UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ------------------
                                   FORM 10 - Q

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

                For the quarterly period ended September 30, 1997
                                       or

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

               For the transition period from ________ to ________

                        Commission file number 001-13539
                              ---------------------

                                AMF BOWLING, INC.
             (Exact name of Registrant as specified in its charter)

           Delaware                                               13-3873268
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

                                 8100 AMF Drive
                            Richmond, Virginia 23111
          (Address of principal executive offices, including zip code)
                              --------------------
                                 (804) 730-4000
              (Registrant's telephone number, including area code)
                              --------------------

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

At November  14, 1997,  59,630,000  shares of common  stock,  par value $.01 per
share, of the Registrant were outstanding.



<PAGE>
<TABLE>

PART I
Item 1. Financial Statements

                                                 AMF BOWLING, INC. AND SUBSIDIARIES
                                               CONDENSED CONSOLIDATED BALANCE SHEETS
                                                 (in thousands, except share data)
<CAPTION>
<S> <C>
                                                                                           September 30,         December 31,
                                                                                               1997                  1996
                                                                                        -------------------- ---------------------
                                                                                            (unaudited)
   Assets
Current assets:
   Cash and cash equivalents                                                                       $ 31,937              $ 43,568
   Accounts and notes receivable, net of allowance for
     doubtful accounts of $4,376 and $4,492, respectively                                            80,919                42,625
   Inventories                                                                                       59,816                41,001
   Deferred taxes and other                                                                          14,449                11,178
                                                                                        -------------------- ---------------------
     Total current assets                                                                           187,121               138,372
Property and equipment, net                                                                         797,654               630,796
Deferred financing costs, net                                                                        38,476                40,595
Goodwill, net                                                                                       770,012               771,146
Other assets                                                                                         25,687                13,101
                                                                                        -------------------- ---------------------
   Total assets                                                                                 $ 1,818,950           $ 1,594,010
                                                                                        ==================== =====================

   Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                                                                $ 36,625              $ 31,563
   Accrued expenses                                                                                  53,590                54,357
   Income taxes payable                                                                               6,379                 2,276
   Note payable                                                                                      47,500                     -
   Long-term debt, current portion                                                                   45,500                42,376
                                                                                        -------------------- ---------------------
     Total current liabilities                                                                      189,594               130,572
Long-term debt                                                                                    1,207,978             1,048,877
Other long-term liabilities                                                                           4,312                 1,851
Deferred income taxes                                                                                 3,816                 3,895
                                                                                        -------------------- ---------------------
   Total liabilities                                                                              1,405,700             1,185,195
                                                                                        -------------------- ---------------------
Commitments and contingencies
Stockholders' equity:
   Common  stock  (par  value  $.01 per  share,  60,000,000  shares  authorized,
     44,005,000 issued and outstanding at September 30, 1997,
     42,375,000 issued and outstanding at December 31, 1996)                                            440                   424
   Paid-in capital                                                                                  464,110               429,026
   Retained deficit                                                                                 (41,897)              (19,484)
   Equity adjustment from foreign
     currency translation                                                                            (9,403)               (1,151)
                                                                                        -------------------- ---------------------
   Total stockholders' equity                                                                       413,250               408,815
                                                                                        -------------------- ---------------------

   Total liabilities and stockholders' equity                                                   $ 1,818,950           $ 1,594,010
                                                                                        ==================== =====================



             The  accompanying  notes are an  integral  part of these  condensed
consolidated balance sheets.

                                                                 2
<PAGE>


                                         AMF BOWLING, INC. AND SUBSIDIARIES
                                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                                    (unaudited)
                                       (in thousands, except per share data)
<CAPTION>
                                                                                                                       Predecessor
                                                                              AMF Bowling, Inc.                          Company
                                                       -----------------------------------------------------------   ---------------
                                                             Three Months Ended            Nine Months Ended           Four Months
                                                                 September 30,                 September 30,              Ended
                                                       ----------------------------- -----------------------------
                                                              1997           1996           1997         1996 (a)    April 30, 1996
                                                              ----           ----           ----         --------    --------------

Operating revenue                                          $ 187,526      $ 131,760      $ 505,594      $ 205,183       $ 164,944
                                                       -------------- -------------- -------------- --------------   -------------

Operating expenses:
   Cost of goods sold                                         64,396         44,998        150,480         68,511          43,118
   Bowling center operating expenses                          65,123         42,047        181,161         68,836          80,156
   Selling, general, and administrative expenses              17,054         12,503         47,226         19,875          35,557
   Depreciation and amortization                              23,387         17,882         66,811         29,636          15,097
                                                       -------------- -------------- -------------- --------------   -------------
     Total operating expenses                                169,960        117,430        445,678        186,858         173,928
                                                       -------------- -------------- -------------- --------------   -------------

     Operating income (loss)                                  17,566         14,330         59,916         18,325          (8,984)

Nonoperating expenses (income):
   Interest expense                                           31,727         26,284         89,181         50,157           4,504
   Other expenses, net                                         1,255            759          3,623          1,082             721
   Interest income                                              (453)          (438)        (1,579)        (4,220)           (611)
                                                       -------------- -------------- -------------- --------------   -------------
     Total nonoperating expenses                              32,529         26,605         91,225         47,019           4,614
                                                       -------------- -------------- -------------- --------------   -------------

     Loss before income taxes                                (14,963)       (12,275)       (31,309)       (28,694)        (13,598)
     Benefit for income taxes                                 (4,714)        (7,109)        (8,896)       (11,248)         (1,731)
                                                       -------------- -------------- -------------- --------------   -------------
     Net loss                                              $ (10,249)      $ (5,166)     $ (22,413)     $ (17,446)      $ (11,867)
                                                       ============== ============== ============== ==============   =============

Net loss per share                                           $ (0.24)       $ (0.13)       $ (0.53)       $ (0.45)
                                                       ============== ============== ============== ==============

Weighted average shares outstanding                           42,636         38,375         42,396         38,348
                                                       ============== ============== ============== ==============



(a)  For the  period  from  the  inception  date of  January  12,  1996  through
     September 30, 1996,  which  includes  results of operations of the acquired
     business from May 1, 1996 through September 30, 1996.


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

                                                         3
<PAGE>


                                         AMF BOWLING, INC. AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (unaudited)
                                                   (in thousands)
<CAPTION>
                                                                                                                       Predecessor
                                                                                                                         Company
                                                                                             AMF Bowling, Inc.         Four Months
                                                                                     Nine Months Ended September 30,      Ended
                                                                                    -------------------------------  --------------
                                                                                           1997         1996 (a)     April 30, 1996
                                                                                           ----         --------     --------------
Cash flows from operating activities:
  Net loss                                                                             $ (22,413)      $ (17,446)        $ (11,867)
  Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
    Depreciation and amortization                                                         66,811          29,636            15,097
    Deferred income taxes                                                                 (2,912)         (5,527)              414
    Amortization of bond discount                                                         25,507          16,866                 -
    Loss (gain) on the sale of property and equipment, net                                    96             (25)                -
    Changes in assets and liabilities:
      Accounts and notes receivable, net                                                 (35,326)        (17,281)            6,319
      Inventories                                                                        (19,857)         (2,488)           (3,631)
      Other assets                                                                       (18,206)        (51,905)           (1,068)
      Accounts payable and accrued expenses                                                4,992           8,133             8,713
      Income taxes payable                                                                 4,270           1,702            (5,745)
      Other long-term liabilities                                                         (1,506)            397            (1,605)
                                                                                    ------------- ---------------     -------------
   Net cash provided by (used in) operating activities                                     1,456         (37,938)            6,627
                                                                                    ------------- ---------------     -------------

Cash flows from investing activities:
  Acquisitions of operating units, net of cash acquired                                 (192,395)     (1,331,982)                -
  Purchases of property and equipment                                                    (42,589)         (7,886)           (6,874)
  Proceeds from the sale of property and equipment                                         3,644             849             2,989
                                                                                    ------------- ---------------     -------------
   Net cash used in investing activities                                                (231,340)     (1,339,019)           (3,885)
                                                                                    ------------- ---------------     -------------

Cash flows from financing activities:
  Proceeds from long-term debt, net of deferred financing costs                          210,000       1,034,930                 -
  Payment on long-term debt                                                              (25,782)         (9,550)           (3,812)
  Capital contributions                                                                   35,600         380,250            24,805
  Repurchase shares                                                                         (500)              -                 -
  Noncompete obligations                                                                    (478)           (575)              (36)
  Distributions to stockholders                                                                -               -           (36,721)
  Payments on notes payable - stockholders, net                                                -               -            24,668
                                                                                    ------------- ---------------     -------------
   Net cash provided by financing activities                                             218,840       1,405,055             8,904
                                                                                    ------------- ---------------     -------------
   Effect of exchange rates on cash                                                         (587)           (854)              535
                                                                                    ------------- ---------------     -------------
   Net (decrease) increase in cash                                                       (11,631)         27,244            12,181
   Cash and cash equivalents at beginning of period                                       43,568               -             9,732
                                                                                    ------------- ---------------     -------------
   Cash and cash equivalents at end of period                                           $ 31,937        $ 27,244          $ 21,913
                                                                                    ============= ===============     =============

</TABLE>


(a)  For the  period  from  the  inception  date of  January  12,  1996  through
     September 30, 1996, which includes cash flows of the acquired business from
     May 1, 1996 through September 30, 1996.


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

                                                         4
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Organization

The accompanying  unaudited condensed  consolidated financial statements reflect
all  adjustments  (consisting of normal  recurring  accruals)  which are, in the
opinion of  management,  necessary  for a fair  presentation  of the  results of
operations and financial position for the interim periods. The interim financial
information  and notes thereto should be read in conjunction  with the April 30,
1996, and December 31, 1995 audited combined financial statements of AMF Bowling
Group (the "Predecessor Company") and the December 31, 1996 audited consolidated
financial statements of AMF Bowling, Inc. and subsidiaries presented in the Form
S-1  Registration   Statement  filed  with  the  U.S.  Securities  and  Exchange
Commission on August 21, 1997 (see "Note 7. Stockholders'  Equity"). The results
of  operations  for the three months and nine months ended  September  30, 1997,
respectively,  are not necessarily  indicative of results to be expected for the
entire year.

AMF Bowling,  Inc.  ("AMF  Bowling")  changed its name from AMF Holdings Inc. in
1997. AMF Bowling and its  subsidiaries  (collectively,  the "Company" or "AMF")
are  principally  engaged  in two  business  segments:  (i)  the  ownership  and
operation of bowling  centers,  consisting  of 352 U.S.  bowling  centers and 87
international  bowling centers ("Bowling Centers") as of September 30, 1997, and
(ii) the  manufacture and  distribution  of bowling  equipment such as automatic
pinspotters,  automatic  scoring  equipment,  bowling pins, lanes, ball returns,
certain spare and replacement  parts,  and the resale of allied products such as
bowling  balls,  bags,  shoes,  and certain  other spare and  replacement  parts
("Bowling  Products").  The principal markets for bowling equipment are U.S. and
international bowling center operators.

AMF  Bowling   Worldwide,   Inc.,   formerly  named  AMF  Group  Inc.  ("Bowling
Worldwide"), is a wholly owned subsidiary of AMF Group Holdings Inc. ("AMF Group
Holdings").  AMF Group Holdings is a wholly owned subsidiary of AMF Bowling. AMF
Group Holdings and Bowling Worldwide are Delaware  corporations  organized by GS
Capital  Partners II, L.P., and certain other  investment  funds  (collectively,
"GSCP")  affiliated with Goldman,  Sachs & Co.  ("Goldman  Sachs") to effect the
Acquisition  (defined  below).  AMF Group  Holdings  and AMF Bowling are holding
companies  only.  The primary  assets in each are  comprised of  investments  in
direct and/or indirect subsidiaries.

Pursuant to a Stock  Purchase  Agreement  dated  February 16, 1996,  between AMF
Group Holdings and the stockholders (the "Sellers") of the Predecessor  Company,
on May 1, 1996 (the "Closing Date"), AMF Group Holdings acquired the Predecessor
Company through a stock purchase by AMF Group Holdings'  subsidiaries of all the
outstanding  stock  of the  separate  domestic  and  foreign  corporations  that
constituted  substantially  all of  the  Predecessor  Company  and  through  the
purchase of certain of the assets of the  Predecessor  Company's  bowling center
operations in Spain and Switzerland (the "Acquisition").  AMF Group Holdings did
not  acquire  the assets of two  bowling  centers  located in Madrid,  Spain and
Geneva, Switzerland (both of which were retained by the Sellers).

The purchase price for the Acquisition  was  approximately  $1.37 billion,  less
approximately  $2.0 million  representing debt of the Predecessor  Company which
remained in place following the closing of the Acquisition.  The Acquisition was
accounted  for by the  purchase  method  of  accounting,  pursuant  to which the
purchase  price was  allocated  among the  acquired  assets and  liabilities  in
accordance with estimates of fair market value on the date of acquisition.


                                       5
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 2.  Significant Accounting Policies

Basis of Presentation

The  condensed  consolidated  results of  operations  of AMF  Bowling  have been
presented  for the three  months  and nine  months  ended  September  30,  1997,
respectively, the three months ended September 30, 1996, and the period from the
inception date of January 12, 1996 through September 30, 1996. Additionally, the
combined  results of operations of the  Predecessor  Company for the four months
ended April 30, 1996, have been presented. All significant intercompany balances
and transactions have been eliminated in the accompanying condensed consolidated
financial  statements.  All  dollar  amounts  are  in  thousands,  except  where
otherwise indicated.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting  period.  The
estimates  made by  management  include  allowances  for obsolete  inventory and
uncollectible  accounts  receivable,  realization of goodwill and other deferred
assets, litigation and claims, product warranty costs, and self-insurance costs.
Actual results could differ from those estimates.

Goodwill

As a result of the  Acquisition  and  subsequent  purchases  of bowling  centers
discussed in "Note 10. Acquisitions", and in accordance with the purchase method
of accounting for the Acquisition,  the Company recorded  goodwill  representing
the excess of the purchase price over the allocation  among the acquired  assets
and  liabilities in accordance  with estimates of fair market value on the dates
of acquisition.  Goodwill is being amortized over 40 years. Amortization expense
was $4,958 and $14,818 for the three months and nine months ended  September 30,
1997, and $4,944 and $8,197 for the three months and period ended  September 30,
1996, respectively. Accumulated amortization at September 30, 1997 was $27,888.


                                       6
<PAGE>

                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 3. Pro Forma Results of Operations (unaudited) (in millions)

Pro forma  statements  of income for the Company are  presented on the following
pages for the nine months ended September 30, 1996, as if the acquisition of the
Predecessor  Company had occurred on January 1, 1996.  AMF  Bowling's  pro forma
statement of income for the nine months ended  September  30, 1996,  is based on
the  Predecessor  Company's  statement of income for the four months ended April
30, 1996,  AMF  Bowling's  statement of income for the period from the inception
date of January 12, 1996  through  September  30,  1996 and  adjustments  giving
effect to the  Acquisition  under the purchase method of accounting as described
in the notes below. The pro forma results are for illustrative purposes only and
do not purport to be indicative of the actual  results which  occurred,  nor are
they indicative of future results of operations.
<TABLE>
<CAPTION>
<S> <C>
                                                                                                                   Pro Forma
                                                                             Predecessor                               AMF
                                                         AMF                   Company                            Bowling, Inc.
                                                    Bowling, Inc.            Four Months                           Nine Months
                                                     Period Ended               Ended         Pro Forma               Ended
                                                September 30, 1996 (a)     April 30, 1996    Adjustments        September 30, 1996
                                                ----------------------     --------------    -----------        ------------------

Operating revenue:                                      $ 205.2                 $ 164.9          $ (0.8)(b)             $ 369.3
                                                     ----------              ----------       ---------              ----------

Operating expenses:
   Cost of goods sold                                      68.6                    43.1            (0.2)(b)               111.5
   Bowling center operating expenses                       68.8                    80.2           (24.4)(b)(c)            124.6
   Selling, general, and administrative expenses           19.9                    35.5           (20.2)(b)(c)             35.2
   Depreciation and amortization                           29.6                    15.1             8.0 (d)                52.7
                                                     ----------              ----------       ---------              ----------
     Total operating expenses                             186.9                   173.9           (36.8)                  324.0
                                                     ----------              ----------       ---------              ----------

     Operating income (loss)                               18.3                    (9.0)           36.0                    45.3

Nonoperating expenses:
   Interest expense                                        50.1                     4.5            23.9 (e)                78.5
   Other expenses, net                                      1.1                     0.7             -                       1.8
   Interest income                                         (4.2)                   (0.6)            -                      (4.8)
                                                     ----------              ----------       ---------              ----------
Income (loss) before income taxes                         (28.7)                  (13.6)           12.1                   (30.2)
Provision (benefit) for income taxes                      (11.3)                   (1.7)            1.5 (f)               (11.5)
                                                     ----------              ----------       ---------              ----------
     Net income (loss)                                  $ (17.4)                $ (11.9)         $ 10.6                 $ (18.7)
                                                     ==========              ==========       =========              ==========
Net loss per share                                                                                                      $ (0.49)
                                                                                                                     ==========
</TABLE>

(a)  For the  period  from  the  inception  date of  January  12,  1996  through
     September  30,  1996,  which  includes  the  results of  operations  of the
     acquired business from May 1, 1996 through September 30, 1996.
(b)  To reflect the impact of AMF Group Holdings not acquiring the operations of
     one bowling center in Switzerland and one bowling center in Spain.
(c)  To  eliminate a one-time  charge of $44.0  million for special  bonuses and
     payments made by the Sellers in April 1996.
(d)  To reflect the increase in depreciation and  amortization  expense from the
     allocation of the purchase  price to fixed assets and goodwill and a change
     in the method of  depreciation  of fixed assets.  The  Predecessor  Company
     principally used the double declining balance method. The amount of the pro
     forma adjustment for  depreciation  was determined using the  straight-line
     method over the estimated lives of the assets  acquired.  Goodwill is being
     amortized over 40 years.
(e)  To reflect the incremental interest expense associated with the issuance of
     debt which partially funded the Acquisition.
(f)  To give  effect  to the  change in  status  of the U.S.  and  international
     subsidiaries  of AMF Bowling from S  corporations  to taxable  corporations
     under the Internal Revenue Code upon consummation of the Acquisition.


                                       7
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 4.   Inventories

Inventories  at  September  30,  1997,  and  December  31,  1996  consist of the
following:

                                            September 30,     December 31,
                                                 1997             1996
                                           ----------------- ---------------
                                              (unaudited)
Bowling Products, at FIFO:
   Raw materials                                   $ 14,986        $ 11,683
   Work in progress                                   3,111           2,335
   Finished goods and spare parts                    36,551          23,195
Bowling Centers, at average cost:
   Merchandise inventory                              5,168           3,788
                                           ----------------- ---------------
                                                   $ 59,816        $ 41,001
                                           ================= ===============


Note 5.   Property and Equipment

Property and equipment at September 30, 1997, and December 31, 1996, consists of
the following:

                                                September 30,     December 31,
                                                    1997              1996
                                                --------------    -------------
                                                  (unaudited)
Land                                                 $ 111,400        $ 90,512
Buildings and improvements                             330,074         265,461
Equipment, furniture, and fixtures                     426,376         304,067
Other                                                    8,495           2,631
                                                --------------    -------------
                                                       876,345         662,671
Less: accumulated depreciation and amortization        (78,691)        (31,875)
                                                --------------    -------------
                                                     $ 797,654       $ 630,796
                                                ==============    =============



Depreciation  and  amortization  expense  related to property and  equipment was
$46,816  and  $19,309 for the nine  months  ended  September  30, 1997 and 1996,
respectively.

Note 6. Long-Term Debt

Long-term  debt at  September  30, 1997,  and December 31, 1996  consists of the
following:

                                              September 30,      December 31,
                                                   1997              1996
                                              --------------- ----------------
                                               (unaudited)
Bank debt                                          $ 748,843        $ 564,625
Exchange senior subordinated notes                   250,000          250,000
Exchange senior subordinated discount notes          300,168          274,663
Mortgage and equipment notes                           1,967            1,965
                                              --------------- ----------------
   Total debt                                      1,300,978        1,091,253
Current maturities                                   (93,000)         (42,376)
                                              --------------- ----------------
   Total long-term debt                          $ 1,207,978      $ 1,048,877
                                              =============== ================


                                       8

<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In connection with the Offering (as hereinafter  defined)  discussed in "Note 7.
Stockholders'  Equity",  the credit agreement which underlies the bank debt (the
"Credit  Agreement")  was amended and restated,  effective  November 7, 1997, to
increase the flexibility and borrowing capacity of Bowling  Worldwide's  ongoing
acquisition  program.  The amendment and  restatement,  among other things,  (i)
converted the Acquisition  Facilities and a portion of the Term Facilities under
the  Credit  Agreement  into  a  non-amortizing  Working  Capital  Facility  and
increased the aggregate size of the resulting  facility to $355.0 million,  (ii)
extended the final maturity of the Working  Capital  Facility and certain of the
Term  Facilities,  (iii) reduced the interest rates under the Credit  Agreement,
(iv) amended  certain  covenants  contained  in the Credit  Agreement to provide
Bowling Worldwide and its subsidiaries with additional operating flexibility and
(v)  permitted  a portion  of the  proceeds  of the  Offering  to be  applied to
repayment  of  the  exchange   senior   subordinated   discount  notes  ("Senior
Subordinated  Discount  Notes") and/or exchange senior  subordinated  notes (the
"Senior Subordinated Notes" and, together with the Senior Subordinated  Discount
Notes, the "Notes").

The Company will incur after-tax extraordinary charges totaling $22.7 million in
the fourth  quarter of 1997 arising from the  amendment and  restatement  of the
Credit  Agreement and the resulting  write-off of costs  previously  incurred to
obtain bank  financing  for the  Acquisition,  the premium  associated  with the
portion of the Senior  Subordinated  Discount Notes expected to be redeemed with
the  proceeds  of the  Offering  and the  write-off  of the  portion of deferred
financing costs attributable to the Discount Notes expected to be so redeemed.
See "Note 7. Stockholders' Equity".

Deferred Financing Costs

Costs  incurred  to obtain  bank  financing  and issue  bond  financing  for the
Acquisition  are  amortized  over the lives of the various  types of debt.  Bank
financing  costs are  amortized  over eight years and bond  financing  costs are
amortized over ten years using the effective  interest rate method.  An interest
rate cap agreement  included in deferred  financing  costs is amortized over the
term of the agreement  beginning  November 1, 1996, and ending October 31, 1998.
Amortization  expense  for  financing  costs was $1,222 and $3,752 for the three
months and nine months ended  September 30, 1997,  and $1,126 and $2,078 for the
three months and period ended September 30, 1996, respectively. Interest expense
for the interest rate cap agreement was $455 and $1,366 for the three months and
nine months ended September 30, 1997, respectively.

In July 1997,  Bowling  Worldwide entered into an interest rate cap agreement to
reduce the interest  rate risk of its Senior Debt.  The notional  amount of this
cap is $100.0  million.  Under the terms of this  agreement,  Bowling  Worldwide
receives payment if the three-month LIBOR rises above 7.00 percent through March
31, 1998.


Note 7.  Stockholders' Equity

In  September  1997,  AMF  Bowling's  institutional  stockholders  purchased  an
aggregate  of  1,780,000  shares of its common  stock for $20.00 per share.  The
aggregate  proceeds of $35.6 million were used in part to fund  acquisitions and
for other corporate purposes.

On  August  21,  1997,  AMF  Bowling  filed a  registration  statement  with the
Securities  and  Exchange   Commission  for  an  initial  public  offering  (the
"Offering") of common stock. On November 7, 1997, AMF Bowling issued  15,525,000
shares of its common stock at $19.50 per share pursuant to the Offering. The net
proceeds of the Offering,  estimated to be  approximately  $281.4  million after
deducting the underwriting discount and expenses payable by AMF Bowling, will be
used to repay  indebtedness  under the Credit Agreement of Bowling Worldwide and
to redeem a portion of the Notes of Bowling Worldwide.


                                       9
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 8.  Commitments and Contingencies

Litigation and Claims

The  Company is  involved in certain  lawsuits  arising  out of normal  business
operations.  The  majority  of these  relate to  accidents  at bowling  centers.
Management believes that the ultimate resolution of such matters will not have a
material  adverse  effect on the  Company's  results of  operations or financial
position.  While the ultimate  outcome of the  litigation and claims against the
Company cannot presently be determined, management believes the Company has made
adequate provision for possible losses.


Note 9.  Employee Benefit Plans

The total  number of options to  purchase  shares of AMF  Bowling  common  stock
("Stock  Options")  currently  reserved and  available  for grant under the 1996
Stock Incentive Plan (the "Stock  Incentive  Plan") is 1,767,151.  The number of
Stock Options outstanding to senior management,  other employees,  and directors
at September 30, 1997,  after giving effect to forfeited  Stock  Options,  total
1,668,000 at an exercise price of $10.00 per share. In addition to Stock Options
outstanding under the Stock Incentive Plan,  130,000 Stock Options granted to an
officer were outstanding at September 30, 1997.

Note 10.   Acquisitions

Between  January 1, 1997 and  September  30,  1997,  the  Company  purchased  an
aggregate  of 94  centers  in the  United  States,  seven  centers in the United
Kingdom,  two centers in Australia,  and certain  related assets and liabilities
from several  unrelated  sellers.  The total  purchase  price was  approximately
$192.4 million,  including  certain  adjustments and transaction  costs, and was
funded with $162.5 million from available  borrowings under the Credit Agreement
and  the  remainder  from  internally   generated  cash.  As  a  result  of  the
acquisitions, and after giving effect to the closing of six centers in 1997, the
Company operated 352 U.S.  centers and 87 international  centers as of September
30, 1997.

Commencing  October 31,  1997,  the Company is leasing and  operating a chain of
eight bowling  centers (the "Pin Boys  Centers") for a period ending  January 6,
1998, at which time the Company will purchase the personal property of the eight
centers and real estate relating to six of such centers for approximately  $18.8
million.  The Company  will  continue to lease and operate the two centers  with
respect to which real property will not be acquired.

The Company has signed letters of intent and/or entered into purchase agreements
regarding  the  acquisition  of eighteen  U.S.  centers,  including the Pin Boys
Centers,  from  several  unrelated  sellers.  The  aggregate  purchase  price is
expected  to be  approximately  $38.5  million and is expected to be funded with
available  borrowings  under the Working Capital  Facility under the amended and
restated Credit Agreement, and with internally generated cash.

In August  1997,  the Company  entered  into a joint  venture  arrangement  with
Playcenter S.A., a Sao Paulo,  Brazil-based  amusement and entertainment company
("Playcenter"). Pursuant to the arrangement, the joint venture, owned 50% by the
Company and 50% by Playcenter,  is expected to build or assume ownership of, and
operate,  up to 39 bowling centers, in Brazil and Argentina during the next four
years. The Company will be the exclusive equipment supplier to the joint venture
and expects its total  investment in the joint venture to be  approximately  $14
million.

On October 20, 1997,  AMF Bowling  Centers,  Inc.  acquired  Michael Jordan Golf
Company,  Inc., a company  formed to build and operate golf  practice  ranges in
select  U.S.  locations.  In  addition,   Michael  Jordan  agreed  to  become  a
spokesperson  for and endorser of AMF bowling centers and bowling products under
a personal services contract which grants the Company rights to use Mr. Jordan's
image and name in advertising and marketing campaigns.

                                       10
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 11.  Business Segments

The Company operates in two major lines of business:  operating  bowling centers
and  manufacturing  of bowling  and  related  products.  Information  concerning
operations in these businesses for the three months ended September 30, 1997 and
1996, respectively, is presented below (in millions): 
<TABLE> 
<CAPTION> 
<S> <C>
                                                                        AMF Bowling, Inc.
                                      ----------------------------------------------------------------------------------------
                                                              Three Months Ended September 30, 1997

                                              Bowling Centers               Bowling Products
                                       ------------------------------- ----------------------------
                                                  Inter-      Sub-               Inter-    Sub-                 Elim-
                                         U.S.    national    total       U.S.   national   total    Corporate  inations    Total
                                         ----    --------    -----       ----   --------   -----    ---------  --------    -----
Revenue from unaffiliated customers     $ 69.4    $ 27.4     $ 96.8    $ 34.4   $ 56.3    $ 90.7      $ -       $ -      $ 187.5
Intersegment sales                         -         -          -         1.8      1.7       3.5        -         -          3.5
Operating income (loss)                   (1.3)      3.3        2.0      13.8      5.3      19.1       (3.6)      -         17.5
Depreciation and amortization             14.2       4.8       19.0       4.5      0.2       4.7        -        (0.3)      23.4
Capital expenditures                      11.9       1.7       13.6       1.7      0.1       1.8        1.8      (0.2)      17.0
Research and development expense           -         -          -         0.3      -         0.3        -         -          0.3

                                                                        AMF Bowling, Inc.
                                      ---------------------------------------------------------------------------------------------
                                                              Three Months Ended September 30, 1996

                                              Bowling Centers               Bowling Products
                                       ------------------------------- ----------------------------
                                                  Inter-      Sub-               Inter-    Sub-                 Elim-
                                         U.S.    national    total       U.S.   national   total    Corporate  inations    Total
                                         ----    --------    -----       ----   --------   -----    ---------  --------    -----
Revenue from unaffiliated customers     $ 39.4    $ 26.0     $ 65.4    $ 31.2   $ 35.2    $ 66.4      $ -       $ -      $ 131.8
Intersegment sales                         -         -          -         1.0      1.4       2.4        -         -          2.4
Operating income (loss)                   (1.3)      3.1        1.8      11.7      2.7      14.4       (2.1)      0.2       14.3
Depreciation and amortization              8.9       4.7       13.6       4.5      0.2       4.7        -        (0.4)      17.9
Capital expenditures                       2.6       1.5        4.1       0.2      0.4       0.6        0.1      (0.2)       4.6
Research and development expense           -         -          -         1.1      -         1.1        -         -          1.1
</TABLE>

                                       11
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Information concerning operation of bowling centers and manufacturing of bowling
and related products for the nine months ended September 30, 1997 and the period
ended September 30, 1996, respectively, is presented below (in millions):
<TABLE>
<CAPTION>
<S> <C>
                                                                         AMF Bowling, Inc.
                                      ----------------------------------------------------------------------------------------------
                                                                Nine Months Ended September 30, 1997

                                               Bowling Centers               Bowling Products
                                        ------------------------------- ----------------------------
                                                   Inter-      Sub-               Inter-    Sub-                 Elim-
                                          U.S.    national    total       U.S.   national   total    Corporate  inations    Total
                                          ----    --------    -----       ----   --------   -----    ---------  --------    -----
Revenue from unaffiliated customers      $ 218.1    $ 79.8    $ 297.9    $ 82.1  $ 125.6   $ 207.7      $ -       $ -      $ 505.6
Intersegment sales                           -         -          -         7.1      4.1      11.2        -         -         11.2
Operating income (loss)                     21.5       9.2       30.7      29.9     10.6      40.5      (12.0)      0.7       59.9
Identifiable assets                        795.0     307.0    1,102.0     646.2     52.8     699.0       17.2       0.8    1,819.0
Depreciation and amortization               39.3      14.0       53.3      13.8      0.8      14.6        -        (1.1)      66.8
Capital expenditures                        30.9       4.7       35.6       3.6      0.5       4.1        3.3      (0.4)      42.6
Research and development expense             -         -          -         1.0      -         1.0        -         -          1.0

                                                                         AMF Bowling, Inc.
                                      ----------------------------------------------------------------------------------------------
                                                                  Period Ended September 30, 1996

                                               Bowling Centers               Bowling Products
                                        ------------------------------- ----------------------------
                                                   Inter-      Sub-               Inter-    Sub-                 Elim-
                                          U.S.    national    total       U.S.   national   total    Corporate  inations    Total
                                          ----    --------    -----       ----   --------   -----    ---------  --------    -----
Revenue from unaffiliated customers      $ 62.8    $ 42.2    $ 105.0    $ 46.8   $ 53.4   $ 100.2      $ -       $ -      $ 205.2
Intersegment sales                          -         -          -         1.7      2.7       4.4        -         -          4.4
Operating income (loss)                    (4.5)      5.4        0.9      17.3      3.9      21.2       (3.8)      -         18.3
Depreciation and amortization              15.0       7.3       22.3       7.6      0.3       7.9        -        (0.6)      29.6
Capital expenditures                        4.1       3.2        7.3       0.4      0.6       1.0        0.1      (0.5)       7.9
Research and development expense            -         -          -         2.2      -         2.2        -         -          2.2

                                                                        Predecessor Company
                                      ----------------------------------------------------------------------------------------------
                                                                  Four Months Ended April 30, 1996

                                               Bowling Centers               Bowling Products
                                        ------------------------------- ----------------------------
                                                   Inter-      Sub-               Inter-    Sub-                 Elim-
                                          U.S.    national    total       U.S.   national   total    Corporate  inations    Total
                                          ----    --------    -----       ----   --------   -----    ---------  --------    -----
Revenue from unaffiliated customers      $ 75.0    $ 33.5    $ 108.5    $ 27.7   $ 28.7    $ 56.4      $ -       $ -      $ 164.9
Intersegment sales                          -         -          -         3.4      1.2       4.6        -         -          4.6
Operating income (loss)                     4.8      (2.5)       2.3      (5.3)    (3.1)     (8.4)      (2.4)     (0.5)      (9.0)
Depreciation and amortization              11.8       2.5       14.3       1.0      0.2       1.2        -        (0.4)      15.1
Capital expenditures                        5.1       2.3        7.4       0.4      -         0.4        -        (0.9)       6.9
Research and development expense            -         -          -         0.8      -         0.8        -         -          0.8
</TABLE>




                                       12
<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


Note 12. Recent Accounting Pronouncements

Effective for the fiscal year ended  December 31, 1997,  the Company is required
to adopt Statement of Financial  Accounting Standards ("SFAS") No. 128 "Earnings
Per Share" and SFAS No. 129 "Disclosure of Information About Capital Structure."
Effective for the fiscal year ended  December 31, 1998,  the Company is required
to  adopt  SFAS No.  130  "Reporting  Comprehensive  Income"  and  SFAS No.  131
"Disclosures  About  Segments of an  Enterprise  and Related  Information."  The
Company does not expect that  adoption of these  standards  will have a material
impact on the  Company's  financial  position  or  results  of  operations.  The
adoption of SFAS No. 130 by the Company  will  require  reporting  comprehensive
income,  which  includes  the foreign  currency  translation  adjustment,  in an
alternative format prescribed by the standard.


Note 13.  Consolidating Financial Statements

The following consolidating financial information presents:

  o      Consolidating balance sheet as of September 30, 1997, and consolidating
         statements of income and cash flows for the nine months ended September
         30, 1997.
  o      Elimination  entries necessary  to combine the entities  comprising AMF
         Bowling.

The  Exchange  Notes  are  jointly  and  severally  guaranteed  on  a  full  and
unconditional  basis by AMF Group  Holdings  and by the first-  and  second-tier
subsidiaries of Bowling Worldwide.  Third-tier subsidiaries of Bowling Worldwide
have not provided guarantees.

                                       13
<PAGE>
<TABLE>

                                            AMF BOWLING, INC. AND SUBSIDIARIES
                            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                            AMF BOWLING, INC. AND SUBSIDIARIES
                                                CONSOLIDATING BALANCE SHEET
                                                 As of September 30, 1997
                                                        (unaudited)
                                                      (in thousands)

<CAPTION>
<S> <C>
                                                                          Non-
                                                     Guarantor         Guarantor
                                                     Companies         Companies         Eliminations         Consolidated
                                                     ---------         ---------         ------------         ------------
  Assets
Current assets:
  Cash and cash equivalents                           $ 30,439           $ 1,498                 $ -             $ 31,937
  Accounts and notes receivable, net
     of allowance for doubtful accounts                 79,418             1,501                   -               80,919
  Accounts receivable - intercompany                     3,748             4,854              (8,602)                   -
  Inventories                                           57,454             2,362                   -               59,816
  Deferred taxes and other                              12,281             2,168                   -               14,449
                                              ----------------- -----------------  ------------------  -------------------
   Total current assets                                183,340            12,383              (8,602)             187,121
Notes receivable - intercompany                         14,673            10,663             (25,336)                   -
Property and equipment, net                            758,779            37,905                 970              797,654
Investment in subsidiaries                              23,200                 -             (23,200)                   -
Goodwill and other assets                              827,896             6,279                   -              834,175
                                              ----------------- -----------------  ------------------  -------------------
  Total assets                                     $ 1,807,888          $ 67,230           $ (56,168)         $ 1,818,950
                                              ================= =================  ==================  ===================

  Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                                    $ 33,604           $ 3,021                 $ -             $ 36,625
  Accounts payable - intercompany                          862             7,740              (8,602)                   -
  Accrued expenses                                      48,596             4,994                   -               53,590
  Income taxes payable                                   4,371             2,008                   -                6,379
  Note payable                                          47,500                 -                   -               47,500
  Long-term debt, current  portion                      45,500                 -                   -               45,500
                                              ----------------- -----------------  ------------------  -------------------
   Total current liabilities                           180,433            17,763              (8,602)             189,594
Long-term debt                                       1,207,978                 -                   -            1,207,978
Notes payable - intercompany                                 -            25,336             (25,336)                   -
Other long-term liabilities                              4,312                 -                   -                4,312
Deferred income taxes                                    2,869             1,020                   -                3,889
                                              ----------------- -----------------  ------------------  -------------------
  Total liabilities                                  1,395,519            44,119             (33,938)           1,405,700
                                              ----------------- -----------------  ------------------  -------------------
Commitments and contingencies
Stockholders' equity:
  Common stock                                             440             4,028              (4,028)                 440
  Paid-in capital                                      462,192            24,522             (22,604)             464,110
  Retained earnings (deficit)                          (40,808)            2,631              (3,720)             (41,897)
  Equity adjustment from foreign
   currency translation                                 (9,455)           (8,070)              8,122               (9,403)
                                              ----------------- -----------------  ------------------  -------------------
  Total stockholders' equity                           412,369            23,111             (22,230)             413,250
                                              ----------------- -----------------  ------------------  -------------------

  Total liabilities and stockholders' equity       $ 1,807,888          $ 67,230           $ (56,168)         $ 1,818,950
                                              ================= =================  ==================  ===================





                                                                 14
<PAGE>


                                                 AMF BOWLING, INC. AND SUBSIDIARIES
                                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                                 AMF BOWLING, INC. AND SUBSIDIARIES
                                                  CONSOLIDATING STATEMENT OF INCOME
                                            For the Nine Months Ended September 30, 1997
                                                             (unaudited)
                                                           (in thousands)

<CAPTION>
                                                                          Non-
                                                          Guarantor     Guarantor
                                                          Companies     Companies      Eliminations    Consolidated
                                                          ---------     ---------      ------------    ------------

Operating revenue                                         $ 476,602      $ 30,523         $ (1,531)       $ 505,594
                                                       ------------- -------------  ---------------  ---------------

Operating expenses:
   Cost of goods sold                                       147,291         4,213           (1,024)         150,480
   Bowling center operating expenses                        165,009        16,518             (366)         181,161
   Selling, general, and administrative expenses             44,957         2,269                -           47,226
   Depreciation and amortization                             62,428         4,543             (160)          66,811
                                                       ------------- -------------  ---------------  ---------------
    Total operating expenses                                419,685        27,543           (1,550)         445,678
                                                       ------------- -------------  ---------------  ---------------

    Operating income                                         56,917         2,980               19           59,916

Nonoperating expenses (income):
   Interest expense                                          88,714           467                -           89,181
   Other expense, net                                           762         1,534            1,327            3,623
   Interest income                                           (1,439)         (140)               -           (1,579)
   Equity in earnings of subsidiaries                           784             -             (784)               -
                                                       ------------- -------------  ---------------  ---------------
    Total nonoperating expenses                              88,821         1,861              543           91,225
                                                       ------------- -------------  ---------------  ---------------

    Income (loss) before income taxes                       (31,904)        1,119             (524)         (31,309)
    Provision (benefit) for income taxes                    (10,799)        1,903                -           (8,896)
                                                       ------------- -------------  ---------------  ---------------
    Net loss                                              $ (21,105)       $ (784)          $ (524)       $ (22,413)
                                                       ============= =============  ===============  ===============


                                                          15

<PAGE>


                                            AMF BOWLING, INC. AND SUBSIDIARIES
                            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

                                            AMF BOWLING, INC. AND SUBSIDIARIES
                                           CONSOLIDATING STATEMENT OF CASH FLOWS
                                       For the Nine Months Ended September 30, 1997
                                                        (unaudited)
                                                      (in thousands)
<CAPTION>
                                                                                       Non-
                                                                      Guarantor     Guarantor
                                                                      Companies     Companies    Eliminations Consolidated
                                                                      ---------     ---------    ------------ ------------
  Cash flows from operating activities:
   Net loss                                                            $ (21,105)      $ (784)      $ (524)     $ (22,413)
   Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities:
      Depreciation and amortization                                       62,461        4,543         (193)        66,811
      Deferred income taxes                                               (2,912)           -            -         (2,912)
      Amortization of bond discount                                       25,507            -            -         25,507
      Equity in earnings of subsidiaries                                    (784)           -          784              -
      Loss on the sale of property and equipment, net                         96            -            -             96
      Changes in assets and liabilities:
       Accounts and notes receivable                                     (35,108)        (218)           -        (35,326)
       Receivables and payables - affiliates                             (14,422)      14,422            -              -
       Inventories                                                       (19,326)        (531)           -        (19,857)
       Other assets                                                      (15,697)      (1,003)      (1,506)       (18,206)
       Accounts payable and accrued expenses                               3,484        1,508            -          4,992
       Income taxes payable                                                3,144        1,126            -          4,270
       Other long-term liabilities                                        (1,506)           -            -         (1,506)
                                                                      -----------  ----------- ------------ --------------
     Net cash provided by (used in) operating activities                 (16,168)      19,063       (1,439)         1,456
                                                                      -----------  ----------- ------------ --------------

  Cash flows from investing activities:
   Acquisitions of operating units, net of cash acquired                (175,674)     (16,721)           -       (192,395)
   Purchases of property and equipment                                   (40,564)      (2,137)         112        (42,589)
   Proceeds from sale of property and equipment                            3,644            -            -          3,644
                                                                      -----------  ----------- ------------ --------------
     Net cash provided by (used in) investing activities                (212,594)     (18,858)         112       (231,340)
                                                                      -----------  ----------- ------------ --------------

  Cash flows from financing activities:
   Proceeds from long-term debt, net of deferred financing costs         210,000            -                     210,000
   Payment on long-term debt                                             (25,782)           -            -        (25,782)
   Capital Contribution                                                   35,512           88            -         35,600
   Repurchase shares                                                        (500)           -            -           (500)
   Dividend to Parent                                                          -       (1,327)       1,327              -
   Noncompete obligations                                                   (478)           -            -           (478)
                                                                      -----------  ----------- ------------ --------------
     Net cash provided by (used in) financing activities                 218,752       (1,239)       1,327        218,840
                                                                      -----------  ----------- ------------ --------------
     Effect of exchange rates on cash                                        772       (1,359)           -           (587)
                                                                      -----------  ----------- ------------ --------------
     Net decrease in cash                                                 (9,238)      (2,393)           -        (11,631)
     Cash and cash equivalents at beginning of period                     39,677        3,891            -         43,568
                                                                      ===========  =========== ============ ==============
     Cash and cash equivalents at end of period                         $ 30,439      $ 1,498          $ -       $ 31,937
                                                                      ===========  =========== ============ ==============
</TABLE>




                                                                 16
<PAGE>


Item 2.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
                                   OPERATIONS

Information in this report contains certain  forward-looking  statements,  which
are  statements  other than  historical  information  or  statements  of current
condition.  Some  forward-looking  statements  may be identified by use of terms
such as "believes", "anticipates",  "intends", or "expects". The forward-looking
statements  contained in this report are  generally  located in the material set
forth under the  heading  "Management's  Discussion  and  Analysis of  Financial
Condition   and  Results  of   Operations"   and  "Legal   Proceedings".   These
forward-looking statements relate to the plans and objectives of the Company for
future  operations.  In light of the risks  and  uncertainties  inherent  in all
future projections,  the inclusion of forward-looking  statements in this report
should not be regarded as a  representation  by the Company or any other  person
that the  objectives  or plans of the Company will  actually be  achieved.  Many
factors could cause the Company's actual results to differ materially from those
in the  forward-looking  statements,  including,  among  other  things:  (i) the
Company's ability to identify and successfully execute acquisition opportunities
and to integrate  acquired  operations  into its  business,  (ii) the  continued
development  and growth of new  bowling  markets  and the  Company's  ability to
continue to identify  those  markets and to generate  sales of products in those
markets before market  saturation,  (iii) the risk of adverse  political acts or
developments in the Company's  existing or proposed  markets for its products or
in which it operates its bowling centers,  (iv) the Company's  ability to retain
experienced  senior  management,   (v)  the  ability  of  the  Company  and  its
subsidiaries  to  generate  sufficient  cash flow in a timely  manner to satisfy
principal and interest payments on their  indebtedness,  and (vi) the popularity
of bowling as an activity in the United States and abroad.  In addition,  actual
results may also  differ  materially  from  forward-looking  statements  in this
report as a result of  factors  generally  applicable  to  companies  in similar
businesses,  among other things:  (i) a decline in general economic  conditions,
(ii) an adverse  judgment in pending or future  litigation,  and (iii) increased
competitive  pressure from current  competitors and future market entrants.  The
foregoing review of important  factors should not be construed as exhaustive and
should be read in conjunction with other cautionary statements that are included
in this report.  The Company  undertakes no  obligation to release  publicly the
results of any future  revisions it may make to  forward-looking  statements  to
reflect  events  or  circumstances  after  the date  hereof  or to  reflect  the
occurrence of unanticipated events.

Background

This discussion should be read in conjunction with the "Selected Financial Data"
and the  Condensed  Consolidated  Financial  Statements  (unaudited)  and  Notes
thereto included elsewhere within this report.

Management  believes that a comparison of the results of operations for the nine
months ended September 30, 1997 on an historical basis, to the nine months ended
September 30, 1996, on a pro forma basis,  is more  meaningful than a comparison
on an  historical  basis.  This  is due  primarily  to  significant  changes  in
depreciation and  amortization  that result from the application of the purchase
method  of  accounting  for the  Acquisition,  and from the  increased  interest
expense due to the debt incurred  related to the Acquisition.  Accordingly,  the
following  discussion of the results of operations  includes  comparisons of the
three and nine months ended  September 30, 1997, on an  historical  basis,  with
actual  results for the three months  ended  September  30, 1996,  and pro forma
results for the nine months ended  September  30,  1996.  See "Note 3. Pro Forma
Results of  Operations"  in the Notes to the  Condensed  Consolidated  Financial
Statements.

The financial  information  presented  below  includes the  Company's  operating
results  expressed  in terms of EBITDA,  which  represents  earnings  before net
interest expense, income taxes, depreciation and amortization,  and other income
or expenses.  EBITDA margin represents EBITDA as a percentage of revenue. EBITDA
information is included because the Company understands that such information is
used by certain  investors as one measure of an issuer's  historical  ability to
service  debt.  EBITDA is not intended to represent and should not be considered
more  meaningful  than,  or an  alternative  to, other  measures of  performance
determined in accordance with generally accepted accounting principles.


                                       17
<PAGE>


General

The Company is principally  engaged in two business segments:  (i) the ownership
or  operation  of 352  U.S.  centers  and  87  international  centers  ("Bowling
Centers") as of September 30, 1997; and (ii) the design, manufacture and sale of
bowling center equipment,  including  automatic  pinspotters,  automatic scoring
equipment,  bowling pins, lanes, ball returns, and certain spare and replacement
parts, and the resale of allied products such as bowling balls, bags, shoes, and
certain other spare and replacement parts ("Bowling Products").

To  facilitate  a  meaningful   comparison,   in  addition  to  discussing   the
consolidated  results of the  Company,  certain  portions  of this  Management's
Discussion and Analysis of Financial Condition and Results of Operations discuss
certain results of Bowling Centers and Bowling Products separately.

The results of Bowling Centers,  Bowling Products and the consolidated group are
set forth below.  The two European centers that were not acquired by the Company
as part of the Acquisition,  as discussed in "Note 1. Organization" in the Notes
to the Condensed  Consolidated  Financial  Statements,  are included in the 1996
actual Predecessor Company results and excluded from 1996 pro forma results. The
two centers have no material impact on the Company's financial  statements or on
the information presented in this section.

The  business   segment  results   presented   below  are  before   intersegment
eliminations,  since the Company's  management believes that this will provide a
more  accurate  comparison  of  performance  by segment  from year to year.  The
intersegment  eliminations are not material.  Interest expense is presented on a
gross basis.

Recent Acquisitions

The Company is prepared to acquire or build  additional  centers as  appropriate
opportunities  arise.  The  Company is engaged  in  ongoing  evaluations  of and
discussions with third parties  regarding  possible  acquisitions.  Management's
plans to expand the bowling center operations are subject to the continuation of
favorable economic and financial conditions,  which are generally not within the
Company's control.

Between  January  1, 1997 and  September  30,  1997,  the  Company  acquired  an
aggregate  of 94  centers  in the  United  States,  seven  centers in the United
Kingdom,  and two centers in Australia from several unrelated sellers. In August
1997,  the Company  entered into a joint venture  arrangement  with  Playcenter,
S.A., a Sao Paulo,  Brazil-based based amusement and entertainment  company.  In
October 1997, AMF Bowling  Centers,  Inc.  acquired Michael Jordan Golf Company,
Inc.  In  addition,  Michael  Jordan  agreed  to become a  spokesperson  for and
endorser of AMF bowling centers and bowling  products under a personal  services
contract which grants the Company  rights to use Mr.  Jordan's image and name in
advertising and marketing campaigns. See "Note 10. Acquisitions" in the Notes to
Condensed   Consolidated   Financial   Statements  for  a  discussion  of  these
transactions.



                                       18
<PAGE>
<TABLE>

                                                          AMF BOWLING, INC.
                                                       Selected Financial Data
                                                             (unaudited)
                                                      (in millions of dollars)
<CAPTION>
<S> <C>
                                                                 Three Months                            Nine Months
                                                              Ended September 30,                    Ended September 30,
                                                     -------------------------------------    ----------------------------------
                                                                                                                   Pro Forma
                                                                                                                 ---------------
                                                         1997               1996                   1997               1996
                                                         ----               ----                   ----               ----
Bowling Centers (before intersegment eliminations)
Operating revenue                                            $ 96.8              $ 65.4               $ 297.9            $ 212.6
                                                     --------------     ---------------       ---------------    ---------------
Cost of goods sold                                              8.9                 5.7                  27.2               18.3
Bowling center operating expenses                              65.5                42.6                 182.1              125.9
Selling, general, and administrative expenses                   1.4                 1.7                   4.6                4.7
Depreciation and amortization                                  19.0                13.6                  53.3               38.9
                                                     ==============     ===============       ===============    ===============
Operating income                                              $ 2.0               $ 1.8                $ 30.7             $ 24.8
                                                     ==============     ===============       ===============    ===============

Bowling Products (before intersegment eliminations)
Operating revenue                                            $ 94.2              $ 68.8               $ 218.9            $ 165.6
Cost of goods sold                                             58.4                41.1                 133.1               99.3
                                                     --------------     ---------------       ---------------    ---------------
Gross profit                                                   35.8                27.7                  85.8               66.3

Selling, general, and administrative expenses                  12.0                 8.6                  30.7               24.3
Depreciation and amortization                                   4.7                 4.7                  14.6               13.9
                                                     ==============     ===============       ===============    ===============
Operating income                                             $ 19.1              $ 14.4                $ 40.5             $ 28.1
                                                     ==============     ===============       ===============    ===============

Consolidated
Operating revenue                                           $ 187.5             $ 131.8               $ 505.6            $ 369.3
                                                     --------------     ---------------       ---------------    ---------------
Cost of goods sold                                             64.4                45.0                 150.5              111.5
Bowling center operating expenses                              65.1                42.1                 181.2              124.6
Selling, general, and administrative expenses                  17.1                12.5                  47.2               35.2
Depreciation and amortization                                  23.4                17.9                  66.8               52.7
                                                     --------------     ---------------       ---------------    ---------------
Operating income                                               17.5                14.3                  59.9               45.3
Interest expense, gross                                        31.7                26.3                  89.2               78.5
Other (income) expense, net                                     0.8                 0.3                   2.0               (3.0)
                                                     --------------     ---------------       ---------------    ---------------
Loss before income taxes                                      (15.0)              (12.3)                (31.3)             (30.2)
Provision for income taxes                                     (4.7)               (7.1)                 (8.9)             (11.5)
                                                     ==============     ===============       ===============    ===============
Net loss                                                    $ (10.3)             $ (5.2)              $ (22.4)           $ (18.7)
                                                     ==============     ===============       ===============    ===============


Selected Data:
   EBITDA
     Bowling Centers                                         $ 21.0              $ 15.4                $ 84.0             $ 63.7
     Bowling Products                                        $ 23.8              $ 19.1                $ 55.1             $ 42.0

   EBITDA margin
     Bowling Centers                                           21.7%               23.5%                 28.2%              30.0%
     Bowling Products                                          25.3%               27.8%                 25.2%              25.4%

</TABLE>




                                                                 19
<PAGE>


Bowling Centers

Quarter Ended September 30, 1997 Compared to Quarter Ended September 30, 1996

Bowling Centers operating revenue increased $31.4 million, or 48.0%. An increase
of $33.2  million was  attributable  to new centers,  of which $30.5 million was
from U.S. centers,  and $2.7 million was from  international  centers.  Constant
centers  (defined as centers in  operation  for at least one full  fiscal  year)
operating  revenue  decreased  $1.0 million,  or 1.5%,  primarily as a result of
lower lineage  (defined as games per lane per day) and average price per game in
both U.S. and international centers. Hot, dry weather in the U.S., the U.K., and
Southern Europe,  along with Japan's  stagnant  economy,  has affected  constant
center lineage.  Pricing specials intended to overcome  weather-impacted traffic
in the centers resulted in lower average price per game. An offsetting  decrease
in total  Bowling  Centers  operating  revenue  of $0.8  million  was  primarily
attributable  to seven U.S.  centers which were closed in May 1996, and February
and May 1997, respectively.

Cost of goods sold  increased $3.2 million,  or 56.1%,  primarily as a result of
new centers.

The $22.9 million, or 53.8%, increase in Bowling Centers operating expenses, was
primarily   attributable  to  new  centers.   Of  this  amount,   new  U.S.  and
international  centers  accounted  for  approximately  $21.2  million  and  $1.7
million, respectively. As a percentage of its revenue, Bowling Centers operating
expenses were 65.1% for the quarter ended  September 30, 1996,  versus 67.7% for
the quarter ended September 30, 1997.

A decrease of $0.3 million,  or 17.6%, in selling,  general,  and administrative
expenses was  attributable  to savings  associated with  international  constant
centers which  implemented cost controls in response to lower lineage  discussed
above.

An  increase  of $5.6  million,  or 36.4%,  in EBITDA  was  attributable  to new
centers.  EBITDA margin decreased from 23.5% for the quarter ended September 30,
1996, to 21.7% for the quarter ended  September 30, 1997.  EBITDA margin for the
third quarter was affected,  as expected,  by the increasing  proportion of U.S.
centers  purchased.  U.S.  centers  typically  have  lower  margins in the third
quarter  compared to  international  centers and compared to U.S. margins in the
first  and  fourth  quarters  of the  year,  primarily  because  league  seasons
typically do not begin until the end of the third quarter.


Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996

Bowling Centers operating revenue increased $85.3 million, or 40.1%. An increase
of $85.6  million was  attributable  to new centers,  of which $79.3 million was
from U.S. centers, and $6.3 million was from international  centers. An increase
of $1.8 million,  or 0.9%, in constant centers revenue was primarily a result of
an increase in revenue in the  Northeast  region of the U.S.,  a region in which
the Company has a large number of centers and in which revenue was depressed due
to severe weather conditions during the first quarter of 1996. However, the hot,
dry weather and pricing specials  discussed above partially offset  improvements
achieved  earlier in the year. The increase in constant  centers  revenue in the
first nine  months of 1997  compared  to the same period in 1996 was net of $1.0
million additional revenue in 1996 due to leap year, and a $2.1 million decrease
in revenue  from the Japanese  centers in 1997,  which was  primarily  caused by
recent poor  economic  conditions in Japan.  A decrease in operating  revenue of
$2.1 million was primarily  attributable to seven U.S. centers which were closed
in May 1996, and February and May, 1997, respectively.

Cost of goods sold  increased $8.9 million,  or 48.6%,  primarily as a result of
new centers, partially offset by savings associated with closed centers.

Of the increase of $56.2 million, or 44.6%, in operating expenses, approximately
$54.4  million was  attributable  to new  centers,  of which  $50.8  million was
attributable to U.S.  centers and $3.6 million was attributable to international
centers. As a percentage of its revenue, Bowling Centers operating expenses were
59.2% for the nine months ended September 30, 1996, on a pro forma basis, versus
61.1% for the nine months ended September 30, 1997.

                                       20
<PAGE>

A decrease of $0.1 million,  or 2.1%, in selling,  general,  and  administrative
expenses was  attributable  to savings  associated with  international  constant
centers  which  implemented  cost  controls  in response to the effects of lower
lineage discussed above, partially offset by additional expenses associated with
new centers.

The increase of $20.3 million, or 31.9%, in EBITDA was primarily attributable to
new  centers.  EBITDA  margin  decreased  from 30.0% for the nine  months  ended
September  30, 1996,  on a pro forma  basis,  to 28.2% for the nine months ended
September 30, 1997.  EBITDA margin for the nine month period ended September 30,
1997 was affected,  as expected,  by the increasing  proportion of U.S.  centers
purchased.  U.S.  centers  typically  have lower margins in the second and third
quarters  compared to international  centers and compared to U.S. margins in the
first  and  fourth  quarters  of the  year,  primarily  because  league  seasons
typically  end early in the second  quarter and resume late in the third quarter
of the year.


Bowling Products

The  Bowling  Products  business  consists  of two  categories:  (i) New  Center
Packages  (all of the  equipment  necessary  to outfit a new  bowling  center or
expand an existing  bowling  center,  or  "NCPs");  and (ii)  Modernization  and
Consumer  Products  (which  includes  modernization  equipment which upgrades an
existing center, spare parts, supplies and consumable products).

Quarter Ended September 30, 1997 Compared to Quarter Ended September 30, 1996

Bowling  Products  operating  revenue  increased by $25.4 million,  or 36.9%. An
increase of $27.2 million, or 109.2%, in NCP revenue was offset by a decrease of
$2.2 million,  or 5.0%, in  Modernization  and Consumer  Products  revenue.  The
increase in NCP revenue was due to an overall increase in NCP sales of 464 units
which  occurred   primarily  in  Asia/Pacific   and  Europe.   The  decrease  in
Modernization  and  Consumer  Products  revenue was  primarily  attributable  to
decreased  sales to  Japanese  proprietors  who,  due to the decline in national
lineage  compared to the same period in 1996,  have not been  modernizing  their
centers at the same rate in 1997 compared to 1996. See "--Seasonality and Market
Development Cycles".

Total gross profit from Bowling  Products  increased by $8.1 million,  or 29.2%,
primarily as a result of increased NCP sales. Gross profit margin decreased from
40.3% in 1996 to 38.0% in 1997 due to  competitive  pricing  pressure in certain
markets and higher cost of sales.

Bowling Products selling,  general and administrative expenses increased by $3.4
million,  or  39.5%,  as a  result  of an  increase  of $2.1  million  primarily
attributable  to  increased  payroll  and  facilities  expenses  relating to the
staffing  of the  Company's  international  sales  and  service  offices  and an
increase of $1.3 million  attributable  to increased  advertising  and promotion
expenses in the U.S. locations.

EBITDA margin decreased from 27.8% in 1996 to 25.3% in 1997 due to lower margins
and increased expenses in the third quarter discussed above.


Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996

Bowling  Products  operating  revenue  increased  by $53.3  million,  or  32.2%,
primarily  due to an  increase  of $52.3  million,  or  83.5%,  in NCP  revenue.
Modernization  and Consumer  Products  revenue  remained flat as compared to the
same period in 1996. The increase in NCP revenue was due to an overall  increase
in NCP sales of 1,245 units which occurred  primarily in  Asia/Pacific,  Europe,
South America,  and the Middle East. See  "--Seasonality  and Market Development
Cycles".

Total gross profit from Bowling Products  increased by $19.5 million,  or 29.4%,
primarily as a result of increased NCP sales.  Gross profit margin was 40.0% and
39.2% for the nine  months  ended  September  30,  1996 and 1997,  respectively.
Competitive  pricing pressure in certain markets and higher cost of sales,  both
experienced  in the third  quarter,  resulted in lower  year-to-date  margins in
1997.

                                       21
<PAGE>

Bowling Products selling,  general and administrative expenses increased by $6.4
million, or 26.3%, primarily as a result of a $4.5 million increase attributable
to  payroll  and   facilities   expenses   related  to  staffing  the  Company's
international  sales  and  service  offices,  and an  increase  of $2.8  million
attributable to advertising and promotion expenses in the U.S. locations.  These
increases  were offset by a decrease of $0.9 million in payroll,  facilities and
related expenses at U.S. locations.

EBITDA margin  decreased from 25.4% to 25.2%  primarily due to lower margins and
increased expenses discussed above, offset in part by the increased NCP revenue.


Consolidated Items

Depreciation and Amortization

Depreciation and amortization  increased by $5.5 million, or 30.7%, in the third
quarter,  and $14.1 million,  or 26.8%,  in the nine months ended  September 30,
1997 over the comparable  periods in the prior year. The increases for the third
quarter  and the nine  months  were  attributable  to Bowling  Centers  and were
primarily  due to  depreciation  of property and  equipment of centers  acquired
since May 1996 and  incremental  depreciation  expense  incurred  as a result of
capital expenditures.

Interest Expense

Gross  interest  expense  increased  by $5.4  million,  or  20.5%,  in the third
quarter,  and $10.7 million,  or 13.6%,  in the nine months ended  September 30,
1997 over the  comparable  periods  in the prior  year.  The  increases  for the
quarter  and the nine months were both  primarily  due to interest on  increased
levels  of bank  debt as a  result  of the  acquisitions  described  above.  See
"--Liquidity"  and "--Capital  Resources"  for further  discussion of bank debt.
Non-cash bond interest  amortization  totaled $8.7 million and $25.5 million for
the quarter and nine months ended September 30, 1997, respectively,  compared to
$8.0 million and $16.9  million for the quarter and nine months ended  September
30, 1996.

Net Loss

Net loss  increased  $5.1  million,  or 98.1%,  in the third  quarter,  and $3.7
million,  or 19.8%,  in the nine months ended  September 30, 1997 primarily as a
result of increases  in  depreciation  and interest  expense and the current tax
provision for Holdings,  partially offset by the increases in revenue and EBITDA
discussed above on a segment basis.

Income Taxes

Prior to the  Acquisition,  certain  of the  companies  within  the  Predecessor
Company elected S corporation status under the Internal Revenue Code of 1986, as
amended (the "Code").  Upon  consummation  of the  Acquisition,  those companies
became taxable corporations under the Code.

Pursuant to the Stock Purchase  Agreement as discussed in "Note 1. Organization"
in the Notes to Condensed Consolidated  Financial Statements,  the two principal
companies within the affiliated group elected, under Section 338 (h) (10) of the
Code, to treat the stock purchase as a deemed asset acquisition for the purposes
of U.S. income taxes. These elections permitted both of the affiliated companies
to  revalue  their  assets to fair  market  value  and to treat any  amortizable
goodwill as tax deductible over fifteen years.

As of September 30, 1997, the Company had net operating  losses of approximately
$62.2  million and foreign tax credits of $12.5 million which will carry over to
future years to offset U.S. taxes.  The foreign tax credits will begin to expire
in the year 2001 and the net  operating  losses will begin to expire in the year
2010.  The Company has not booked a valuation  reserve as of September  30, 1997
because the Company  expects to utilize these net  operating  losses and foreign
tax credits prior to expiration.



                                       22
<PAGE>


Liquidity

The  following  discussion  of  liquidity  and capital  resources  compares  AMF
Bowling's  results for the nine months  ended  September  30, 1997 with the nine
months ended September 30, 1996, on an historical basis.

The Company's  primary  source of liquidity is cash  provided by operations  and
credit  facilities as described below.  Working capital on December 31, 1996 was
$7.8 million  compared to a negative  $2.4  million as of September  30, 1997, a
decrease of $10.2 million. Cash decreased $11.6 million primarily as a result of
payments  on  bank  debt  and  internal   funding  of  certain   bowling  center
acquisitions,  and the note payable under the Credit  Agreement  increased $47.5
million as a result of  drawing  down  available  borrowings  under the  Working
Capital  Facility  under the  Credit  Agreement  to fund  increases  in  working
capital.  Accounts  receivable  increased $38.3 million primarily as a result of
increased NCP  revenues,  and  inventory  increased  $18.8 million in advance of
future  shipments.  Accounts  payable  increased  $5.1  million  as a result  of
increased production and related materials purchases which support the increased
backlog as of September 30, 1997. See "--Backlog: Recent NCP Sales". In addition
to the above  increases  and  decreases in working  capital,  a decrease of $3.1
million was caused by changes in other current assets and liabilities.

Net cash flows used in  operating  activities  were $37.9  million  for the nine
months ended  September  30, 1996  compared to net cash provided of $1.5 million
for the nine months ended September 30, 1997, a difference of $39.4 million. Net
cash provided  resulted from an increase of $37.2  million in  depreciation  and
amortization  primarily as a result of  application  of the  purchase  method of
accounting for the Acquisition and subsequent  acquisitions of bowling  centers,
an increase of $8.6 million in  amortization  of the  discount  related to bonds
used to partially fund the  Acquisition,  a net loss of $0.1 million on the sale
of property and  equipment,  a net change of $5.1 million in deferred  taxes and
income  taxes  payable,  and a change  of $33.8  million  in  other  assets  and
liabilities.  Net cash used  resulted  from an increase  of $5.0  million in net
loss, an increase of $18.0 million in accounts  receivable  primarily  resulting
from the increased  levels of NCP sales compared to the same period in 1996, and
an increase of $17.4  million in inventory  primarily  reflecting  the increased
backlog of NCP orders to be shipped after September 30, 1997.

Net cash flows used in investing  activities were $1,339.0  million for the nine
months  ended  September  30,  1996  compared  to net cash  flows used of $231.3
million for the nine months ended  September  30,  1997.  During the nine months
ended September 30, 1996, cash flows used for the Acquisition  totaled  $1,332.0
million,  capital  spending  was $7.9  million  and other  investing  cash flows
provided  were $0.9  million.  During the nine months ended  September 30, 1997,
acquisitions  of centers  totaled  $192.4  million,  capital  spending was $42.6
million,  and other  cash  flows  provided  by  investing  activities  were $3.6
million.  See "Note 10.  Acquisitions"  in the Notes to  Condensed  Consolidated
Financial Statements and "--Capital  Expenditures" for additional  discussion of
these investing activities.

Net cash  provided by financing  activities  was  $1,405.1  million for the nine
months ended  September 30, 1996 compared to net cash provided of $218.8 million
for the nine months  ended  September  30,  1997.  During the nine months  ended
September 30, 1996,  cash flows were primarily  provided by $1,034.9  million of
proceeds of long term debt and $380.3 million from a capital contribution,  both
of which  were  used to fund the  Acquisition.  During  1996,  funds  were  used
primarily for the payment of long term debt  totaling  $9.6 million.  During the
nine months ended  September 30, 1997,  cash flows were provided by drawing down
$162.5 million and $47.5 million from available borrowings under the Acquisition
Facility  and the  Working  Capital  Facility,  respectively,  under the  Credit
Agreement to fund the  acquisitions of bowling centers  discussed  above, and to
fund increases in working capital. Additionally, $35.6 million was provided as a
capital  contribution by the Parent's  institutional  stockholders to be used in
part to fund acquisitions and for other corporate  purposes.  During 1997, funds
were used  primarily for the payment of long term debt totaling  $25.8  million,
and  $0.5  million  was  used  for the  repurchase  of an  officer's  shares  in
connection with the termination of his employment with the Company.

As a result of the aforementioned,  cash increased by $27.2 million for the nine
months ended  September 30, 1996 compared to a decrease of $11.6 million for the
nine months ended September 30, 1997.

Capital Resources

As a result of the  Acquisition,  the  Company's  total  indebtedness  increased
substantially.  At September 30, 1997,  the Company's  debt  consisted of Senior
Debt of $750.8 million,  senior  subordinated notes of $250.0 million and senior
subordinated  discount  notes of $300.2  million.  At September  30,  1997,  the
Company was also capitalized with equity of $413.6 million. Subject to certain

                                       23
<PAGE>

conditions,  the  Company  had the  ability  to borrow up to $50.0  million  for
general  corporate  purposes  pursuant to a Working  Capital  Facility and up to
$230.0  million  for  acquisitions  pursuant  to the  Acquisition  Facility.  At
September 30, 1997,  $171.0 million and $47.5 million was outstanding  under the
Acquisition  Facility and the Working Capital  Facility,  respectively.  Between
September  30, 1997 and October 31, 1997,  there were no  additional  borrowings
under the Acquisition  facility and no additional  borrowings  under the Working
Capital Facility.  However, available borrowings under the Credit Agreement were
increased  as of November 7, 1997,  pursuant to the  amendment  and  restatement
described below.

The Company  funds its cash needs  through cash flow from  operations,  existing
cash balances and the facilities under the Credit  Agreement  described below. A
substantial  portion of the Company's  available cash will be applied to service
the indebtedness incurred to finance the Acquisition.

The  indentures  and  the  Credit  Agreement  contain  financial  and  operating
covenants  and  significant  restrictions  on the  ability of the Company to pay
dividends, incur indebtedness, make investments and take certain other corporate
actions.

In July 1997,  Bowling  Worldwide entered into an interest rate cap agreement to
reduce the interest  rate risk of its Senior Debt.  The notional  amount of this
cap is $100.0  million.  See "Note 6. Long-term  Debt" in the Notes to Condensed
Consolidated Financial Statements for additional discussion of these agreements.

On  August  21,  1997,  AMF  Bowling  filed a  registration  statement  with the
Securities  and  Exchange   Commission  for  an  initial  public  offering  (the
"Offering")  of common  stock by the Parent.  On  November 7, 1997,  AMF Bowling
issued 15,525,000 shares of its common stock at $19.50 per share pursuant to the
Offering.  See  "Note  7.  Stockholders'  Equity"  in  the  Notes  to  Condensed
Consolidated Financial Statements.

In connection  with the  Offering,  the Company and the lenders under the credit
agreement  which   underlies  the  Company's   senior  bank  debt  (the  "Credit
Agreement")  approved an amendment and restatement of the Credit  Agreement that
became  effective on November 7, 1997. This amendment and restatement  increased
the  flexibility  and  borrowing   capacity  of  Bowling   Worldwide's   ongoing
acquisition  program.  The  Company  will incur  extraordinary  charges of $22.7
million in the fourth quarter of 1997 arising from the amendment and restatement
of the Credit Agreement,  the redemption of Discount Notes, and the write-off of
deferred financing costs previously incurred with respect to the Acquisition and
issuance of the Discount Notes  expected to be redeemed.  See "Note 6. Long-Term
Debt" in the Notes to Condensed Consolidated Financial Statements.

The  Company's  ability to make  scheduled  payments of principal  of, or to pay
interest on, or to refinance its indebtedness depends on its future performance,
which,  to  a  certain  extent,  is  subject  to  general  economic,  financial,
competitive, legislative, regulatory and other factors beyond its control. Based
upon the current level of operations and anticipated growth, management believes
that available cash flow,  together with available  borrowings  under the Credit
Agreement  and other  sources of  liquidity,  are adequate to meet the Company's
anticipated  future  requirements  for working  capital,  capital  expenditures,
scheduled  payments of  principal  of, and  interest  on, its Senior  Debt,  and
interest on the Notes.  There can be no assurance  that the  Company's  business
will generate  sufficient  cash flow from  operations or that future  borrowings
will be available in an amount  sufficient  to enable the Company to service its
indebtedness,  including the Exchange Notes,  or that any  refinancing  would be
available on commercially reasonable terms or at all.

Capital Expenditures

For the nine months ended  September  30, 1997,  the  Company's  actual  capital
expenditures were $42.6 million compared to $14.8 million,  on a pro forma basis
(defined  as  expenditures  of the  acquired  business  from  January  1 through
September  30), for the nine months ended  September 30, 1996.  The increase was
primarily  due to an ongoing  modernization  program in Bowling  Centers,  a new
point-of-sale  information system in U.S. centers,  new Company wide information
systems,   and   construction  of  a  new  40  lane,   state-of-the-art   family
entertainment center in New York City.

The Company  funds its capital  expenditures  from cash  generated by operations
and, with respect to the construction and acquisition of new centers, internally

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<PAGE>

generated cash and the Acquisition Facility.  See "Note 10. Acquisitions" in the
Notes to Condensed  Consolidated  Financial  Statements  and  "--Liquidity"  and
"--Capital Resources" for discussions of funding of acquisitions of new centers.

Seasonality and Market Development Cycles

On a  consolidated  basis,  revenue and EBITDA of the Company's  businesses  are
neither highly  seasonal nor highly  cyclical.  The geographic  diversity of the
Company's  bowling centers,  which operate across different  regions of the U.S.
and across nine different countries,  along with the bowling industry's historic
insulation to recessions, has provided stability to Holdings' annual cash flows.
Although  financial  performance  of Bowling  Centers  operations is seasonal in
nature in many countries, with cash flows typically peaking in the winter months
and reaching  their lows in the summer months,  the geographic  diversity of the
Company's  bowling centers has helped reduce this seasonality as bowling centers
in certain  countries in which the Company operates exhibit  different  seasonal
sales patterns.  As a result of the growing number of U.S. centers  attributable
to the Company's  acquisition  program,  the seasonality  described above may be
accentuated.  In  Australia,  where  the  Company  has  its  largest  number  of
international  centers,  the  reversal  of seasons  relative  to the U.S.  helps
mitigate the seasonality in worldwide  operations.  The Company's cash flows are
further stabilized by the location of many centers in regions where the climates
have high average temperatures and high humidity.  In the United States,  during
the summer months when league bowling is generally less active,  bowling centers
in the southern U.S. continue to show strong performance.  Similarly, in regions
with  warm  summer  climates  such as Hong Kong and  Mexico,  where  bowling  in
air-conditioned centers may be more attractive than outdoor activities,  bowling
centers show strong  performance.  See "Note 11. Business Segments" in the Notes
to Consolidated Financial Statements for geographic information on the Company's
business.

Sales in the  Modernization  and Consumer  Products category of Bowling Products
display significant  seasonality.  The U.S. market,  which is the largest market
for Modernization and Consumer  Products,  is driven by the beginning of leagues
in the fall of each year. Operators typically sign purchase orders, particularly
for replacement equipment,  during the first four months of the year, after they
receive  winter league revenue  indications.  Equipment is shipped and installed
during the summer  months,  when leagues are  generally  less  active.  Sales of
modernization equipment,  such as automatic scoring and synthetic lane overlays,
are less predictable and fluctuate more than the replacement  equipment  because
of the five to ten year cycles of these major products.

The NCP category of Bowling Products experiences significant fluctuations due to
changes in demand for NCPs as certain markets experience high growth followed by
market maturity, at which time sales to that market decline,  sometimes rapidly.
Market cycles for individual countries have, in the past, spanned several years,
with periods of high demand for several markets (e.g.,  Korea and Taiwan) which,
in the Company's  experience,  last five years or more. These growth patterns do
not seem to be closely tied to general economic cycles.

International Operations

For the  nine  months  ended  September  30,  1997,  26.8%  of  Bowling  Centers
operations  revenue was generated by international  centers.  Historically,  the
Company has not engaged in any significant currency hedging activities.

For the nine months ended  September 30, 1997,  60.5% of Bowling  Products sales
were made through  international  sales  offices and  distributors.  To minimize
credit and  international  exchange  risk,  equipment  is sold  primarily  using
letters of credit  denominated  in U.S.  dollars.  Letters of credit are usually
received before  shipments leave U.S.  ports.  International  sales offices sell
some products in local currency,  but adjust pricing,  to the extent that market
conditions  permit,  with  changes in exchange  rates.  This policy  enables the
Bowling Products operations  generally to avoid any material adverse effect from
exchange rate fluctuations. Management believes that this policy should continue
to protect the Company  from  material  adverse  consequences  of exchange  rate
fluctuation,   except  in  the  event  of  severe  international  exchange  rate
volatility.

Backlog: Recent NCP Sales

The total NCP backlog as of September 30, 1997 was 1,897 units, which is an 8.1%
increase  over the  September  30,  1996  backlog  of 1,755  units,  and a 33.0%
increase  over the  December  31, 1996  backlog of 1,426  units.  The  increased
backlog was directly attributable to strong NCP orders generated throughout the

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<PAGE>

world as a result of an  aggressive  program to  increase  sales in  established
markets and develop bowling in emerging markets. The backlog as of September 30,
1997 reflected a significant  number of orders from  customers in  Asia/Pacific,
North and South America, and Europe.

NCP sales for the first nine months of 1997  totaled  $114.9  million,  an 83.5%
increase over the same period in 1996. The significant increase was attributable
to the market  development and sales programs  implemented in the second half of
1996 and in 1997 which are designed to maximize NCP sales  activity in a variety
of marketplaces of the world. While Asia/Pacific is a large market for NCP sales
and backlog, other markets such as South America, India, Poland, Russia, and the
Middle East are also  represented  and being developed as a result of the market
development and sales programs discussed above.

Impact of Inflation

The  Company  has  historically  offset the impact of  inflation  through  price
increases  and  expense  reductions.  Periods  of high  inflation  could have an
adverse effect on the Company to the extent that increased  borrowing  costs for
floating rate debt may not be offset by increases in revenue.

Environmental Matters

The  Company's  operations  are  subject to  federal,  state,  local and foreign
environmental  laws and regulations that impose limitations on the discharge of,
and  establish  standards  for  the  handling,  generation,  emission,  release,
discharge, treatment, storage and disposal of, certain materials, substances and
wastes.

The Company currently and from time to time is subject to environmental  claims.
It is the opinion of management that the various  asserted claims and litigation
in which the Company  currently  is  involved  are not likely to have a material
adverse effect on its financial position or results of operations.  However,  no
assurance  can be given as to the  ultimate  outcome with respect to such claims
and litigation.

The Company cannot  predict with any certainty  whether  existing  conditions or
future events,  such as changes in existing laws and regulations,  may give rise
to additional environmental costs. Furthermore, actions by federal, state, local
and foreign governments concerning environmental matters could result in laws or
regulations that could increase the cost of producing the Company's products, or
providing  its  services,  or  otherwise  adversely  affect  the  demand for its
products or services.


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<PAGE>


PART II

Item 1. Legal Proceedings

The  Company  currently  and from time to time is  subject  to claims  and suits
arising in the ordinary course of its business,  including environmental claims,
employment  discrimination  claims,  workers'  compensation claims, and personal
injury  claims from  customers  of Bowling  Centers.  In certain  such  actions,
plaintiffs  request  punitive  or  other  damages  that  may not be  covered  by
insurance.  In the  opinion  of  management,  the  various  asserted  claims and
litigation  in which the Company  currently is involved will not have a material
adverse effect on its financial position or results of operations.  However,  no
assurance  can be given as to the  ultimate  outcome with respect to such claims
and litigation.

On March 5, 1996, the defendant in an action entitled  Northland Bowl and Sports
Center, Inc. and Recreation  Associates,  II v. Golden Giant, Inc., d/b/a Golden
Giant  Building  Systems,  Court of Common Pleas,  Centre  County,  Pennsylvania
(Index No. 96-75),  asserted a third-party  claim against AMF Bowling  Products,
Inc.  (formerly  named AMF  Bowling,  Inc.)("AMF  Bowling  Products")  and other
parties. Defendant, Golden Giant, Inc. ("Golden Giant"), a construction company,
was  originally  named as the sole  defendant by a bowling  center (not owned or
operated by the Company) in connection with the collapse of the center's roof in
early 1994. Golden Giant named AMF Bowling Products as an additional  defendant,
charging  it with  negligence  and breach of  implied  warranty  for  installing
scoring  monitors  (four years  before the roof  collapsed)  on a portion of the
building that allegedly  could not adequately  support the additional  weight of
the  equipment.  The bowling  center  plaintiff  claims total damages in amounts
exceeding  $3.5  million,  and Golden Giant  asserts  that,  if the plaintiff is
entitled  to any  recovery,  it should be in whole or part  against  AMF Bowling
Products.  On March  25,  1997,  an order was  entered  dismissing  AMF  Bowling
Products from the lawsuit,  which continues  against the other  defendants.  The
plaintiff has appealed the order  dismissing  Bowling  Products,  and in October
1997, the appellate court denied the plaintiff permission to appeal. This matter
has previously  been reported by the Company in its Form 10-Q quarterly  reports
for the periods ended March 31, 1997, and June 30, 1997.


Item 6.   Exhibits and Reports on Form 8-K

(a)      Exhibits:
                  11       Statement re computation of earnings per share.  (SEC
                           filing only)

                  27       Financial  Data  Schedule  for the nine months  ended
                           September 30, 1997. (SEC filing only)

                  99       Third quarter,  1997,  earnings release dated October
                           24, 1997 (incorporated herein by reference to Bowling
                           Worldwide's  Form 10-Q for the quarterly period ended
                           September 30, 1997 (File No. 001-12131)).

(b)       Reports on Form 8-K:  None.

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<PAGE>



SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

AMF Bowling, Inc.
(Registrant)


 /s/ Stephen E. Hare                                           November 20, 1997
----------------------------------
Stephen E. Hare
Executive Vice President,
Chief Financial Officer
(Duly Authorized Officer)


 /s/ Michael P. Bardaro                                        November 20, 1997
---------------------------------
Michael P. Bardaro
Vice President, Secretary and
Corporate Controller
(Chief Accounting Officer)



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