# FORM 10-Q

|[X] | Quarterly
Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
for the period ended March 31, 2002
|--- | ----------------------------------------------------------------------------------------------------------------------------

|[   ] | Transition
Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of
1934
|----- | -----------------------------------------------------------------------------------------

---

|Delaware                                       | 36-3228107                          
|---------------------------------------------- | ------------------------------------
|                                               |                                     
|(State or other
jurisdiction of incorporation) | (I.R.S. Employer
Identification No.)
|                                               |                                     
|8700 West
Bryn Mawr Avenue, Chicago, Illinois  | 60631                               
|                                               |                                     
|(Address of principal
executive offices)       | (Zip 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:

As of April 30, 2002,
32,866,147 shares of the registrants common stock were outstanding.

# BALLY TOTAL
FITNESS HOLDING CORPORATION

# INDEX

|Page   | 
|------ | 
|Number | 

| | Item 1. | Financial statements: | 
| | ------- | --------------------- | 

| | Condensed
consolidated balance sheet (unaudited) | 
| | ------------------------------------------------ | 

| | March 31, 2002
and December 31, 2001 | 1 | 
| | ------------------------------------ | - | 

| | Consolidated
statement of income (unaudited) | 
| | -------------------------------------------- | 

| | Three months
ended March 31, 2002 and 2001 | 2 | 
| | ------------------------------------------ | - | 

| | Consolidated
statement of stockholders' equity (unaudited) | 
| | ---------------------------------------------------------- | 

| | Three months ended
March 31, 2002 | 3 | 
| | --------------------------------- | - | 

| | Consolidated
statement of cash flows (unaudited) | 
| | ------------------------------------------------ | 

| | Three months
ended March 31, 2002 and 2001 | 4 | 
| | ------------------------------------------ | - | 

| | Notes to condensed
consolidated financial statements | 
| | ---------------------------------------------------- | 

| | (unaudited) | 6 | 
| | ----------- | - | 

| | Item 2. | Management's discussion and analysis of financial | 
| | ------- | ------------------------------------------------- | 

| | condition
and results of operations | 10 | 
| | ----------------------------------- | -- | 

| | Item 6. | Exhibits and reports on Form 8-K | 14 | 
| | ------- | -------------------------------- | -- | 

|SIGNATURE PAGE |  | 15 | 
|-------------- |  | -- | 

# PART I.  
FINANCIAL INFORMATION

## Item 1.  
Financial Statements

`March 31   December 31
                                                             2002          2001
                                                      -----------   -----------
                           ASSETS

Current assets:
  Cash and equivalents                                 $    9,530    $    9,310
  Installment contracts receivable, net                   310,048       284,611
  Other current assets                                     68,680        68,899
                                                       ----------    ----------
    Total current assets                                  388,258       362,820

Installment contracts receivable, net                     286,281       273,607
Property and equipment, less accumulated
  depreciation and amortization of $501,131
  and $490,116                                            648,790       628,634
Intangible assets, less accumulated
  amortization of $80,408 and $80,256                     242,097       237,037
Deferred income taxes                                      74,967        76,104
Deferred membership origination costs                     117,003       112,959
Other assets                                               30,058        25,729
                                                       ----------    ----------
                                                       $1,787,454    $1,716,890
                                                       ==========    ==========

            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                     $   65,721    $   50,471
  Income taxes payable                                      1,507         1,974
  Deferred income taxes                                    26,733        32,346
  Accrued liabilities                                      86,418        75,309
  Current maturities of long-term debt                     26,261        25,302
  Deferred revenues                                       307,055       294,930
                                                       ----------    ----------
    Total current liabilities                             513,695       480,332

Long-term debt, less current maturities                   653,557       639,869
Other liabilities                                          12,659        12,555
Deferred revenues                                          75,296        71,400
Stockholders' equity                                      532,247       512,734
                                                       ----------    ----------
                                                       $1,787,454    $1,716,890
                                                       ==========    ==========`

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------
Net revenues:
  Membership revenues                                  $  182,694    $  173,180
  Products and services                                    52,417        36,436
  Miscellaneous revenue                                     5,315         4,246
                                                       ----------    ----------
                                                          240,426       213,862

Operating costs and expenses:
  Fitness center operations                               137,804       122,375
  Products and services                                    33,033        23,121
  Member processing and collection centers                 10,952        10,496
  Advertising                                              16,509        15,859
  General and administrative                                7,900         7,243
  Depreciation and amortization                            17,439        17,912
                                                       ----------    ----------
                                                          223,637       197,006
                                                       ----------    ----------

Operating income                                           16,789        16,856

Finance charges earned                                     17,680        17,831
Interest expense                                          (14,643)      (15,958)
Other interest income                                          74           266
                                                       ----------    ----------
                                                            3,111         2,139
                                                       ----------    ----------

Income before income taxes                                 19,900        18,995
Income tax provision                                         (498)         (350)
                                                       ----------    ----------

Net income                                             $   19,402    $   18,645
                                                       ==========    ==========

Basic earnings per common share                        $      .61    $      .75
                                                       ==========    ==========

Diluted earnings per common share                      $      .59    $      .65
                                                       ==========    ==========`

`Common stock                                  Unearned
                               -------------------                            compensation     Common       Total
                                             Par    Contributed  Accumulated   (restricted    stock in   stockholders'
                                 Shares     value     capital      deficit        stock)      treasury      equity
                               ----------  -------  -----------  -----------  ------------  -----------  -------------

Balance at December 31, 2001   32,380,557   $  329    $ 657,546   $(107,807)   $ (26,559)    $ (10,775)    $ 512,734

Net income                                                           19,402                                   19,402

Issuance of common stock
  under long-term incentive
  plan                             60,000        1        2,519                   (2,520)

Issuance of common stock
  under stock purchase
  and option plans                 37,246        1          970                                                  971

Purchases of common stock
  for treasury                    (54,500)                                                        (860)         (860)
                               ----------   ------    ---------   ---------    ---------     ---------     ---------

Balance at March 31, 2002      32,423,303   $  331    $ 661,035   $ (88,405)   $ (29,079)    $ (11,635)    $ 532,247
                               ==========   ======    =========   =========    =========     =========     =========`

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------
Operating:
  Net income                                           $   19,402    $   18,645
  Adjustments to reconcile--
    Depreciation and amortization, including
      amortization included in interest expense            18,468        18,848
    Change in operating assets and liabilities            (12,425)       25,044
                                                       ----------    ----------
  Cash provided by operating activities                    25,445        62,537

Investing:
  Purchases and construction of property
    and equipment                                         (23,032)      (23,569)
  Purchases of real estate                                (11,510)
  Acquisitions of businesses and other                     (2,515)       (1,055)
                                                       ----------    ----------
  Cash used in investing activities                       (37,057)      (24,624)

Financing:
  Debt transactions--
    Net borrowings (repayments) under revolving
      credit agreement                                     17,500       (69,500)
    Net repayments of other long-term debt                 (5,779)       (5,048)
                                                       ----------    ----------
  Cash provided (used) by debt transactions                11,721       (74,548)

  Equity transactions--
    Proceeds from sale of common stock                                   53,827
    Proceeds from exercise of warrants                                   11,609
    Proceeds from issuance of common stock under
      stock purchase and option plans                         971         1,448
    Purchases of common stock for treasury                   (860)
                                                       ----------    ----------
  Cash provided (used) by financing transactions           11,832        (7,664)
                                                       ----------    ----------

Increase in cash and equivalents                              220        30,249
Cash and equivalents, beginning of period                   9,310        13,074
                                                       ----------    ----------
Cash and equivalents, end of period                    $    9,530    $   43,323
                                                       ==========    ==========`

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------
Supplemental Cash Flows Information:

Changes in operating assets and liabilities,
    Decrease (increase) in installment contracts
      receivable                                       $  (38,111)   $   17,594
    Increase in other current and other assets             (2,597)       (3,189)
    Increase in deferred membership origination costs      (4,044)       (2,150)
    Increase in accounts payable                           15,250         2,178
    Decrease in income taxes payable and deferred
      income taxes                                         (2,143)         (117)
    Increase in accrued and other liabilities              11,210         5,607
    Increase in deferred revenues                           8,010         5,121
                                                       ----------    ----------
  Change in operating assets and liabilities           $  (12,425)   $   25,044
                                                       ==========    ==========

Cash payments for interest and income taxes
  were as follows--
    Interest paid                                      $    6,879    $    8,890
    Interest capitalized                                     (719)       (1,031)
    Income taxes paid, net                                  2,636           467

Investing and financing activities exclude the
  following non-cash transactions--
    Acquisitions of property and equipment
      through capital leases/borrowings                $    2,885    $    5,977
    Common stock issued under long-term incentive
      plan                                                  2,519`

## Basis of
presentation

The accompanying condensed consolidated financial statements include the
accounts of Bally Total Fitness Holding Corporation (the "Company")
and the subsidiaries that it controls. The Company, through its subsidiaries, is
a commercial operator of fitness centers in North America with over 400
facilities concentrated in 29 states and Canada. The Company operates in one
industry segment, and all significant revenues arise from the commercial
operation of fitness centers, primarily in major metropolitan markets in the
United States and Canada. Unless otherwise specified in the text, references to
the Company include the Company and its subsidiaries. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements included in the Companys Annual Report
on Form 10-K for the year ended December 31, 2001.

All adjustments have been recorded which are, in the opinion of management,
necessary for a fair presentation of the condensed consolidated balance sheet of
the Company at March 31, 2002, its consolidated statements of income for the
three months ended March 31, 2002 and 2001, its consolidated statement of
stockholders equity for the three months ended March 31, 2002, and its
consolidated statements of cash flows for the three months ended March 31, 2002
and 2001. All such adjustments were of a normal recurring nature.

The accompanying condensed consolidated financial statements have been prepared
in conformity with generally accepted accounting principles which require the
Companys management to make estimates and assumptions that affect the
amounts reported therein. Actual results could vary from such estimates. In
addition, certain reclassifications have been made to prior period financial
statements to conform with the 2002 presentation.

## Seasonal
factors

The Companys operations are subject to seasonal factors and, therefore,
the results of operations for the three months ended March 31, 2002 and 2001 are
not necessarily indicative of the results of operations for the full year.

## Installment
contracts receivable

`March 31   December 31
                                                             2002          2001
                                                       ----------    ----------
Current:
  Installment contracts receivable                     $  428,958    $  397,180
  Unearned finance charges                                (45,743)      (44,898)
  Allowance for doubtful receivables
    and cancellations                                     (73,167)      (67,671)
                                                       ----------    ----------
                                                       $  310,048    $  284,611
                                                       ==========    ==========

Long-term:
  Installment contracts receivable                     $  368,234    $  358,115
  Unearned finance charges                                (21,088)      (21,675)
  Allowance for doubtful receivables
    and cancellations                                     (60,865)      (62,833)
                                                       ----------    ----------
                                                       $  286,281    $  273,607
                                                       ==========    ==========`

## Allowance for
doubtful receivables and cancellations

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------

Balance at beginning of period                         $  130,504    $  132,277
Contract cancellations and
  write-offs of uncollectible
  amounts, net of recoveries                              (90,833)      (87,636)
Provision for cancellations and
  doubtful receivables                                     94,361        90,975
                                                       ----------    ----------
Balance at end of period                               $  134,032    $  135,616
                                                       ==========    ==========`

## Membership
revenues

We are presenting gross committed membership fees to expand the presentation of
originating membership data as the Company now operates under several brands,
membership structures and an evolving menu of products and services accompanying
certain membership programs. Gross committed membership fees represent the gross
contracted value of memberships originated during the periods, inclusive of
initial membership fees, monthly dues, finance charges, and products and
services included in membership programs. The following is a reconciliation of
gross committed membership fees to initial membership fees originated, net:

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------

Gross committed membership fees                        $  320,747    $  292,458
Less:  Committed monthly dues                             (64,340)      (40,150)
       Provision for cancellations and
         doubtful receivables                             (94,361)      (90,975)
       Unearned finance charges and other                 (42,516)      (42,127)
       Products and services revenues
         included in membership programs                  (19,341)      (14,086)
                                                       ----------    ----------
Initial membership fees originated, net                $  100,189    $  105,120
                                                       ==========    ==========`

The following presents the components of membership revenues as presented in the
accompanying consolidated statement of income:

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------
Initial membership fees:
 Originated, net                                       $  100,189    $  105,120
 Increase in deferral                                      (8,470)       (5,734)
                                                       ----------    ----------
                                                           91,719        99,386
Dues:
 Dues collected                                            90,515        73,181
 Decrease in deferral                                         460           613
                                                       ----------    ----------
                                                           90,975        73,794
                                                       ----------    ----------
Membership revenues                                    $  182,694    $  173,180
                                                       ==========    ==========`

## Products and
services

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------
Net revenues:
  Retail and nutritional supplements--
    Membership programs                                $    8,785    $    8,398
    Direct sales                                           13,824        10,404
  Personal training--
    Membership programs                                    10,556         5,688
    Direct sales                                           17,701        10,508
  Financial services                                        1,551         1,438
                                                       ----------    ----------
                                                           52,417        36,436
Operating costs and expenses:
  Retail and nutritional supplements                       16,346        13,248
  Personal training                                        16,687         9,873
                                                       ----------    ----------
                                                           33,033        23,121
                                                       ----------    ----------
Contribution margin                                    $   19,384    $   13,315
                                                       ==========    ==========`

## Earnings per
common share

Basic earnings per common share for each period is computed based on the
weighted average number of shares of common stock outstanding of 31,741,422 and
24,816,783 for the three months ended March 31, 2002 and 2001, respectively.
Diluted earnings per common share for each period includes the addition of
common stock equivalents of 1,253,857 and 3,935,644 for the three months ended
March 31, 2002 and 2001, respectively. Common stock equivalents represent the
dilutive effect of the assumed exercise of outstanding warrants and stock
options.

## New accounting
pronouncements

The Company has adopted in the first quarter of 2002 the provisions of Statement
of Financial Accounting Standards No. 142, Goodwill and Other Intangible
Assets. As a result, the Company has ceased amortization of goodwill in the
first quarter and, in accordance with the provisions of this new standard, has
determined that recorded goodwill is not impaired . The following table presents
prior year first quarter net income and earnings per share adjusted to add back
goodwill amortization:

`Earnings per share
                                                             ------------------
                                             Net income       Basic     Diluted
                                             ----------      -------    -------

As reported                                  $   18,645      $  0.75    $  0.65
Add back: goodwill amortization                   1,868         0.08       0.06
                                             ----------      -------    -------
As adjusted                                  $   20,513      $  0.83    $  0.71
                                             ==========      =======    =======`

## Income Taxes

At March 31, 2002, for accounting purposes, the Company has approximately
$100,000 of unrecognized federal net operating loss carryforwards. Separately,
the alternative minimum tax ("AMT") net operating loss carryforwards have been
substantially recognized. Therefore, having fully recognized AMT net operating
loss carryforwards for reporting purposes, the Companys federal income tax
rate on future earnings will increase to 20%. The 20% rate will remain in effect
until such time as all of its AMT credits are fully utilized, which is not
currently expected before 2004. In the first quarter of 2002, the Company
reduced its valuation allowance against its net operating loss carryforwards by
approximately $4,000 which offset charges related to its provision for
alternative minimum taxes.

For federal income tax payment purposes, the Company has available net operating
loss carryforwards exceeding $350,000 and AMT net operating loss carryforwards
in excess of $230,000. Therefore, the Company currently does not expect to make
any significant federal tax payments earlier than 2004. At such time, the
Company will be required to pay taxes at the 20% AMT rate for periods currently
estimated to extend beyond 2005, including those periods benefited by AMT
credits. For accounting purposes, the 2002 federal tax provision will consist
entirely of non-cash deferred income tax charges.

## Item 2.  
Management's Discussion and Analysis of Financial Condition and Results of Operations

## Comparison of
the Three Months Ended March 31, 2002 and 2001

Net revenues for the first quarter of 2002 were $240.4 million compared to
$213.8 million in 2001, an increase of $26.6 million (12%), inclusive of $17.5
million (8%) attributable to the recently acquired Crunch Fitness. Net revenues
from comparable fitness centers increased 2%. This increase in net revenues
resulted from the following:

- Membership revenues
increased $9.5 million (5%) over the prior year quarter, including a 23%
increase in dues revenue recognized during the period. The provision for
doubtful receivables and cancellations, included as a direct reduction of
membership revenue, was 41% of the gross financed portion of membership fee
originations for both periods.
- Products and services
revenue increased $16.0 million (44%) over the 2001 quarter, primarily
reflecting the continued growth of personal training services, nutritional
product sales and the addition of Crunch Fitness, which accounted for $5.2
million of the increase.
- Miscellaneous revenue
increased $1.1 million (25%) over the 2001 quarter, primarily reflecting
additional revenue from co-marketing arrangements.

The weighted-average number of fitness centers increased to 406 from 385 in the
first quarter of 2001, an increase of 5%, including a 57% increase in the
weighted-average number of centers operating under the Companys upscale
brands from 35 to 55, largely resulting from the December 31, 2001 acquisition
of Crunch Fitness.

To further clarify the presentation of membership revenue data as the Company
grows with several brands, membership structures and an evolving menu of
products and services accompanying certain membership plans, we are providing
additional metrics in our discussion and analysis of results of operations. The
following data is intended to more clearly report membership origination trends
and the committed membership fees from originations during the period
notwithstanding the different membership structures. Monthly membership fee
averages and gross committed membership fees presented below include the retail
value of products and services contracted as part of originating memberships
during the periods, which are presented as an element of "Products and Services"
revenue in the accompanying consolidated statement of income. Data is presented
on a gross basis inclusive of finance charges and before any reduction for the
provision for doubtful receivables and cancellations.

The number of new members joining increased 7% during the first quarter of 2002
compared with the same quarter a year ago, with 3% growth at our flagship Bally
Total Fitness clubs. The gross committed monthly membership fees originated
during the first quarter of 2002 averaged $45 versus $41 in the year ago
quarter, a 10% increase. This increase results primarily from higher monthly
dues included in memberships originated at our Bally Total Fitness clubs and the
addition of Crunch Fitness with its higher membership fee structure. The average
committed duration of memberships originated during the first quarter of 2002
was 31.2 months versus 32.8 months in the prior year quarter, a 5% decrease.
This decrease resulted primarily from the shorter initial commitment of
memberships offered at Crunch Fitness and the addition of five new clubs in
states and provinces that limit contract duration to twelve months. As a result,
and despite the negative impact of the earlier Easter holiday and spring break
in March 2002, gross committed membership fees during the first quarter rose 10%
compared to the 2001 quarter.

Operating income for the first quarter of 2002 of $16.8 million was unchanged
from the prior year period. Net revenues increased $26.6 million (12%) for the
first quarter of 2002, offset by a $27.1 million (15%) increase in operating
costs and expenses, and depreciation and amortization decreased by $.5 million.
Earnings before interest, taxes, depreciation and amortization, including
finance charges earned ("EBITDA") was $51.9 million versus $52.6 million for the
last year quarter, a 1% decrease. The EBITDA margin was 22% in the 2002 quarter
compared to 25% in the 2001 period. This decrease is attributable in part to the
lower level of deferred revenue available for recognition at the start of 2002
as compared to that available at the beginning of the prior year, and the
growing proportion of clubs open less than three years which, due to deferred
revenue accounting and their immature membership dues base, yield below-average
margins compared to mature clubs. Additionally, operating margins on the
recently acquired Crunch Fitness were historically lower than our mature clubs
and are expected to improve as its operations are fully integrated. Fitness
center operating expenses increased $15.4 million (13%) due principally to
incremental costs of operating new fitness centers, including the 19 additional
centers added with the Crunch Fitness acquisition, which represented
approximately $11 million of the increase. Products and services expenses
increased $9.9 million (43%) to support the revenue growth of product and
service offerings. Contribution margin from products and services increased to
$19.4 million from $13.3 million in the prior year quarter, a 46% increase, with
a contribution margin percentage of 37% in both periods. Member processing and
collection center expenses increased $.5 million from the prior year quarter,
reflecting increased costs to serve the higher number of clubs and members as
compared to the prior year period. Advertising expenses increased $.7 million
(4%) compared to the prior year. General and administrative expenses increased
$.7 million (9%) compared to the prior year quarter to support the
Companys overall growth. Depreciation and amortization expense decreased
$.5 million, resulting from additional depreciation and amortization expense of
$1.4 million due to increased expenditures for property and equipment and
acquired fitness centers during the past two years, offset by the elimination of
goodwill amortization of $1.9 million in the prior year quarter as a result of
the adoption of Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets.

Finance charges earned in excess of interest expense totaled $3.1 million in the
first quarter of 2002, an increase of $1.0 million over the prior year period
resulting from lower interest rates on the Companys net borrowings.

## Liquidity and
Capital Resources

Cash flows from operating activities were $25.4 million in the 2002 quarter
compared to $62.5 million in the 2001 quarter. During the first and third
quarters of 2001, we sold a portion of our installment contracts receivable
portfolio to a major financial institution at net book value, with combined
proceeds of $105 million. Excluding the impact of the sales of receivables in
2001, and net of the change in dues prepayments during the periods, cash flows
from operating activities were $41.1 million in first quarter 2002, versus $22.3
million in 2001, an $18.8 million increase. The following table sets forth cash
flows from operating activities on a comparable basis to exclude the impact of
last years first quarter sale of receivables, to add back actual cash
collections on the sold portfolio, and to reflect the impact of changes in dues
prepayments during each of the periods (in thousands):

`Three months ended
                                                                       March 31
                                                       ------------------------
                                                             2002          2001
                                                       ----------    ----------

Cash flows from operating activities, as reported      $   25,445    $   62,537

  Acceleration of collections through bulk sale of
    installment contracts receivable                                    (45,000)
  Collections on installment contracts receivable
    sold                                                   16,957         3,598
  Change in dues prepayments                               (1,325)        1,130
                                                       ----------    ----------

Cash flows from operating activities
  on a comparable basis                                $   41,077    $   22,265
                                                       ==========    ==========`

Our bank credit facility, dated November 10, 1999, as amended in December 2001,
provides up to $225.0 million of availability consisting of a three-year $135.0
million term loan and a $90.0 million three-year revolving credit facility. The
amount available under the revolving credit facility is reduced by any
outstanding letters of credit, which cannot exceed $30.0 million. As of March
31, 2002, the Company had drawn $35.5 million on its $90 million revolving
credit line and had outstanding letters of credit totaling $5.9 million. The
$135.0 million term loan is repayable in 13 installments. The first installment
of $250,000 was paid in December 2001, 11 quarterly installments of $460,000
began March 31, 2002 and the final installment of $129,690,000 is due November
2004. We have no scheduled principal payments under our subordinated debt until
October 2007. Our debt service requirements, including interest, through March
31, 2003 are approximately $76.3 million. During April 2002, the Company repaid
the remaining balance outstanding on its 1996 securitization ($35.6 million at
March 31, 2002) with proceeds from its 2001 securitization facility. We believe
to the extent required, that we will be able to satisfy our short-term
requirements for debt service and capital expenditures out of available cash
balances, cash flows from operations and borrowings on the revolving credit
facility. In addition to cash from operating activities, we believe our
longer-term debt service requirements through 2004 can be satisfied by
availability on our bank credit facility, including extensions, expansion of our
securitization facility, other secured borrowings or through additional
offerings of our common stock.

We are authorized to repurchase up to 1,500,000 shares of our common stock on
the open market from time to time. We repurchased 625,100 shares between August
1998 and November 1999 at an average price of $18 per share, and 54,500
shares in February 2002 at $16 per share.

Capital expenditures totaled $23.0 million for property and equipment, and $11.5
million for purchases of real estate in the first quarter of 2002. Property and
equipment expenditures are expected to total approximately $55 million for the
remainder of 2002. The Company does not anticipate any additional real estate
purchases in 2002.

## Forward-Looking
Statements

Forward-looking statements in this Form 10-Q including, without limitation,
statements relating to our plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. These factors include,
among others, the following: general economic and business conditions;
competition; success of operating initiatives, advertising and promotional
efforts; existence of adverse publicity or litigation; acceptance of new product
offerings; changes

in business strategy or
plans; quality of management; availability, terms, and development of capital;
business abilities and judgment of personnel; changes in, or the failure to
comply with, government regulations; regional weather conditions; and other
factors described in this Form 10-Q or in other of our filings with the
Securities and Exchange Commission. We are under no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

# BALLY TOTAL
FITNESS HOLDING CORPORATION

# PART II.  
OTHER INFORMATION

## Item 6.  
Exhibits and reports on Form 8-K

| | (a) | Reports on Form 8-K:
| | --- | --------------------

| |                   |           | Financial 
| | ----------------- | --------- | ----------
| | Date              | Items     | Statements
| |                   |           |           
| | January 2, 2002   | #5 and #7 | None      
| |                   |           |           
| | February 13, 2002 | #5 and #7 | None      

# BALLY TOTAL
FITNESS HOLDING CORPORATION

# SIGNATURE
PAGE

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

| | BALLY TOTAL FITNESS HOLDING CORPORATION                       
| | --------------------------------------------------------------
| |                                                               
| | Registrant                                                    
| |                                                               
| |                                                               
| | /s/ John W. Dwyer                                             
| |                                                               
| | John W. Dwyer                                                 
| | Executive
Vice President, Chief Financial Officer and Director
| | (principal financial officer)