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 March 31, 1998
                                       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 |X| . No _____.

At May 1, 1998,  59,707,450  shares of common  stock,  par value of $.01, of the
Registrant were outstanding.



<PAGE>
<TABLE>

                                     PART I
                          Item 1. Financial Statements

                       AMF BOWLING, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    (dollars in thousands, except share data)

<CAPTION>
<S> <C>
                                                                       March 31,    December 31,
                                                                          1998         1997
          
                                                                      -----------   -----------
    Assets                                                            (unaudited)
    ------
   Current assets:
    Cash and cash equivalents                                         $    29,593   $    35,790
    Accounts and notes receivable, net of allowance for
     doubtful accounts of $4,894 and $5,012, respectively                  67,133        73,991
    Inventories                                                            67,444        56,568
    Deferred taxes and other current assets                                18,627        17,049
                                                                      -----------   -----------
     Total current assets                                                 182,797       183,398
   Property and equipment, net                                            804,756       750,885
   Leasehold interests, net                                                47,623        47,180
   Deferred financing costs, net                                           17,930        18,911
   Goodwill, net                                                          771,342       772,348
   Investments in and advances to joint ventures                           24,564        19,999
   Other assets                                                            40,939        39,331
                                                                      -----------   -----------
    Total assets                                                      $ 1,889,951   $ 1,832,052
                                                                      ===========   ===========


    Liabilities and Stockholders' Equity
    ------------------------------------
   Current liabilities:
    Accounts payable                                                  $    32,900   $    41,583
    Accrued expenses                                                       61,803        64,865
    Income taxes payable                                                    4,709         5,644
    Long-term debt, current portion                                        29,251        27,376
                                                                      -----------   -----------
     Total current liabilities                                            128,663       139,468
   Long-term debt, less current portion                                 1,099,921     1,033,223
   Other long-term liabilities                                              5,190         5,333
   Deferred income taxes                                                        -             -
                                                                      -----------   -----------
    Total liabilities                                                   1,233,774     1,178,024
                                                                      -----------   -----------
   Commitments and contingencies
   Stockholders' equity:
    Common stock (par value $.01, 200,000,000 shares authorized,
     59,697,250 shares issued and outstanding at March 31, 1998,
     59,630,000 shares issued and outstanding at December 31, 1997)           597           596
    Paid-in capital                                                       749,433       748,053
    Retained deficit                                                      (75,679)      (75,048)
    Equity adjustment from foreign currency translation                   (18,174)      (19,573)
                                                                      -----------   -----------
    Total stockholders' equity                                            656,177       654,028
                                                                      -----------   -----------
    Total liabilities and stockholders' equity                        $ 1,889,951   $ 1,832,052
                                                                      ===========   ===========




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


<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)
                      (in thousands, except per share data)

<CAPTION>

                                                                                     Three Months
                                                                                    Ended March 31,
                                                                             -----------------------------
                                                                                1998                1997
                                                                             ---------           ---------

Operating revenue                                                            $ 187,564           $ 157,589
                                                                             ---------           ---------

Operating expenses:
  Cost of goods sold                                                            38,857              38,050
  Bowling center operating expenses                                             78,713              55,342
  Selling, general, and administrative expenses                                 16,939              14,000
  Depreciation and amortization                                                 26,790              20,500
                                                                             ---------           ---------
   Total operating expenses                                                    161,299             127,892
                                                                             ---------           ---------

   Operating income                                                             26,265              29,697
                                                                             ---------           ---------
Nonoperating expenses (income):
  Interest expense                                                              25,974              27,672
  Other expenses, net                                                              573               1,509
  Interest income                                                                 (533)               (685)
                                                                             ---------           ---------
   Total nonoperating expenses                                                  26,014              28,496
                                                                             ---------           ---------

   Income before income taxes                                                      251               1,201
   Provision for income taxes                                                      530               1,120
                                                                             ---------           ---------
   Net income (loss) before equity in loss of joint ventures                      (279)                 81
   Equity in loss of joint ventures                                               (352)                  -
                                                                             ---------           ---------
   Net income (loss)                                                         $    (631)          $      81
                                                                             =========           =========

  Net income (loss) per share - basic and diluted                            $   (0.01)          $    0.00
                                                                             =========           =========
  Weighted average shares outstanding                                           59,661              42,323
                                                                             =========           =========


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


<PAGE>


                       AMF BOWLING, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)
<CAPTION>


                                                                         Three Months
                                                                        Ended March 31,
                                                                      -------------------
                                                                        1998       1997
                                                                      --------   --------
  Cash flows from operating activities:
  Net income (loss)                                                   $   (631)  $     81
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
   Depreciation and amortization                                        26,790     20,500
   Equity in loss of joint ventures                                        352          -
   Deferred income taxes                                                     -       (410)
   Amortization of bond discount                                         5,667      8,301
   Loss on the sale of property and equipment, net                         269        106
   Changes in assets and liabilities:
    Accounts and notes receivable, net                                   7,287     (4,128)
    Inventories                                                        (10,077)   (10,265)
    Other assets                                                        (2,047)    (4,178)
    Accounts payable and accrued expenses                              (15,802)    12,094
    Income taxes payable                                                  (673)    (1,029)
    Other long-term liabilities                                            (40)     2,495
                                                                      --------   --------
   Net cash provided by operating activities                            11,095     23,567
                                                                      --------   --------

  Cash flows from investing activities:
  Acquisitions of operating units, net of cash acquired                (65,615)   (33,641)
  Investments in and advances to joint ventures                         (4,565)         -
  Purchases of property and equipment                                  (11,641)    (6,907)
  Proceeds from the sale of property and equipment                         104        215
                                                                      --------   --------
   Net cash used in investing activities                               (81,717)   (40,333)
                                                                      --------   --------

  Cash flows from financing activities:
  Proceeds from long-term debt, net of deferred financing costs         72,000     29,002
  Payments on long-term debt                                            (9,093)         -
  Repurchase of shares                                                       -       (500)
  Issuance of shares                                                     1,381          -
  Payments of noncompete obligations                                      (258)      (166)
                                                                      --------   --------
   Net cash provided by financing activities                            64,030     28,336
                                                                      --------   --------
   Effect of exchange rates on cash                                        395     (2,072)
                                                                      --------   --------
   Net (decrease) increase in cash                                      (6,197)     9,498
   Cash and cash equivalents at beginning of period                     35,790     43,568
                                                                      --------   --------
   Cash and cash equivalents at end of period                         $ 29,593   $ 53,066
                                                                      ========   ========


</TABLE>


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


<PAGE>


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

Note 1.  Organization

     The accompanying  unaudited  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
for the interim  periods.  The interim  financial  information and notes thereto
should  be read in  conjunction  with the  December  31,  1997 and 1996  audited
consolidated  financial statements of AMF Bowling,  Inc. ("AMF Bowling") and its
subsidiaries (collectively,  the "Company") presented in AMF Bowling's Form 10-K
Annual  Report for the fiscal year ended  December  31, 1997 filed with the U.S.
Securities  and Exchange  Commission.  The results of  operations  for the three
months ended March 31, 1998,  are not  necessarily  indicative  of results to be
expected for the entire year.

     The  Company is  principally  engaged  in two  business  segments:  (i) the
ownership  or  operation  of bowling  centers,  consisting  of 399 U.S.  bowling
centers and 104  international  bowling centers ("Bowling  Centers"),  including
fourteen joint venture centers described in "Note 8. Acquisitions",  as of March
31,  1998,  and  (ii) the  manufacture  and sale of  bowling  equipment  such as
automatic  pinspotters,  automatic scoring equipment,  bowling pins, lanes, ball
returns,  certain spare parts, and the resale of allied products such as bowling
balls,  bags,  shoes,  and certain other spare parts ("Bowling  Products").  The
principal  markets for bowling  equipment  are U.S.  and  international  bowling
center operators.

     AMF Bowling Worldwide, Inc. ("Bowling Worldwide") is a wholly owned, direct
subsidiary of AMF Group Holdings Inc. ("AMF Group Holdings"). AMF Group Holdings
is a wholly  owned,  direct  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
principal assets in each are comprised of investments in subsidiaries.

     Pursuant to a Stock Purchase Agreement dated February 16, 1996, between AMF
Group Holdings and the  stockholders  (the "Prior  Owners") of AMF Bowling Group
(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").  The purchase price for the Acquisition was approximately  $1.37
billion. 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 Closing
Date.

     On November 7, 1997, AMF Bowling  completed an initial public offering (the
"Initial  Public  Offering") of  15,525,000  shares of common stock (the "Common
Stock"), which trades on the New York Stock Exchange under the symbol "PIN". The
net proceeds of $279.1 million from the Initial Public Offering were contributed
by AMF Bowling to Bowling  Worldwide and used by Bowling Worldwide to reduce and
refinance  its bank debt  pursuant  to Bowling  Worldwide's  third  amended  and
restated  credit  agreement (the "Credit  Agreement") and to redeem a portion of
Bowling Worldwide's senior subordinated discount notes.

     As of March 31,  1998,  the Company has  acquired  212 bowling  centers and
constructed  one bowling center since the  Acquisition  for a combined  purchase
price of $389.2  million.  The  Company has funded its  acquisitions  and center
construction from internally generated cash, borrowings under the senior secured
revolving credit facility (the "Bank Facility") under the Credit Agreement,  and
issuances of Common Stock. See "Note 8. Acquisitions".



<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 the Company have been
presented for the three months ended March 31, 1998 and 1997, respectively.  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.

Goodwill

     As a result of the Acquisition and subsequent  purchases of bowling centers
discussed in "Note 8. Acquisitions",  and in accordance with the purchase method
of accounting for all acquisitions,  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  $5,037  and  $4,900 for the three  months  ended  March 31,  1998 and 1997,
respectively.

Comprehensive Income

     Effective January 1, 1998, the Company adopted,  as required,  Statement of
Financial  Accounting  Standards  ("SFAS")  No.  130  "Reporting   Comprehensive
Income." Comprehensive income for the three months ended March 31, 1998 was $768
and comprehensive loss for the three months ended March 31, 1997 was $3,889.


Note 3.   Inventories

     Inventories  at March  31, 1998, and  December  31, 1997  consisted  of the
following:


                                           March 31,          December 31,
                                              1998                1997
                                       ------------------- -------------------
                                          (unaudited)
Bowling Products, at FIFO:
   Raw materials                                 $ 17,035            $ 15,283
   Work in progress                                 2,379               2,279
   Finished goods and spare parts                  40,143              33,082
Bowling Centers, at average cost:
   Merchandise and spare parts                      7,887               5,924
                                       ------------------- -------------------
                                                 $ 67,444            $ 56,568
                                       =================== ===================





<PAGE>


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

Note 4.   Property and Equipment

     Property and equipment at March 31, 1998, and December 31, 1997,  consisted
of the following:


                                                   March 31,      December 31,
                                                      1998            1997
                                                 --------------- ---------------
                                                  (unaudited)
Land                                                  $ 125,769       $ 113,629
Buildings and improvements                              297,646         280,046
Equipment, furniture, and fixtures                      489,822         444,437
Other                                                     5,777           7,282
                                                 --------------- ---------------
                                                        919,014         845,394
Less: accumulated depreciation and amortization        (114,258)        (94,509)
                                                 --------------- ---------------
                                                      $ 804,756       $ 750,885
                                                 =============== ===============

     Depreciation and amortization expense related to property and equipment was
$20,519  and  $13,735  for the  three  months  ended  March  31,  1998 and 1997,
respectively.

Note 5. Long-Term Debt

     Long-term  debt at March 31, 1998,  and December 31, 1997  consisted of the
following:


                                                 March 31,      December 31,
                                                    1998            1997
                                               --------------- ----------------
                                                (unaudited)
Bank debt                                           $ 682,268        $ 619,362
Senior subordinated notes                             250,000          250,000
Senior subordinated discount notes                    194,928          189,261
Mortgage and equipment notes                            1,976            1,976
                                               --------------- ----------------
   Total debt                                       1,129,172        1,060,599
Current maturities                                    (29,251)         (27,376)
                                               --------------- ----------------
   Total long-term debt                           $ 1,099,921      $ 1,033,223
                                               =============== ================

     The  Company's  bank debt (the "Senior  Debt") was  incurred  pursuant to a
credit  agreement,  dated  as of  May 1,  1996,  and  amended  and  restated  in
connection  with the Initial  Public  Offering,  as of November 3, 1997,  as the
Credit Agreement among Bowling  Worldwide and its lenders.  The Credit Agreement
provides for (i) three senior secured term loan  facilities  aggregating  $455.3
million (the "Term  Facilities")  and (ii) the Bank Facility  which provides for
borrowings up to $355.0 million on a revolving basis. At March 31, 1998, amounts
outstanding  under the Term  Facilities  and Bank  Facility  were  $437,156  and
$245,112, respectively.

Note 6.  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 7.  Employee Benefit Plans

AMF Bowling, Inc. 1996 Stock Incentive Plan

     The total number of shares of Common Stock ("Stock  Options")  reserved and
available  at March 31, 1998 for grant under the AMF  Bowling,  Inc.  1996 Stock
Incentive Plan (the "1996 Plan") was 1,767,151. At March 31, 1998, the number of
shares  of  Common  Stock  subject  to  Stock  Options   outstanding  to  senior
management,  other employees,  consultants and directors totaled 1,530,650 at an
exercise  price of $10.00 per share.  In addition to Stock  Options  outstanding
under the 1996 Plan,  130,000 Stock Options granted to Douglas J. Stanard on May
1,


<PAGE>


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


1996 were  outstanding  at March 31, 1998.  Of the total Stock  Options  awarded
under the 1996 Plan,  265,966 were exercisable at March 31, 1998 and 17,250 were
exercised  in the three months ended March 31,  1998.  Forfeited  Stock  Options
under the 1996 Plan totaled 273,100  through March 31, 1998.  There were 219,251
shares of Common Stock  available  for grant under the 1996 Plan as of March 31,
1998.

AMF Bowling, Inc. 1998 Stock Incentive Plan

         Subject to shareholder  approval,  AMF Bowling's Board of Directors has
approved the AMF Bowling, Inc. 1998 Stock Incentive Plan (the "1998 Plan") under
which AMF Bowling may grant  incentive  awards in the form of  Restricted  Stock
Awards,  Stock Options and Stock  Appreciation  Rights in substantially the same
manner as provided  under the 1996 Plan.  Two million  shares have been reserved
and will be available for issuance  under the 1998 Plan. In addition,  shares of
Common Stock that have been  reserved  but not issued  under the 1996 Plan,  and
shares  which are subject to awards under the 1996 Plan that expire or otherwise
terminate,  may be granted as awards  pursuant to the 1998 Plan. As of March 31,
1998, no awards were granted under the 1998 Plan.


Note 8.   Acquisitions

     Since the  Acquisition  and prior to December  31,  1997,  Bowling  Centers
purchased an  aggregate  of 179 bowling  centers  from  unrelated  sellers.  The
combined purchase price, net of cash acquired,  was approximately $340.7 million
(including amounts paid in 1998 for certain bowling centers included in the 1997
total), and was funded with approximately  $40.0 million from the sale of equity
by AMF Bowling to its institutional  stockholders and one of its directors,  and
with  $300.7  million  from  available   borrowing  under  Bowling   Worldwide's
acquisition facility then existing under the bank credit agreement and under the
Bank Facility.

     From  January 1, 1998  through  March 31,  1998,  the  Company  acquired 29
centers in the United States,  two centers in the United Kingdom and two centers
in Australia from unrelated sellers, including fifteen centers from Active West,
Inc.  ("Active  West").  The aggregate  purchase price was  approximately  $48.5
million,  including $28.0 million funded with borrowings under the Bank Facility
and, with respect to the Active West acquisition,  the issuance of 50,000 shares
of Common Stock.

     Between March 31, 1998 and April 30, 1998, the Company acquired one bowling
center in the United States, eleven centers in the United Kingdom and one center
in Australia  from unrelated  sellers.  As a result of these  acquisitions,  and
after giving effect to the closing of eight U.S.  centers and one  international
center in 1997, the Company owned or operated 400 U.S.  bowling  centers and 116
international bowling centers as of April 30, 1998.

     As of April 30,  1998,  the Company had entered  into  purchase  agreements
regarding  the  acquisitions  of twelve  additional  U.S.  bowling  centers from
unrelated sellers.  The aggregate purchase price is expected to be approximately
$15.1 million and is expected to be funded with  available  borrowing  under the
Bank Facility and cash generated from operations.




<PAGE>


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


Note 9.  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 March 31,
1998 and 1997, respectively, is presented below (in millions):
<TABLE>
<CAPTION>
<S> <C>


                                                            Three Months Ended March 31, 1998
                                         --------------------------------------------------------------------------------

                                               Bowling Centers          Bowling Products
                                            -----------------------  -----------------------
                                                     Inter-   Sub-             Inter-  Sub-                Elim-
                                             U.S.   national  total    U.S.   national total   Corporate  inations  Total
                                             ----   --------  -----    ----   -------- -----   ---------  --------  -----
Revenue from unaffiliated customers       $ 125.3   $ 25.2  $ 150.5  $ 13.6  $ 23.5  $ 37.1      $ -       $ -    $ 187.6
Intersegment sales                            -        -        -       3.7     0.3     4.0        -         -        4.0
Operating income (loss)                      32.6      2.3     34.9    (3.9)   (1.4)   (5.3)      (4.0)      0.7     26.3
Identifiable assets                         865.4    312.4  1,177.8   631.3    75.1   706.4        3.9       1.9  1,890.0
Depreciation and amortization                17.4      4.5     21.9     5.1     0.3     5.4        0.2      (0.7)    26.8
Capital expenditures                          7.0      0.9      7.9     3.2     0.5     3.7        -         -       11.6
Research and development expense              -        -        -       0.2     -       0.2        -         -        0.2
<CAPTION>

                                                             Three Months Ended March 31, 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        $ 82.6   $ 25.9  $ 108.5  $ 23.5  $ 25.6  $ 49.1      $ -       $ -    $ 157.6
Intersegment sales                            -        -        -       2.0     0.9     2.9        -         -        2.9
Operating income (loss)                      23.0      2.8     25.8     6.7     0.5     7.2       (3.6)      0.3     29.7
Depreciation and amortization                11.6      4.5     16.1     4.5     0.3     4.8        -        (0.4)    20.5
Capital expenditures                          4.0      1.5      5.5     0.9     0.2     1.1        0.4      (0.1)     6.9
Research and development expense              -        -        -       0.2     -       0.2        -         -        0.2
</TABLE>

Note 10. Subsequent Event

     On May 12, 1998, AMF Bowling issued its zero coupon convertible  debentures
(the  "Debentures")  for gross proceeds of  approximately  $284.1  million.  The
Debentures,  which were sold in a private  placement to qualified  institutional
buyers, mature on May 12, 2018 and have a yield to maturity of 7% per annum. The
Debentures  were issued pursuant to an Indenture (the  "Indenture")  dated as of
May 12, 1998  between AMF  Bowling and The Bank of New York,  as Trustee,  at an
original  price  of  $252.57  per  $1,000  principal  amount  at  maturity.  The
Debentures  are  convertible at any time prior to maturity into shares of Common
Stock at a  conversion  rate of 8.6734  shares  per $1,000  principal  amount at
maturity.  If held to maturity and not redeemed or  repurchased  by AMF Bowling,
the  Debentures  will  accrue to an  aggregate  principal  amount at maturity of
$1.125 billion. The Debentures are not entitled to a sinking fund.

     The  Debentures  are not redeemable at the option of AMF Bowling before May
12, 2003.  Thereafter,  the  Debentures are redeemable for cash at the option of
AMF Bowling at redemption prices specified in the Debentures,  the form of which
is attached as an annex to the Indenture.

     The Debentures  will be purchased by AMF Bowling,  at the option of holders
of the  Debentures,  as of May 12,  2003,  May 12,  2008  and May 12,  2013  for
purchase prices specified in the Debentures. The Debentures may also be redeemed
at the option of the holders of the  Debentures  upon the occurrence of a Change
of Control (as defined in the Indenture) at redemption  prices  specified in the
Debentures.  AMF Bowling may elect to pay any such purchase  price or redemption
price in cash or Common Stock, or any combination thereof.

         AMF Bowling has reserved  9,757,575 shares of Common Stock for issuance
upon conversion, redemption or repurchase of the Debentures.

         In  connection  with the  issuance of the  Debentures,  AMF Bowling has
agreed pursuant to a registration  rights  agreement (the  "Registration  Rights
Agreement")  to  file  with  the  Securities  and  Exchange  Commission  a shelf
registration  statement  in  respect  of the  Debentures  and the  Common  Stock
issuable  on  conversion,   redemption  or  repurchase  thereof.  If  the  shelf
registration  statement has not been filed within 90 days or declared  effective
within 180 days, after May 12, 1998, AMF Bowling must pay liquidated  damages as
specified in the Registration  Rights Agreement.  AMF Bowling has agreed to keep
the shelf  registration  statement  effective  until the earlier of (i) the sale
pursuant to the shelf  registration  statement of all the securities  registered
thereunder  and  (ii)  the  expiration  of  the  holding  period  applicable  to
non-affiliates  of AMF Bowling under Rule 144(k) of the  Securities  Act of 1933
(which is currently two years).

     The net proceeds of the offering were approximately $275.6 million and were
contributed  by AMF  Bowling  as equity to Bowling  Worldwide  and used to repay
senior  bank  indebtedness   under  the  Credit   Agreement.   The  senior  bank
indebtedness  repaid remains  available for reborrowing,  and such repayment and
resulting  ability  to  reborrow  will  enable the  Company to incur  additional
indebtedness  under the Credit  Agreement to fund the Company's  ongoing bowling
center acquisition program and for other corporate purposes.

     The foregoing descriptions of the Debentures, the Indenture and the
Registration Rights Agreement are not complete and references are made to the
Indenture (including the form of Debenture attached as an annex thereto) and the
Registration Rights Agreement, filed as Exhibits 4.1 and 10.1, respectively, to
this Form 10-Q for a more complete description of their terms.



Note 11.  Condensed Consolidating Financial Statements

     The following condensed  consolidating  financial information presents: (i)
the condensed  consolidating  balance sheet as of March 31, 1998,  and condensed
consolidating  statements  of income and cash flows for the three  months  ended
March 31, 1998 and (ii)  elimination  entries  necessary to combine the entities
comprising the Company.

     Bowling  Worldwide's  senior  subordinated  notes and  senior  subordinated
discount notes are jointly and severally  guaranteed on a full and unconditional
basis by AMF  Group  Holdings  and the  first and  second-tier  subsidiaries  of
Bowling  Worldwide.  AMF  Bowling  and the  third-tier  subsidiaries  of Bowling
Worldwide have not provided guarantees of such indebtedness.


<PAGE>
<TABLE>

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

                       AMF BOWLING, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATING BALANCE SHEET
                              As of March 31, 1998
                                   (unaudited)
                                 (in thousands)
<CAPTION>
<S> <C>

                                                                               Non-
                                                           Guarantor         Guarantor     
                                                           Companies         Companies     Eliminations      Consolidated
                                                        -----------------  -------------- ----------------  ----------------
  Assets
Current assets:
  Cash and cash equivalents                                  $    27,222       $   2,371       $        -       $    29,593
  Accounts and notes receivable, net
     of allowance for doubtful accounts                           64,146           2,987                -            67,133
  Accounts receivable - intercompany                               7,917           1,962           (9,879)                -
  Inventories                                                     65,739           1,705                -            67,444
  Deferred taxes and other assets                                 16,684           1,943                -            18,627
                                                        -----------------  -------------- ----------------  ----------------
   Total current assets                                          181,708          10,968           (9,879)          182,797
Notes receivable - intercompany                                   16,660           1,663          (18,323)                -
Property and equipment, net                                      761,695          41,970            1,091           804,756
Investment in subsidiaries                                        24,717         630,254         (654,971)                -
Goodwill and other assets                                        895,632           6,766                -           902,398
                                                        -----------------  -------------- ----------------  ----------------
  Total assets                                               $ 1,880,412       $ 691,621       $ (682,082)      $ 1,889,951
                                                        =================  ============== ================  ================

  Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable                                           $    30,207       $   2,693       $        -       $    32,900
  Accounts payable - intercompany                                  2,000           7,879           (9,879)                -
  Accrued expenses                                                56,706           5,097                -            61,803
  Income taxes payable                                               503           4,206                -             4,709
  Long-term debt, current  portion                                29,251               -                -            29,251
                                                        -----------------  -------------- ----------------  ----------------
   Total current liabilities                                     118,667          19,875           (9,879)          128,663
Long-term debt                                                 1,099,921               -                -         1,099,921
Notes payable - intercompany                                       1,663          16,660          (18,323)                -
Other long-term liabilities                                        5,190               -                -             5,190
Deferred income taxes                                                  -               -                -                 -
                                                        -----------------  -------------- ----------------  ----------------
  Total liabilities                                            1,225,441          36,535          (28,202)        1,233,774
                                                        -----------------  -------------- ----------------  ----------------
Commitments and contingencies
Stockholders' equity:
  Common stock                                                         -             597                -               597
  Paid-in capital                                                748,526         747,429         (746,522)          749,433
  Retained earnings (deficit)                                    (75,381)        (74,766)          74,468           (75,679)
  Equity adjustment from foreign                                            
   currency translation                                          (18,174)        (18,174)          18,174           (18,174)
                                                        -----------------  -------------- ----------------  ----------------
  Total stockholders' equity                                     654,971         655,086         (653,880)          656,177
                                                        -----------------  -------------- ----------------  ----------------

  Total liabilities and stockholders' equity                 $ 1,880,412       $ 691,621       $ (682,082)      $ 1,889,951
                                                        =================  ============== ================  ================






<PAGE>


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

                       AMF BOWLING, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATING STATEMENT OF INCOME
                    For the Three Months Ended March 31, 1998
                                   (unaudited)
                                 (in thousands)
<CAPTION>

                                                                  Non-
                                                  Guarantor     Guarantor    
                                                  Companies     Companies   Eliminations  Consolidated 
                                                 ------------- ------------ ------------  -------------

  Operating revenue                                 $ 174,939     $ 12,625        $   -      $ 187,564
                                                 ------------- ------------ ------------  -------------

  Operating expenses:
   Cost of goods sold                                  36,417        2,440            -         38,857
   Bowling center operating expenses                   72,849        5,864            -         78,713
   Selling, general, and administrative expenses       16,045          894            -         16,939
   Depreciation and amortization                       25,249        1,624          (83)        26,790
                                                 ------------- ------------ ------------  -------------
     Total operating expenses                         150,560       10,822          (83)       161,299
                                                 ------------- ------------ ------------  -------------

  Operating income                                     24,379        1,803           83         26,265
                                                 ------------- ------------ ------------  -------------

  Nonoperating expenses (income):
   Interest expense                                    25,974            -            -         25,974
   Other expenses, net                                   (221)         794            -            573
   Interest income                                       (459)         (74)           -           (533)
   Equity in (income) loss of subsidiaries                (69)         732         (663)             -
                                                 ------------- ------------ ------------  -------------
  Total nonoperating expenses                          25,225        1,452         (663)        26,014
                                                 ------------- ------------ ------------  -------------

  Income (loss) before income taxes                      (846)         351          746            251
  Provision (benefit) for income taxes                   (535)       1,065            -            530
                                                 ------------- ------------ ------------  -------------

  Net income (loss) before equity in loss of
     joint ventures                                      (311)        (714)         746           (279)
  Equity in loss of joint ventures                       (352)           -            -           (352)
                                                 ------------- ------------ ------------  -------------
  Net loss                                          $    (663)    $   (714)       $ 746      $    (631)
                                                 ============= ============ ============  =============




<PAGE>


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

                       AMF BOWLING, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                    For the Three Months Ended March 31, 1998
                                   (unaudited)
                                 (in thousands)
<CAPTION>


                                                                                      Non-
                                                                    Guarantor      Guarantor      
                                                                    Companies      Companies      Eliminations    Consolidated 
                                                                  --------------  -------------  --------------- -----------------
  Cash flows from operating activities:
   Net loss                                                            $   (663)       $  (714)           $ 746          $   (631)
   Adjustments to reconcile net loss to net
    cash provided by operating activities:
     Depreciation and amortization                                       25,249          1,624              (83)           26,790
     Equity in loss of joint ventures                                       352              -                -               352
     Deferred income taxes                                                    -              -                -                 -
     Amortization of bond discount                                        5,667              -                -             5,667
     Equity in earnings of subsidiaries                                     (69)           732             (663)                -
     Loss on the sale of property and equipment, net                        269              -                -               269
     Changes in assets and liabilities:
      Accounts and notes receivable                                       7,522           (235)               -             7,287
      Receivables and payables - affiliates                              (2,406)         2,406                -                 -
      Inventories                                                       (10,203)           126                -           (10,077)
      Other assets                                                       (2,063)            16                -            (2,047)
      Accounts payable and accrued expenses                             (16,130)           328                -           (15,802)
      Income taxes payable                                               (1,532)           859                -              (673)
      Other long-term liabilities                                           (40)             -                -               (40)
                                                                  --------------  -------------  --------------- -----------------
    Net cash provided by operating activities                             5,953          5,142                -            11,095
                                                                  --------------  -------------  --------------- -----------------

  Cash flows from investing activities:
   Acquisitions of operating units, net of cash acquired                (60,792)        (4,823)               -           (65,615)
   Investments in and advances to joint ventures                         (4,565)             -                -            (4,565)
   Purchases of property and equipment                                  (11,075)          (566)               -           (11,641)
   Proceeds from sale of property and equipment                             104              -                -               104
                                                                  --------------  -------------  --------------- -----------------
    Net cash used in investing activities                               (76,328)        (5,389)               -           (81,717)
                                                                  --------------  -------------  --------------- -----------------

  Cash flows from financing activities:
   Proceeds from long-term debt, net of deferred financing costs         72,000              -                             72,000
   Payments on long-term debt                                            (9,093)             -                -            (9,093)
   Issuance of shares                                                     1,381              -                -             1,381
   Noncompete obligations                                                  (258)             -                -              (258)
                                                                  --------------  -------------  --------------- -----------------
    Net cash provided by financing activities                            64,030              -                -            64,030
                                                                  --------------  -------------  --------------- -----------------
    Effect of exchange rates on cash                                        110            285                -               395
                                                                  --------------  -------------  --------------- -----------------
    Net decrease in cash                                                 (6,235)            38                -            (6,197)
    Cash and cash equivalents at beginning of period                     33,457          2,333                -            35,790
                                                                  --------------  -------------  --------------- -----------------
    Cash and cash equivalents at end of period                         $ 27,222        $ 2,371            $   -          $ 29,593
                                                                  ==============  =============  =============== =================
</TABLE>





<PAGE>


Item 2.

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

     Information in this report contains 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".  These  forward-looking
statements  relate  to the plans  and  objectives  of AMF  Bowling,  Inc.  ("AMF
Bowling")  and  its  subsidiaries  (collectively,   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 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  execute  successfully  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,  (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
AMF Bowling and its  subsidiaries  to generate  sufficient cash flow in a timely
manner to satisfy  principal and interest payments on their  indebtedness,  (vi)
the  popularity  of bowling as an activity  in the United  States and abroad and
(vii) the  continuation  or worsening of economic  difficulties  currently being
experienced by certain countries in the Asia Pacific region. In addition, actual
results may differ materially from forward-looking  statements in this report as
a result of factors  generally  applicable  to companies in similar  businesses,
including,  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
elsewhere  in this  report.  AMF Bowling  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  information
contained  under  "Selected  Financial  Data"  and  AMF  Bowling's  Consolidated
Financial Statements (unaudited) included elsewhere herein.

     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 net
income or net  expenses.  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 U.S.  generally
accepted accounting principles.

General

     The  Company is  principally  engaged  in two  business  segments:  (i) the
ownership or operation of 399 U.S. bowling centers and 104 international bowling
centers  ("Bowling  Centers"),  including  fourteen joint ventures operated with
third  parties,  as of March  31,  1998;  and (ii) the  manufacture  and sale of
bowling equipment such as automatic  pinspotters,  automatic scoring  equipment,
bowling pins, lanes, ball returns, certain spare parts, and the resale of allied
products  such as bowling  balls,  bags,  shoes,  and certain  other spare parts
("Bowling Products").


<PAGE>

     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
discusses results of Bowling Centers and Bowling Products separately.

     The results of Bowling Centers, Bowling Products and the consolidated group
are set forth below.  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.  The results of Bowling  Centers  for the first  quarter of 1998
reflect the  inclusion of 140 centers  acquired  and one new center  constructed
since April 1, 1997.

Acquisitions

     The Company has continued,  and expects to continue, its aggressive bowling
center acquisition program. The Company is engaged in ongoing evaluations of and
discussions with third parties regarding  possible bowling center  acquisitions.
Management's plans to expand the bowling center operations are subject to, among
other  things,  the  availability  of funds and the  continuation  of  favorable
economic and financial conditions,  which are generally not within the Company's
control.

     From  January 1, 1998  through  March 31,  1998,  the  Company  acquired 29
bowling centers in the United States,  two centers in the United Kingdom and two
centers in Australia  from unrelated  sellers.  Between March 31, 1998 and April
30, 1998, the Company  acquired one bowling center in the United States,  eleven
centers  in the  United  Kingdom  and one  center in  Australia  from  unrelated
sellers.  See  "Note 8.  Acquisitions"  in the Notes to  Condensed  Consolidated
Financial Statements for a discussion of these transactions.




<PAGE>


                                AMF BOWLING, INC.
                             Selected Financial Data
                                   (unaudited)
                            (in millions of dollars)



                                                                Three Months
                                                               Ended March 31,
                                                            -------------------
                                                             1998         1997
                                                            -------     -------
Bowling Centers (before intersegment eliminations)
Operating revenue                                           $ 150.5     $ 108.5
                                                            -------     -------
Cost of goods sold                                             13.4         9.4
Bowling center operating expenses                              78.8        55.6
Selling, general, and administrative expenses                   1.5         1.6
Depreciation and amortization                                  21.9        16.1
                                                            -------     -------
Operating income                                            $  34.9     $  25.8

Bowling Products (before intersegment eliminations)
Operating revenue                                           $  41.1     $  52.0
Cost of goods sold                                             29.3        31.2
                                                            -------     -------
Gross profit                                                   11.8        20.8
Selling, general, and administrative expenses                  11.7         8.8
Depreciation and amortization                                   5.4         4.8
                                                            -------     -------
Operating income  (loss)                                    $  (5.3)    $   7.2
                                                            =======     =======

Consolidated
Operating revenue                                           $ 187.6     $ 157.6
                                                            -------     -------
Cost of goods sold                                             38.9        38.1
Bowling center operating expenses                              78.7        55.3
Selling, general, and administrative expenses                  16.9        14.0
Depreciation and amortization                                  26.8        20.5
                                                            -------     -------
Operating income                                               26.3        29.7
Interest expense, gross                                        26.0        27.7
Other expense, net                                              0.1         0.8
                                                            -------     -------
Income before income taxes                                      0.2         1.2
Provision for income taxes                                      0.5         1.1
                                                            -------     -------
Net income (loss) before equity in loss of  joint ventures     (0.3)        0.1
Equity in loss of joint ventures                               (0.3)        -
                                                            -------     -------
Net income (loss)                                           $  (0.6)    $   0.1
                                                            =======     =======

Selected Data:
   EBITDA
     Bowling Centers                                         $ 56.8      $ 41.9
     Bowling Products                                        $  0.1      $ 12.0

   EBITDA margin
     Bowling Centers                                           37.7%       38.6%
     Bowling Products                                           0.2%       23.1%





<PAGE>


Bowling Centers

     The Bowling Centers results shown in "Selected Financial Data" reflect both
U.S. and international  Bowling Centers operations.  Bowling Centers derives its
revenue and profits from three  principal  sources:  (i) bowling,  (ii) food and
beverage  and  (iii)  other  sources,  such as  shoe  rental,  amusement  games,
billiards  and pro shops.  For the three months  ended March 31, 1998,  bowling,
food and beverage and other revenue  represented 60.7%, 26.8% and 12.5% of total
Bowling  Centers  revenue,  respectively.  For the three  months ended March 31,
1997, bowling,  food and beverage and other revenue represented 62.2%, 24.9% and
12.9% of total Bowling Centers revenue, respectively.

First Quarter of 1998 Compared to First Quarter of 1997

     Bowling Centers  operating  revenue  increased $42.0 million,  or 38.7%. An
increase of $47.1 million is attributable to 155 new centers which were acquired
and one new center which was constructed after December 31, 1996, of which $45.2
million is from U.S. centers,  while $1.9 million is from international centers.
Of these new centers,  140 centers were acquired and one center was  constructed
since April 1, 1997.  Constant  centers  (centers in operation  for at least one
full fiscal year)  operating  revenue  decreased  $3.7  million,  or 3.6%.  U.S.
constant centers revenue  decreased $1.9 million  primarily as a result of lower
lineage  (games  per  lane  per  day)  caused  by mild  weather  and  aggressive
acquisition activity. International constant centers operating revenue decreased
$1.8  million  primarily  due  to  unfavorable  exchange  rate  fluctuations  in
Australia,  Japan,  Mexico  and  France.  On a  constant  exchange  rate  basis,
international  operating  revenue would have increased $0.1 million in the first
quarter of 1998  compared  to first  quarter of 1997.  Most  countries'  results
exceeded  those of the prior year except Japan and Hong Kong which were affected
by weak economies.  A decrease of $1.4 million was attributable to seven centers
which were closed since March 31, 1997.

     Cost of goods sold increased $4.0 million, or 42.6%,  primarily as a result
of the net increase in the number of centers.

     Operating expenses increased $23.2 million,  or 41.7%. An increase of $22.4
million  was  attributable  to the net  increase in the number of centers and an
increase of $0.8  million  was  primarily  attributable  to  increased  regional
staffing  costs and increased  advertising  spending  aimed at promoting the AMF
national  brand.  As a percentage  of its  revenue,  Bowling  Centers  operating
expenses  were  51.2% for the first  quarter of 1997  compared  to 52.4% for the
first quarter of 1998.

     Selling,  general and administrative  expenses  decreased $0.1 million,  or
6.3%, primarily due to exchange rate fluctuations.

     EBITDA increased $14.9 million, or 35.5%,  primarily as a result of the net
increase  in the number of centers.  Additionally,  Bowling  Centers  EBITDA was
impacted by increased staffing and advertising spending and, internationally, by
the exchange  rates as discussed  above.  EBITDA margin for the first quarter of
1998 was 37.7% compared to 38.6% in the first quarter of 1997.


Bowling Products

First Quarter of 1998 Compared to First Quarter of 1997

     Bowling Products  operating revenue decreased $10.9 million,  or 21.0%. New
Center  Package  (defined as all the  equipment  necessary to outfit one bowling
lane)  ("NCP"  or  "NCPs")  revenue  decreased  $6.1  million,   or  25.6%,  and
Modernization and Consumer  Products revenue  decreased $4.8 million,  or 17.1%.
Operating results have been adversely impacted by current economic  difficulties
in certain markets of the Asia Pacific region which have reduced the order rate,
level of shipments and backlog for NCPs and  Modernization and Consumer Products
sales. During the first quarter of 1998, Bowling Products recorded NCP shipments
of 504 units  compared to shipments  of 897 units for the first  quarter of 1997
and 1,013 units for the fourth  quarter of 1997.  The decrease in  Modernization
and  Consumer  Products  revenue is  primarily  due to  decreased  sales to Asia
Pacific distributors and U.S. customers.


<PAGE>

     Gross profit decreased $9.0 million, primarily as a result of the decreased
levels of shipments,  lower prices  attributable to the strong U.S. dollar which
resulted  in  competitive  pricing  pressure  and Bowling  Products'  unabsorbed
manufacturing overhead.

     Bowling Products selling,  general and  administrative  expenses  increased
$2.9 million,  or 33.0%, as a result of increases of $1.0 million in advertising
expenses and $1.9 million related to staffing. Of the increase in staffing, $0.5
million was attributable to  reclassification  of expenses from Bowling Products
cost of goods  sold,  $0.3  million  was  attributable  to  reclassification  of
expenses from Bowling Centers operating expenses and Corporate selling,  general
and administrative expenses, $0.5 million was attributable to increased staffing
expenses primarily in the international  sales offices,  $0.4 million related to
increased sales commissions,  and $0.2 million related to the establishment of a
regional office in Europe.

     Bowling Products EBITDA decreased $11.9 million,  or 99.2%, and the Bowling
Products EBITDA margin decreased from 23.1% in the first quarter of 1997 to 0.2%
in the first quarter of 1998 as a result of the lower gross profit and increased
selling, general and administrative expense discussed above.

Consolidated

Depreciation and Amortization

     Depreciation and amortization  increased $6.3 million or 30.7% in the first
quarter of 1998 compared to 1997. The increase is primarily  attributable due to
depreciation of property and equipment of centers acquired since March 31, 1997.
Incremental  depreciation  expense  was also  incurred  as a result  of  capital
expenditures.

Interest Expense

     Gross  interest  expense  decreased  $1.7  million,  or 6.1%,  in the first
quarter of 1998 compared to 1997. Interest savings associated with the reduction
of  bank  debt  and  redemption  of a  portion  of  Bowling  Worldwide's  senior
subordinated  discount  notes with  proceeds  of AMF  Bowling's  initial  public
offering (the  "Initial  Public  Offering")  were  partially  offset by interest
incurred on  increased  levels of bank debt as a result of center  acquisitions.
See  "Liquidity  and Capital  Resources"  for further  discussion  of bank debt.
Non-cash  bond interest  amortization  totaled $5.7 million and $8.3 million for
the three months ended March 31, 1998 and 1997, respectively.

Net Loss

     Net loss in the first  quarter  of 1998 was $0.6  million  compared  to net
income of $0.1  million  in the first  quarter  of 1997.  The  decrease  of $0.7
million was  primarily a result of  decreases  in Bowling  Products  revenue and
EBITDA discussed above and the increase in depreciation  expense.  Other expense
decreased  $0.7  million,  or 87.5%,  primarily as a result of foreign  currency
transaction  gains  experienced  in the first quarter of 1998 compared to losses
experienced  in the first  quarter  of 1997.  The  provision  for  income  taxes
decreased  $0.6 million in the first quarter of 1998 compared to the same period
in 1997.  The Company  recorded $0.3 million in equity in loss of joint ventures
in the first quarter of 1998.

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.

     In connection with the Acquisition,  the two principal  subsidiaries of the
Company  elected  under  Section  338 (h) (10) of the Code to  treat  the  stock
purchase in the  Acquisition as a deemed asset  acquisition  for the purposes of
U.S.  federal  income taxes.  These  elections  permitted both of the 


<PAGE>

affiliated companies to revalue their assets to fair market value and to treat
any amortizable goodwill as tax deductible over fifteen years.

     As  of  December  31,  1997,  the  Company  had  net  operating  losses  of
approximately $110.0 million and foreign tax credits of $12.4 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 2011. The Company had not recorded a valuation  reserve as of
December 31, 1997  because the Company  expects to utilize  these net  operating
losses and foreign tax credits prior to their expirations.


Liquidity

     The  Company's  primary  source of liquidity is cash provided by operations
and credit  facilities as described below.  Working capital on December 31, 1997
was $43.9 million compared to $54.1 million as of March 31, 1998, an increase of
$10.2 million.  Increases in working  capital were primarily  attributable to an
increase of $10.9  million in inventory  balances  primarily  due to new product
introductions, a decrease of $8.7 million in accounts payable and a net increase
of $3.7 million in other current assets and  liabilities.  These  increases were
offset by a decrease  of $6.2  million in cash  primarily  due to  interest  and
principal  payments on debt outstanding  under the Credit Agreement and internal
funding  of  bowling  center  acquisitions  and a  decrease  of $6.9  million in
accounts  receivable as a result of increased  collection efforts implemented in
the first quarter of 1998.

     Net cash flows provided by operating  activities were $23.6 million for the
three months ended March 31, 1997 compared to $11.1 million for the three months
ended March 31, 1998, a decrease of $12.5  million.  A decrease of $27.9 million
was caused by  decreased  levels of accounts  payable and  accrued  expenses,  a
decrease of $2.6 million was  attributable to lower levels of bond  amortization
resulting  from the  redemption  of a  portion  of  Bowling  Worldwide's  senior
subordinated discount notes in connection with the Initial Public Offering and a
decrease  of $0.7  million  was  attributable  to the net  loss of $0.6  million
recorded in the first  quarter of 1998 compared to net income of $0.1 million in
the same  period in 1997.  These  decreases  were offset by an increase of $11.4
attributable to lower levels of accounts receivable, an increase of $6.3 million
in depreciation and amortization and a net increase of $1.0 million attributable
to changes in other operating activities.

     Net cash flows used in  investing  activities  were $40.3  million  for the
three  months  ended  March 31,  1997  compared  to net cash flows used of $81.7
million for the three months ended March 31, 1998.  Bowling  Center  acquisition
spending and purchases of property and equipment  increased by $32.0 million and
$4.7  million,  respectively,  in the first quarter of 1998 compared to the same
period in 1997. In the first quarter of 1998, 33 centers were purchased compared
to 15 centers in the same period in 1997.  Investments  in and advances to joint
ventures  totaled  $4.6  million  in the first  quarter of 1998  compared  to no
investments in or advances to joint ventures in the first quarter of 1997. Other
cash flows provided from investing  activities decreased $0.1 million. See "Note
8. Acquisitions" and "Capital  Expenditures" for additional  discussion of these
investing activities.

     Net cash provided by financing  activities  was $28.3 million for the three
months ended March 31, 1997  compared to net cash  provided of $64.0 million for
the three months ended March 31, 1998, an increase of $35.7 million.  Borrowings
under the Credit Agreement  increased $43.0 million primarily as a result of the
increase in the number of centers acquired in the first quarter of 1998 compared
to the same  period in 1997.  Payments  on  long-term  debt were  higher by $9.1
million in 1998 compared to 1997 because the 1997 first quarter payment actually
occurred  in the second  quarter  of 1997.  In the first  quarter of 1998,  $1.4
million of common stock was issued. Of this amount, $1.2 was attributable to the
Active  West  acquisition  and $0.2  million  related to employee  stock  option
exercises.  Net cash flows provided by other financing activities increased $0.4
million.  See "Note 5. Long-Term Debt",  "Note 7. Employee  Benefit Plans",  and
"Note  8.  Acquisitions"  in  the  Notes  to  Condensed  Consolidated  Financial
Statements.

     As a result of the  aforementioned,  cash increased by $9.5 million for the
three months ended March 31, 1997 compared to a decrease of $6.2 million for the
three months ended March 31, 1998.

     For a description of the recent  offering by AMF Bowling of its zero coupon
convertible  debentures,  see  "Note  10.  Subsequent  Event"  in the  Notes  to
Condensed Consolidated Financial Statements and "-Capital Resources" below.

<PAGE>


Capital Resources

     The Company's total indebtedness increased substantially as a result of the
Acquisition and the Company's  ongoing bowling center  acquisition  program.  At
March 31, 1998,  the Company's  debt  structure  consisted of $684.3  million of
Senior Debt, $250.0 million of senior  subordinated  notes and $194.9 million of
senior  subordinated  discount  notes.  The Company's  Senior Debt  consisted of
$437.2 million outstanding under the Term Facilities, $245.1 million outstanding
under the Bank Facility and $2.0 million  represented  by one mortgage  note. At
March 31, 1998, the Company was also capitalized with equity of $656.2 million.

     The Company has the ability to borrow for general  corporate  purposes  and
for  acquisitions  pursuant  to the $355.0  million  Bank  Facility,  subject to
certain  conditions.  At March  31,  1998,  $109.9  million  was  available  for
borrowing  under the Bank  Facility.  Between March 31, 1998 and April 30, 1998,
additional  borrowings  under the Bank  facility  totaled $35.0 million and were
used to fund the acquisitions of bowling centers described above and for general
corporate purposes.  At April 30, 1998, $280.1 million was outstanding under the
Bank Facility.

     On May 12, 1998, AMF Bowling issued its zero coupon convertible  debentures
(the  "Debentures")  for gross proceeds of  approximately  $284.1  million.  The
Debentures,  which were sold in a private  placement to qualified  institutional
buyers, mature on May 12, 2018 and have a yield to maturity of 7% per annum. The
Debentures  were issued pursuant to an Indenture (the  "Indenture")  dated as of
May 12, 1998  between AMF  Bowling and The Bank of New York,  as Trustee,  at an
original  price  of  $252.57  per  $1,000  principal  amount  at  maturity.  The
Debentures  are  convertible at any time prior to maturity into shares of Common
Stock at a  conversion  rate of 8.6734  shares  per $1,000  principal  amount at
maturity.  If held to maturity and not redeemed or  repurchased  by AMF Bowling,
the  Debentures  will  accrue to an  aggregate  principal  amount at maturity of
$1.125 billion. The Debentures are not entitled to a sinking fund.

     The  Debentures  are not redeemable at the option of AMF Bowling before May
12, 2003.  Thereafter,  the  Debentures are redeemable for cash at the option of
AMF Bowling at redemption prices specified in the Debentures,  the form of which
is attached as an annex to the Indenture.

     The Debentures  will be purchased by AMF Bowling,  at the option of holders
of the  Debentures,  as of May 12,  2003,  May 12,  2008  and May 12,  2013  for
purchase prices specified in the Debentures. The Debentures may also be redeemed
at the option of the holders of the  Debentures  upon the occurrence of a Change
of Control (as defined in the Indenture) at redemption  prices  specified in the
Debentures.  AMF Bowling may elect to pay any such purchase  price or redemption
price in cash or Common Stock, or any combination thereof.

         AMF Bowling has reserved  9,757,575 shares of Common Stock for issuance
upon conversion, redemption or repurchase of the Debentures.

         In  connection  with the  issuance of the  Debentures,  AMF Bowling has
agreed pursuant to a registration  rights  agreement (the  "Registration  Rights
Agreement")  to  file  with  the  Securities  and  Exchange  Commission  a shelf
registration  statement  in  respect  of the  Debentures  and the  Common  Stock
issuable  on  conversion,  redemption  or  repurchase  thereof  . If  the  shelf
registration  statement has not been filed within 90 days, or declared effective
within 180 days, after May 12, 1998, AMF Bowling must pay liquidated  damages as
specified in the Registration  Rights Agreement.  AMF Bowling has agreed to keep
the shelf  registration  statement  effective  until the earlier of (i) the sale
pursuant to the shelf  registration  statement of all the securities  registered
thereunder  and  (ii)  the  expiration  of  the  holding  period  applicable  to
non-affiliates  of AMF Bowling under Rule 144(k) of the  Securities  Act of 1933
(which is currently two years).


<PAGE>

     The net proceeds of the offering were approximately $275.6 million and were
contributed  by AMF  Bowling  as equity to Bowling  Worldwide  and used to repay
senior  bank  indebtedness   under  the  Credit   Agreement.   The  senior  bank
indebtedness  repaid remains  available for reborrowing,  and such repayment and
resulting  ability  to  reborrow  will  enable the  Company to incur  additional
indebtedness  under the Credit  Agreement to fund the Company's  ongoing bowling
center acquisition program and for other corporate purposes.

     The foregoing descriptions of the Debentures, the Indenture and the
Registration Rights Agreement are not complete and references are made to the
Indenture (including the form of Debenture attached as an annex thereto) and the
Registration Rights Agreement, filed as Exhibits 4.1 and 10.1, respectively, to
this Form 10-Q for a more complete description of their terms.

     The Company has funded its cash needs  through the Bank Facility as well as
cash flow from operations. A substantial portion of the Company's available cash
will be applied to service outstanding indebtedness. For the quarter ended March
31,  1998,  the  Company  incurred  cash  interest  expense  of  $19.9  million,
representing  37.5% of EBITDA for the quarter.  For the quarter  ended March 31,
1997, the Company incurred cash interest expense of $18.9 million,  representing
37.6% of EBITDA for the quarter.

     The  indentures  governing  the  senior  subordinated  notes and the senior
subordinated  discount notes and the provisions of 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.

     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,
including the conditions of the debt and equity markets.  Based upon the current
level of operations, management believes that available cash flow, together with
available  borrowings under the Credit Agreement and other sources of liquidity,
will be adequate to meet the Company's requirements for working capital, capital
expenditures,  scheduled  payments of principal  of, and interest on, its Senior
Debt,  and  interest on the senior  subordinated  notes and senior  subordinated
discount notes. There can be no assurance,  however, 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, make necessary capital expenditures, or that any refinancing would
be available on commercially reasonable terms or at all.

Capital Expenditures

     For  the  three  months  ended  March  31,  1998,  the  Company's   capital
expenditures  were $11.6  million  compared to $6.9 million for the three months
ended March 31, 1997, an increase of $4.7 million.  Bowling Centers  maintenance
expenditures increased $2.2 million attributable to the higher number of centers
as a result of the Company's acquisition program,  Bowling Products expenditures
increased $1.9 million as a result of expenditures  on production  equipment for
certain new products,  and  expenditures  on  company-wide  information  systems
increased  $1.3 million.  These  increases were offset by a net decrease of $0.7
million in other expenditure categories.

     The  Company  funds  its  capital   expenditures  from  cash  generated  by
operations and, with respect to the construction and acquisition of new centers,
internally generated cash, the Bank Facility and issuances of common equity. The
Company's  management  believes that after the issuance of the  Debentures,  the
amount  available under the Bank facility will be adequate to fund the Company's
ongoing acquisition program at its current rate for approximately 12 months. See
"Note  8.  Acquisitions"  in  the  Notes  to  Condensed  Consolidated  Financial
Statements,  "--Liquidity" and "--Capital  Resources" for discussions of funding
of acquisitions of new bowling centers and a description of the Debentures.

Seasonality and Cyclicality

     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 


<PAGE>

across different regions of the U.S. and across eleven other countries, has
provided stability to the Company's 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, however, 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 U.S., 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 9. Business Segments" in the Notes to
Condensed Consolidated Financial Statements.

     Modernization  and Consumer  Products sales display  seasonality.  The U.S.
market, which is the largest market for Modernization and Consumer Products,  is
driven by the  beginning  of  league  play 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 four to ten year
life 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.,
South Korea and Taiwan) which, in the Company's  experience,  last five years or
more.  Current  economic  difficulties  in certain  markets of the Asia  Pacific
region have resulted in the reduction in the order rate,  level of shipments and
backlog for NCPs. See "--International Operations."


International Operations

     The  Company's  international  operations  are  subject to the usual  risks
inherent in operating abroad,  including, but not limited to, risks with respect
to currency  exchange  rates,  economic  and  political  destabilization,  other
disruption of markets, restrictive laws and actions by foreign governments (such
as  restrictions  on  transfer  of funds,  import and export  duties and quotas,
foreign  customs,  tariffs  and value  added  taxes and  unexpected  changes  in
regulatory  environments),  difficulty  in obtaining  distribution  and support,
nationalization,  the laws and policies of the United  States  affecting  trade,
international investment and loans, and foreign tax laws.

     The  Company  has a  history  of  operating  in a number  of  international
markets,  in some  cases,  for  over  thirty  years.  As in the  case  of  other
U.S.-based manufacturers with export sales, local currency devaluation increases
the cost of the  Company's  bowling  equipment  in that market.  As a result,  a
strengthening  U.S. dollar  exchange rate may adversely  impact sales volume and
profit margins during such periods.

     Current economic difficulties in certain markets of the Asia Pacific region
have  resulted in a reduction in the order rate,  level of shipments and backlog
for NCPs.  Management  believes  that many Asia Pacific  customers  are delaying
purchases  of NCP and  modernization  equipment  as they  await  the  return  of
economic  stability to their regions.  As of March 31, 1998, the NCP backlog was
1,612 units, which represents a reduction of 3.1% compared to a backlog of 1,663
units as of March 31,  1997,  and a reduction  of 6.6%  compared to a backlog of
1,725 units as of December 31, 1997.


<PAGE>

     For the quarter ended March 31, 1998, NCP sales and backlog to China, Japan
and other Asia  Pacific  markets  represented  53.2% and 62.2% of total NCP unit
sales and backlog, respectively. For the year ended December 31, 1997, NCP sales
and backlog to China, Japan and other Asia Pacific markets represented 72.7% and
70.4% of total NCP unit sales and backlog, respectively.

     Foreign  currency  exchange rates also impact the  translation of operating
results from  international  bowling  centers.  For the quarter  ended March 31,
1998, revenue and EBITDA of international  bowling centers represented 13.4% and
12.8% of  consolidated  results,  respectively.  For the quarter ended March 31,
1997, revenue and EBITDA of international  bowling centers represented 16.4% and
14.5% of  consolidated  results,  respectively.  For the year ended December 31,
1997, revenue and EBITDA of international  bowling centers represented 14.6% and
16.0% of consolidated results, respectively.

Backlog: Recent NCP Sales

     The  total  backlog  of  NCPs  was  1,612  units  as  of  March  31,  1998,
representing  a reduction  of 6.6%  compared  to 1,725 units as of December  31,
1997,  and a reduction of 3.1% compared to 1,663 units as of March 31, 1997. NCP
orders  included in the backlog are  sometimes  cancelled  by  customers  in the
normal course of business. Accordingly, the Company has experienced, and expects
to continue to experience,  the cancellation of a portion of its NCP orders. NCP
shipments were 504 units for the three months ended March 31, 1998, representing
a reduction  of 50.3%  compared to shipments of 1,013 units for the three months
ended  December 31, 1997,  and a reduction of 43.8% compared to shipments of 897
units for the three  months ended March 31, 1997,  largely  attributable  to the
recent economic  difficulties in the Asia Pacific region.  See  "--International
Operations."

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
material  adverse impact on the Company to the extent that  increased  borrowing
costs for floating rate debt may not be offset by increases in cash flow.

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.  In  management's  opinion,  the  various  claims in which  the  Company
currently  is involved are not likely to have a material  adverse  impact on its
financial  position or results of  operations.  However,  it is not  possible to
ensure the ultimate outcome of such claims.

     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.


Recent Accounting Pronouncements

     Effective  for the fiscal  year ended  December  31,  1998,  the Company is
required to adopt Statement of Financial  Accounting  Standard  ("SFAS") No. 130
"Reporting Comprehensive Income", SFAS No. 131 "Disclosures About Segments of an
Enterprise  and Related  Information  and SFAS No. 132  "Employers'  Disclosures
About Pensions and Other Post-Retirement  Benefits." 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. See "Note 2. Significant Accounting
Policies  -  Comprehensive  Income"  in  the  Notes  to  Condensed  Consolidated
Financial Statements regarding adoption of SFAS No. 130.



<PAGE>

Year 2000

     The Company is currently developing and installing new worldwide financial,
information,  retail and operational systems. Worldwide system implementation is
expected  to  be  complete  by  December  31,  1999.  In  connection  with  this
implementation, system programs have been designed so that the year 2000 will be
recognized as a valid date and will not affect the processing of  date-sensitive
information. As of March 31, 1998, the Company spent a total of $14.8 million on
systems installation. The Company expects to spend an additional $5.4 million to
complete the installation. In addition, the Company sells automatic scoring that
is computerized  and has developed a software  program for a cost to the Company
of approximately  $50,000 that will address the year 2000 issue in its automatic
scoring.  This  software  will be  made  available  to  customers  with  service
contracts at no cost and will be sold to customers  without  service  contracts.
The Company believes that the year 2000 issue is being  appropriately  addressed
through the  implementation  of these new systems and software  development  and
does not expect the year 2000  issue to have a  material  adverse  impact on the
financial position, results of operations or cash flows in future periods.






                                     PART II

Item 1. Legal

     The  Company  currently  and from time to time is  subject  to  claims  and
actions arising in the ordinary course of its business,  including environmental
claims, discrimination claims, workers' compensation claims, and personal injury
claims from customers of Bowling Centers.  In some actions,  plaintiffs  request
punitive or other damages that may not be covered by insurance.  In management's
opinion, the claims and actions in which the Company is involved will not have a
material adverse impact on its financial position or results of operations.
However, it is not possible to assure the outcome of such claims and actions.


Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits
           4.1    Indenture, dated as of May 12, 1998, between AMF Bowling, Inc.
                  and The Bank of New York,  as  trustee,  with  respect to zero
                  coupon convertible debentures.
         10.1     Registration  Rights  Agreement,  dated as of May 12, 1998, by
                  and among AMF Bowling, Inc. and certain other parties thereto,
                  with respect to zero coupon convertible debentures.
         27.1     Financial  Data  Schedule for the three months ended March 31,
                  1998.

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


<PAGE>



SIGNATURES

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

AMF Bowling, Inc.
(Registrant)


 /s/ Stephen E. Hare                                 May 15, 1998
----------------------------------
Stephen E. Hare
Executive Vice President,
Chief Financial Officer
(Duly Authorized Officer)


 /s/ Michael P. Bardaro                              May 15, 1998
---------------------------------
Michael P. Bardaro
Vice President, Corporate Controller
and Assistant Secretary
(Chief Accounting Officer)