease and long-term financing obligations
less current maturities
    
    
    11,820
    
    
    
    56,069
    
    
    
    
    
    
    
    67,889Long-term trade payables less current maturities
    
    
    7,988
    
    
    
    
    
    
    
    
    
    
    
    7,988Intercompany liabilities
    
    
    
    
    
    
    258,833
    
    
    
    (258,833
    )
    
    
    Liabilities subject to compromise
    
    
    21,521
    
    
    
    
    
    
    
    
    
    
    
    21,521Stockholders equity
    
    
    137,830
    
    
    
    102,932
    
    
    
    (102,932
    )
    
    
    137,830Total liabilities and stockholders equity
    
    $
    546,517
    
    
    $
    447,463
    
    
    $
    (361,765
    )
    
    $
    632,215
 61




---



##### Table of Contents



Condensed Consolidating Statements of Operations
For Year Ended December 31, 2003As restated
 Carmike
    
    
    GuarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenuesAdmissions
    
    $
    66,057
    
    
    $
    266,013
    
    
    $
    
    
    
    $
    332,070Concessions and other
    
    
    56,130
    
    
    
    128,957
    
    
    
    (24,072
    )
    
    
    161,015122,187
    
    
    
    394,970
    
    
    
    (24,072
    )
    
    
    493,085Costs and expensesFilm exhibition costs
    
    
    33,665
    
    
    
    146,738
    
    
    
    
    
    
    
    180,403Concession costs
    
    
    3,155
    
    
    
    14,830
    
    
    
    
    
    
    
    17,985Other theatre operating costs
    
    
    39,710
    
    
    
    161,143
    
    
    
    (24,072
    )
    
    
    176,781General and administrative expenses
    
    
    15,344
    
    
    
    (9
    )
    
    
    
    
    
    
    15,335Depreciation expenses
    
    
    6,897
    
    
    
    25,867
    
    
    
    
    
    
    
    32,764Gain on sales of property and equipment
    
    
    (671
    )
    
    
    (2,352
    )
    
    
    
    
    
    
    (3,023
    )Impairment of long-lived assets
    
    
    
    
    
    
    1,148
    
    
    
    
    
    
    
    1,14898,100
    
    
    
    347,365
    
    
    
    (24,072
    )
    
    
    421,393Operating income
    
    
    24,087
    
    
    
    47,605
    
    
    
    
    
    
    
    71,692Interest expense
    
    
    12,394
    
    
    
    30,480
    
    
    
    
    
    
    
    42,874Income before reorganization costs and income taxes
    
    
    11,693
    
    
    
    17,125
    
    
    
    
    
    
    
    28,818Reorganization benefits
    
    
    (4,109
    )
    
    
    
    
    
    
    
    
    
    
    (4,109
    )Net income before income taxes
    
    
    15,802
    
    
    
    17,125
    
    
    
    
    
    
    
    32,927Income tax (benefit)
    
    
    (32,710
    )
    
    
    (38,352
    )
    
    
    
    
    
    
    (71,062
    )48,512
    
    
    
    55,477
    
    
    
    
    
    
    
    103,989Equity in earnings of subsidiaries
    
    
    55,477
    
    
    
    
    
    
    
    (55,477
    )
    
    
    Net income (loss) available for common stockholders
    
    
    103,989
    
    
    
    55,477
    
    
    
    (55,477
    )
    
    
    103,989
 62




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Condensed Consolidating Statements of Cash Flow
For Year Ended December 31, 2003As restated
 Carmike
    
    
    GuarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income (loss)
    
    $
    103,989
    
    
    $
    55,477
    
    
    $
    (55,477
    )
    
    $
    103,989Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation
    
    
    6,897
    
    
    
    25,867
    
    
    
    
    
    
    
    32,764Interest Expense
    
    
    668
    
    
    
    
    
    
    
    
    
    
    
    668Impairment charge
    
    
    
    
    
    
    1,148
    
    
    
    
    
    
    
    1,148Deferred income taxes
    
    
    (35,137
    )
    
    
    (36,425
    )
    
    
    
    
    
    
    (71,562
    )Non-cash deferred compensation
    
    
    6,023
    
    
    
    
    
    
    
    
    
    
    
    6,023Non-cash reorganization on items
    
    
    (5,940
    )
    
    
    
    
    
    
    
    
    
    
    (5,940
    )Gain on sales of property and equipment
    
    
    (671
    )
    
    
    (2,352
    )
    
    
    
    
    
    
    (3,023
    )Changes in operating assets and liabilities
    
    
    (39,589
    )
    
    
    (26,692
    )
    
    
    55,477
    
    
    
    (10,804
    )Net cash provided by operating activities
    
    
    36,240
    
    
    
    17,023
    
    
    
    
    
    
    
    53,263Investing activitiesPurchases of property and equipment
    
    
    (1,683
    )
    
    
    (17,245
    )
    
    
    
    
    
    
    (18,928
    )Proceeds from sale of property and equipment
    
    
    1,967
    
    
    
    4,755
    
    
    
    
    
    
    
    6,722Net cash provided by (used) in investing activities
    
    
    284
    
    
    
    (12,490
    )
    
    
    
    
    
    
    (12,206
    )Financing activitiesAdditional borrowing, net of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repayments of debt
    
    
    (51,331
    )
    
    
    (818
    )
    
    
    
    
    
    
    (52,149
    )Prepaid financing costs
    
    
    
    
    
    
    (1,163
    )
    
    
    
    
    
    
    (1,163
    )Proceeds from long-term financing obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (51,331
    )
    
    
    (1,981
    )
    
    
    
    
    
    
    (53,312
    )Increase (decrease) in cash and cash equivalents
    
    
    (14,807
    )
    
    
    2,552
    
    
    
    
    
    
    
    (12,255
    )Cash and cash equivalents at beginning of year
    
    
    39,789
    
    
    
    13,702
    
    
    
    
    
    
    
    53,491Cash and cash equivalents at end of year
    
    $
    24,982
    
    
    $
    16,254
    
    
    
    
    
    
    $
    41,236
 63




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Condensed Consolidating Statements of Operations
For Year Ended December 31, 2002
 Carmike
    
    
    GuarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedRevenuesAdmissions
    
    $
    67,621
    
    
    $
    275,218
    
    
    $
    
    
    
    $
    342,839Concessions and other
    
    
    56,333
    
    
    
    131,124
    
    
    
    (23,789
    )
    
    
    163,668123,954
    
    
    
    406,342
    
    
    
    (23,789
    )
    
    
    506,507Costs and expensesFilm exhibition costs
    
    
    36,263
    
    
    
    153,002
    
    
    
    
    
    
    
    189,265Concession costs
    
    
    3,551
    
    
    
    15,682
    
    
    
    
    
    
    
    19,233Other theatre operating costs
    
    
    40,289
    
    
    
    161,876
    
    
    
    (23,789
    )
    
    
    178,376General and administrative expenses
    
    
    14,902
    
    
    
    81
    
    
    
    
    
    
    
    14,983Depreciation and amortization expenses
    
    
    7,248
    
    
    
    26,490
    
    
    
    
    
    
    
    33,738Gain on sales of property and equipment
    
    
    (330
    )
    
    
    (351
    )
    
    
    
    
    
    
    (681
    )101,923
    
    
    
    356,780
    
    
    
    (23,789
    )
    
    
    434,914Operating income
    
    
    22,031
    
    
    
    49,562
    
    
    
    
    
    
    
    71,593Interest expense
    
    
    52,832
    
    
    
    52,688
    
    
    
    
    
    
    
    105,520Income before reorganization costs and income taxes
    
    
    (30,801
    )
    
    
    (3,126
    )
    
    
    
    
    
    
    (33,927
    )Reorganization costs
    
    
    20,030
    
    
    
    517
    
    
    
    
    
    
    
    20,547Net income before income taxes
    
    
    (50,831
    )
    
    
    (3,643
    )
    
    
    
    
    
    
    (54,474
    )Income tax (benefit)
    
    
    (14,706
    )
    
    
    
    
    
    
    
    
    
    
    (14,706
    )(36,125
    )
    
    
    (3,643
    )
    
    
    
    
    
    
    (39,768
    )Equity in earnings of subsidiaries
    
    
    (3,643
    )
    
    
    
    
    
    
    3,643
    
    
    
    Net income (loss) available for common stockholders
    
    $
    (39,768
    )
    
    $
    (3,643
    )
    
    $
    3,643
    
    
    $
    (39,768
    )
 64




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##### Table of Contents



Condensed Consolidating Statements of Cash Flow
For Year Ended December 31, 2002
 Carmike
    
    
    GuarantorCinemas, Inc.
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedOperating activitiesNet income (loss)
    
    $
    (39,768
    )
    
    $
    (3,643
    )
    
    $
    3,643
    
    
    $
    (39,768
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation and amortization
    
    
    7,248
    
    
    
    26,490
    
    
    
    
    
    
    
    33,738Non-cash deferred compensation
    
    
    3,614
    
    
    
    
    
    
    
    
    
    
    
    3,614Non-cash reorganization items
    
    
    13,528
    
    
    
    
    
    
    
    
    
    
    
    13,528Gain on sales of property and equipment
    
    
    (330
    )
    
    
    (351
    )
    
    
    
    
    
    
    (681
    )Changes in operating assets and liabilities
    
    
    22,902
    
    
    
    (13,418
    )
    
    
    (3,643
    )
    
    
    5,841Net cash provided by operating activities
    
    
    7,194
    
    
    
    9,078
    
    
    
    
    
    
    
    16,272Investing activitiesPurchases of property and equipment
    
    
    (2,636
    )
    
    
    (15,432
    )
    
    
    
    
    
    
    (18,068
    )Proceeds from sale of property and equipment
    
    
    813
    
    
    
    2,662
    
    
    
    
    
    
    
    3,475Net cash used in investing activities
    
    
    (1,823
    )
    
    
    (12,770
    )
    
    
    
    
    
    
    (14,593
    )Financing activitiesAdditional borrowing, net of debt issuance costs
    
    
    15,405
    
    
    
    6,300
    
    
    
    
    
    
    
    21,705Repayments of debt
    
    
    (64,723
    )
    
    
    (808
    )
    
    
    
    
    
    
    (65,531
    )Prepaid financing costs
    
    
    
    
    
    
    (1,163
    )
    
    
    
    
    
    
    (1,163
    )Proceeds from long-term financing obligations
    
    
    2,768
    
    
    
    (154
    )
    
    
    
    
    
    
    2,614Net cash used in financing activities
    
    
    (46,550
    )
    
    
    4,175
    
    
    
    
    
    
    
    (42,375
    )Increase (decrease) in cash and cash equivalents
    
    
    (41,179
    )
    
    
    483
    
    
    
    
    
    
    
    (40,696
    )Cash and cash equivalents at beginning of year
    
    
    80,968
    
    
    
    13,219
    
    
    
    
    
    
    
    94,187Cash and cash equivalents at end of year
    
    $
    39,789
    
    
    $
    13,702
    
    
    $
    
    
    
    $
    53,491
 NOTE 15- LITIGATION
  NOTE 16  FINANCIAL INSTRUMENTS
 Concentrations of credit risk
    Cash and cash equivalents:
 Accounts receivable and accounts payable:
 Long-term debt:
 65




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##### Table of Contents



NOTE
17  QUARTERLY RESULTS As restated (Unaudited)
  1st Quarter
    
    
    2nd Quarter
    
    
    3rd Quarter
    
    
    4th Quarter
    
    
    TotalYear ended December 31, 2004Total revenues
    
    $
    116,928
    
    
    $
    133,096
    
    
    $
    116,928
    
    
    $
    127,523
    
    
    $
    494,475Operating income
    
    
    19,832
    
    
    
    19,594
    
    
    
    11,324
    
    
    
    20,300
    
    
    
    71,050Net income
    
    
    1,689
    
    
    
    10,045
    
    
    
    7,267
    
    
    
    9,426
    
    
    
    28,427Income per common share:Basic
    
    $
    0.16
    
    
    $
    0.84
    
    
    $
    0.61
    
    
    $
    0.81
    
    
    $
    2.43Diluted
    
    $
    0.15
    
    
    $
    0.78
    
    
    $
    0.57
    
    
    $
    0.76
    
    
    $
    2.28Year ended December 31, 2003Total revenues
    
    $
    103,214
    
    
    $
    130,440
    
    
    $
    128,227
    
    
    $
    131,204
    
    
    $
    493,085Operating income
    
    
    15,714
    
    
    
    19,412
    
    
    
    19,459
    
    
    
    17,107
    
    
    
    71,692Net income
    
    
    4,762
    
    
    
    13,686
    
    
    
    9,251
    
    
    
    76,290
    
    
    
    103,989Income per common share:Basic
    
    $
    0.52
    
    
    $
    1.52
    
    
    $
    1.03
    
    
    $
    8.49
    
    
    $
    11.57Diluted
    
    $
    0.51
    
    
    $
    1.48
    
    
    $
    0.98
    
    
    $
    8.08
    
    
    $
    11.01
   NOTE 18  RESTATEMENTS
    Basic
    
    Diluted2004Income tax expense effect
    
    $
    (0.12)
    
    
    $
    (0.11)2003Income tax expense effect
    
    $
    (0.26)
    
    
    $
    (0.25)
 66




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##### Table of Contents



As Previously2004
    
    Reported
    
    As RestatedConsolidated Balance SheetDeferred income tax asset
    
    $
    54,414
    
    
    $
    50,601Total other assets
    
    
    84,067
    
    
    
    80,254Total assets
    
    
    643,668
    
    
    
    639,855Accumulated deficit
    
    
    (50,857
    )
    
    
    (54,670
    )Total Equity
    
    
    258,498
    
    
    
    254,685Total liabilities and stockholders equity
    
    $
    643,668
    
    
    $
    639,855Consolidated Statement of OperationsIncome Tax Expense
    
    $
    18,191
    
    
    $
    19,603Net Income (loss) available for common stockholders
    
    $
    29,839
    
    
    $
    28,427Income (loss) per common share: Basic
    
    $
    2.55
    
    
    $
    2.43Income (loss) per common share: Diluted
    
    $
    2.39
    
    
    $
    2.28Consolidated Statement of Cash FlowsNet Income (loss)
    
    $
    29,839
    
    
    $
    28,427Deferred income taxes
    
    $
    17,592
    
    
    $
    19,004
 As Previously2003
    
    Reported
    
    As RestatedConsolidated Balance SheetDeferred income tax asset
    
    $
    72,036
    
    
    $
    69,635Total other assets
    
    
    99,109
    
    
    
    96,708Total assets
    
    $
    634,616
    
    
    $
    632,215Retained deficit
    
    
    (74,314
    )
    
    
    (76,715
    )Total Equity
    
    
    140,231
    
    
    
    137,830Total liabilities and stockholders equity
    
    $
    634,616
    
    
    $
    632,215Consolidated Statement of OperationsIncome Tax Expense
    
    
    (73,463
    )
    
    
    (71,062
    )Net Income (loss) available for common stockholders
    
    $
    106,390
    
    
    $
    103,989Income (loss) per common share: Basic
    
    $
    11.83
    
    
    $
    11.57Income (loss) per common share: Diluted
    
    $
    11.26
    
    
    $
    11.01Consolidated Statement of Cash FlowsNet Income (loss)
    
    $
    106,390
    
    
    $
    103,989Deferred income taxes
    
    
    (73,963
    )
    
    
    (71,562
    )
 
 ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
    67




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##### Table of Contents



ITEM 9A. CONTROLS AND PROCEDURES.
 Disclosure Controls and Procedures
    Managements Report on Internal Control Over Financial Reporting
  Internal Control Integrated Framework
  1.
    
    As of December 31, 2004, the Company did not maintain effective controls over the
accounting for and reporting of non-routine and non-systematic transactions because it did
not have adequate personnel who possessed sufficient depth and experience to correctly
account for such transactions in accordance with generally accepted accounting principles.
As a result, the Company did not properly account for its fourth quarter acquisition of the
remaining 50% interest in a limited liability company, which operates two theatres, in which
the Company previously had a 50% equity investment in accordance with generally accepted
accounting principles. This control deficiency resulted in immaterial misstatements to the
Companys consolidated financial statements for the year ended December 31, 2004. In
addition, the Companys lack of adequate personnel who possessed sufficient depth and
experience contributed to the restatement of the Companys
Consolidated Financial Statements for the year ended
December 31, 2003 and its Consolidated Financial Statements for the quarters ended March 31 and June 30, 2004 to
correct errors related to lease accounting primarily affecting property, plant and
equipment, financing obligations, rent expense, interest expense and depreciation expense.
Additionally, this control deficiency could result in a material misstatement to the
Companys annual or interim consolidated financial statements that would not be prevented or
detected.
 68




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##### Table of Contents



2.
    
    As of December 31, 2004, the Company did not have the
appropriate level of expertise to properly calculate and review its
accounting for income taxes. Specifically, the Company did not
maintain effective controls over the accounting for income taxes and
the determination of income taxes payable, deferred income tax assets
and liabilities and the related income tax provision. This control
deficiency resulted in the restatement of the Companys
consolidated financial statements for the year ended
December 31, 2003 and its consolidated financial statements for
the quarters ended March 31 and June 30, 2004, as well as
adjustments to the Companys consolidated financial statements
for the quarter ended September 30, 2004 and the year ended
December 31, 2004. This control deficiency also resulted in the
restatement, discussed in Note 18 to the consolidated financial
statements, of the Companys consolidated financial statements,
reported in this Form 10-K/A No. 2 for the years ended
December 31, 2003 and 2004 and its consolidated financial
statements for the quarters ended March 31 and June 30,
2005, as well as adjustments to the Companys consolidated financial
statements for the quarter ended September 30, 2005.
Additionally, this control deficiency could result in a misstatement
of income taxes payable, deferred income tax assets and liabilities
and the related income tax provision that would result in a material
misstatement to the Companys annual or interim consolidated
financial statements that would not be prevented or detected.
 Internal Control Integrated Framework
   Remediation Measures for Identified Material Weaknesses
  1.
    
    Engaged an outside consultant to assist management in preparation of the Companys tax
provision for inclusion in the financial statements;2.
    
    Formalized processes, procedures and documentation standards relating to the income tax
provision; and3.
    
    Enhanced the levels of review in and accelerated the timing of the preparation of the
quarterly and annual income tax provision.
   1.
    
    The Company will require continuing education during 2005 for the accounting and finance
staff to ensure compliance with current and emerging financial reporting and compliance practices
and for the tax manager to ensure compliance with current and emerging tax reporting and compliance
practices.2.
    
    The Company will utilize outside consultants, other than the Companys independent
registered public accounting firm, to assist management in its analysis of complex accounting
transactions and related reporting and in the preparation of the Companys tax provision for
inclusion in the financial statements.3.
    
    The Company will assess staffing levels and expertise in its accounting and finance areas
and take the steps necessary to appropriately staff the accounting and finance departments.
 69




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##### Table of Contents



4.
    
    The Company and the Audit Committee, as necessary, will consider additional items, or
will alter the planned steps identified above, in order to further remediate the material
weaknesses described above.
 Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION.
  
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
      
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  70




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71




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  Financial Statements:Report of Independent Registered Public Accounting FirmConsolidated balance sheets  December 31, 2004 and 2003Consolidated statements of operations  Years ended December 31, 2004, 2003 and 2002Consolidated statements of cash flows  Years ended December 31, 2004, 2003 and 2002Consolidated statements of stockholders equity  Years ended December 31, 2004, 2003 and 2002Notes to Consolidated Financial Statements  December 31, 2004
      72




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##### Table of Contents



ExhibitNumber
    
    Description2.1
    
    Debtors Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
dated November 14, 2001 (filed as Exhibit 99 to Carmikes Current Report on Form 8-K
filed November 19, 2001 and incorporated herein by reference).2.2
    
    Debtors Amended Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code,
dated November 14, 2001 (filed as Exhibit T-3E1 to Carmikes Form T-3 filed December
11, 2001 and incorporated herein by reference).3.1
    
    Amended and Restated Certificate of Incorporation of Carmike Cinemas, Inc. (filed as
Exhibit 3.1 to Carmikes Amendment to Form 8-A filed January 31, 2002 and incorporated
herein by reference).3.2
    
    Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as Exhibit 3.2 to
Carmikes Amendment to Form 8-A filed January 31, 2002 and incorporated herein by
reference).3.3
    
    Amendment No. 1 to the Amended and Restated By-Laws of Carmike Cinemas, Inc. (filed as
Exhibit 3.2 to Carmikes Form 10-Q for the quarter ended June 30, 2003 and incorporated
herein by reference).4.1
    
    Indenture, dated as of February 4, 2004, among Carmike Cinemas, Inc., each of the
Guarantors named therein and Wells Fargo Bank Minnesota, National Association, as
Trustee (filed as Exhibit 4.2 to Carmikes Current Report on Form 8-K filed February
20, 2004 and incorporated herein by reference).4.2
    
    Registration Rights Agreement, dated as of February 4, 2004, among Carmike Cinemas,
Inc., each of the Guarantors named therein and Goldman, Sachs & Co. (filed as Exhibit
4.3 to Carmikes Current Report on Form 8-K filed February 20, 2004 and incorporated
herein by reference).4.3
    
    Registration Rights Agreement, dated as of January 31, 2002, by and among Carmike
Cinemas, Inc. and certain stockholders (filed as Exhibit 99.3 to Amendment No. 1 to
Schedule 13D of Goldman, Sachs & Co., et. al., filed February 8, 2002 and incorporated
herein by reference).4.4
    
    First Amendment to Stockholders Agreement, dated as of May 9, 2003, by and among
Carmike Cinemas, Inc. and certain stockholders (filed as Exhibit 4.4 to Carmikes Form
S-1/A (Registration No. 333-90028) filed November 18, 2003 and incorporated herein by
reference).4.5
    
    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
    
    $50,000,000 Senior Secured First Priority Revolving Credit Facility, dated as of
February 4, 2004, among Carmike Cinemas, Inc., each of the Guarantors named therein,
the Lenders party to the agreement from time to time, Goldman Sachs Credit Partners
L.P., as Syndication Agent, Wells Fargo Foothill, Inc., as Administrative Agent and
Collateral Agent, and CIT Lending Services Corporation and General Electric Capital
Corporation, as Co-Documentation Agents (filed as Exhibit 10.1 to Carmikes Current
Report on Form 8-K filed February 20, 2004 and incorporated herein by reference).10.2
    
    $100,000,000 Senior Secured Second Priority Credit Facility, dated as of February 4,
2004, among Carmike Cinemas, Inc., each of the Guarantors named therein, the Lenders
party to the agreement from time to time, Goldman Sachs Credit Partners L.P., as
Syndication Agent, and National City Bank, as Administrative Agent and Collateral Agent
(filed as Exhibit 10.2 to Carmikes Current Report on Form 8-K filed February 20, 2004
and incorporated herein by reference).10.3
    
    Stock Purchase Agreement, dated as of June 27, 1997, by and between the Stockholders of
Morgan Creek Theatres, Inc.; Stockholders of SB Holdings, Inc.; members of RDL
Consulting Limited Liability Company; Morgan Creek Theatres, Inc.; SB Holdings, Inc.;
RDL Consulting Limited Liability Company; First International Theatres; Carmike
Cinemas, Inc. and Eastwynn Theatres, Inc. (filed as Exhibit 10.2 to Carmikes Form 10-Q
(Registration No. 001-11604) for the quarter ended June 30, 1997 and incorporated
herein by reference).10.4*
    
    Carmike Cinemas, Inc. Deferred Compensation Agreement and Trust Agreement, dated as of
January 1, 1990 (filed as Exhibit 10(u) to Carmikes Form 10-K (Registration No.
000-14993) for the year ended December 31, 1990 and incorporated herein by reference).10.5
    
    Aircraft Lease, dated July 1, 1983, as amended June 30, 1986, by and between C.L.P.
Equipment and Carmike Cinemas,
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ExhibitNumber
    
    DescriptionInc. (filed as Exhibit 10(h) to Carmikes Registration
Statement on Form S-1 (Registration No. 33-8007) and incorporated herein by reference).10.6
    
    Summary of Extensions of Aircraft Lease Agreement and Equipment Lease Agreement which
are Exhibits 10(e) and 10(k) (filed as Exhibit 10(o) to Carmikes Form 10-K
(Registration No. 000-14993) for the year ended December 31, 1991 and incorporated
herein by reference).10.7
    
    Second Amended and Restated Master Lease, dated September 1, 2001, between MoviePlex
Realty Leasing, L.L.C. and Carmike Cinemas, Inc. (filed as Exhibit 10.17 to Carmikes
Form 10-K for the year ended December 31, 2001 and incorporated herein by reference).10.8*
    
    Trust Agreement, dated as of July 16, 1999, between Carmike Cinemas, Inc., Michael W.
Patrick, F. Lee Champion, III and Larry M. Adams (filed as Exhibit 10.23 to Carmikes
Form 10-K for the year ended December 31, 1999 and incorporated herein by reference).10.9*
    
    Carmike Cinemas, Inc. Employee Retention and Severance Plan (filed as Exhibit 10.22 to
Carmikes Form 10-K for the year ended December 31, 2000 and incorporated herein by
reference).10.10*
    
    Carmike Cinemas, Inc. 2002 Stock Plan (filed as Exhibit 4.2 to Carmikes Form S-8
(Registration No. 333-85194) filed March 29, 2002 and incorporated herein by
reference).10.11*
    
    Employment Agreement, dated as of January 31, 2002, between Carmike Cinemas, Inc. and
Michael W. Patrick (filed as Exhibit 10 to Carmikes Form 10-Q for the quarter ended
March 31, 2002 and incorporated herein by reference).10.12*
    
    Carmike Cinemas, Inc. Non-Employee Directors Long-Term stock Incentive Plan (filed as
Appendix C to Carmikes 2002 Definitive Proxy Statement filed July 24, 2002 and
incorporated herein by reference).10.13*
    
    Carmike Cinemas, Inc. Employee and Consultant Long-Term stock Incentive Plan (filed as
Appendix D to Carmikes 2002 Definitive Proxy Statement filed July 24, 2002 and
incorporated herein by reference).10.14*
    
    Form of Separation Agreement and schedule of officers who have entered into such
agreement (filed as Exhibit 10.1 to Carmikes Form 10-Q for the quarter ended June 30,
2003 and incorporated herein by reference).10.15*
    
    Michael W. Patrick Dividend-Related Bonus Agreement, effective as of January 29, 2004,
between Carmike Cinemas, Inc. and Michael W. Patrick (filed as Exhibit 10.3 to
Carmikes Form 10-Q for the quarter ended March 31, 2004 and incorporated herein by
reference).10.16
    
    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).10.17
    
    Indemnification Agreement, effective as of December 10, 2004, by and between Carmike
Cinemas, Inc. and Fred W. Van Noy (filed as Exhibit 10.1 to Carmikes Current Report on
Form 8-K filed on January 24, 2005 and incorporated herein by reference).10.18
    
    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).10.19
    
    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).10.20*
    
    Carmike Cinemas, Inc. 2004 Incentive Stock Plan (filed as Appendix A to Carmikes
Definitive Proxy Statement for the 2004 Annual Meeting of Stockholders, filed on April
16, 2004 and incorporated herein by reference).11
    
    Computation of per share earnings (provided in Note 1 to the Notes to Audited
Consolidated Financial Statements included in this report under the caption Earnings
Per Share).21
    
    List of Subsidiaries.23.1
    
    Consent of PricewaterhouseCoopers LLP.23.2
    
    Consent of Ernst & Young LLP.
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##### Table of Contents



ExhibitNumber
    
    Description31.1
    
    Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of
the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of
the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certificate of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certificate of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Management contract or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 15(c) of Form 10-K.     75




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##### Table of Contents



SIGNATURES
  CARMIKE CINEMAS, INC.Date: November 9, 2005
    
    By:
    
    /s/ Michael W. PatrickMichael W. PatrickChairman of the Board of Directors,President and Chief Executive OfficerDate: November 9, 2005
    
    
    
    /s/ Martin A. DurantMartin A. DurantSenior Vice President  Finance,Treasurer and Chief Financial Officer(Principal Financial Officer and Chief Accounting Officer)
 76




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Schedule II  Valuation and Qualifying Accounts
Carmike Cinemas, Inc. and Subsidiaries
December 31, 2004 (in thousands of dollars)
 Col. A
    
    Col. B
    
    Col. C
    
    Col. D
    
    Col. EAs
restatedAdditionsBalance at
    
    Charged to
    
    Charged to
    
    
    
    
    
    Balance atBeginning of
    
    Costs and
    
    Other Accounts
    
    Deductions -
    
    EndDescription
    
    Period
    
    Expenses
    
    - Describe
    
    Describe
    
    of PeriodYear Ended December 31, 2001:Valuation reserve for deferred income tax assets
    
    $
    40,951
    
    
    $
    36,735
    (1)
    
    $
    
    
    
    $
    
    
    
    $
    77,686Year Ended December 31, 2002:Valuation reserve for deferred income tax assets
    
    $
    77,686
    
    
    $
    700
    (2)
    
    $
    
    
    
    $
    
    
    
    $
    78,386Year Ended December 31, 2003:Valuation reserve for deferred income tax assets
    
    $
    78,386
    
    
    $
    (8,751
    )(3)
    
    $
    (69,635
    ) (4)
    
    $
    
    
    
    $
    Year Ended December 31, 2004:Valuation reserve for deferred income tax assets
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    Valuation reserve recorded in the year ended December 31, 2001. See Note 11 of notes to
audited annual consolidated financial statements.(2)
    
    Valuation reserve recorded in the year ended December 31, 2002. See Note 11 of notes to
audited annual consolidated financial statements.(3)
    
    Valuation reserve recorded in the year ended December 31, 2003. See Note 11 of notes to
audited annual consolidated financial statements.(4)
    
    Full release of valuation reserve as of December 31, 2003. See Note 11 of notes to audited
annual consolidated financial statements. 77




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Report of Independent Registered Public Accounting Firm on
Financial Statement Schedule
 
    
 78