##### Table of Contents

---

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 December 26, 2004



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 001-12131



---



AMF BOWLING WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)



---



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 13-3873272                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer 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)





(Former name, former address and former fiscal year, if changed since last report.)



---



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 ̈



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



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



As of December 26, 2004, there were issued and
outstanding 1,000 shares of the registrants common stock, $0.01 par value, all of which were held of record by Kingpin Intermediate Corp., a wholly-owned subsidiary of Kingpin Holdings, LLC.



---



---

##### Table of Contents



AMF BOWLING WORLDWIDE, INC.



TABLE OF
CONTENTS



|           |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                       |  | Page
|           |  | PART I                                                                                |  |     
|Item 1.    |  | Financial Statements                                                                  |  |     
|           |  |                                                                                      
|           |  | Condensed Consolidated Balance Sheets (unaudited)                                     |  | 2   
|           |  |                                                                                      
|           |  | Condensed Consolidated Statements of Operations (unaudited)                           |  | 3   
|           |  |                                                                                      
|           |  | Condensed Consolidated Statements of Cash Flows (unaudited)                           |  | 4   
|           |  |                                                                                      
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                      |  | 5   
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 24  
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 40  
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 41  
|           |  |                                                                                      
|           |  | PART II                                                                               |  |     
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |  | 42  
|           |  |                                                                                      
|Item 6.    |  | Exhibits                                                                              |  | 43  
|           | 
|Signatures |  | 44                                                                                   



1



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)



PART I



ITEM 1. FINANCIAL STATEMENTS



|                                                                                                         |  |                  |         |   |              |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ------------ | - | ------- | -
|                                                                                                         |  | New Company      |        
|(In thousands, except share and per share data)                                                          |  | December 26,2004 |         |   | June 27,2004 |  
|Assets                                                                                                   |  |                  |         |   |              |   |         |  
|Current assets:                                                                                          |  |                  |         |   |              |   |         |  
|Cash and cash equivalents                                                                                |  | $                | 31,284  |   |              | $ | 12,734  |  
|Accounts and notes receivable, net of allowance for doubtful accounts of $4,239 and $4,155, respectively |  |                  | 24,465  |   |              |   | 25,737  |  
|Inventories, net                                                                                         |  |                  | 31,854  |   |              |   | 30,745  |  
|Prepaid expenses and other current assets                                                                |  |                  | 13,452  |   |              |   | 19,231  |  
|Assets held for sale (Note 3)                                                                            |  |                  | 51,125  |   |              |   |        |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total current assets                                                                                     |  |                  | 152,180 |   |              |   | 88,447  |  
|                                                                                                         |  |                 
|Property and equipment, net                                                                              |  |                  | 268,537 |   |              |   | 363,956 |  
|Other assets                                                                                             |  |                  | 44,132  |   |              |   | 49,704  |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total assets                                                                                             |  | $                | 464,849 |   |              | $ | 502,107 |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Liabilities and Stockholders Equity                                                                     |  |                  |         |   |              |   |         |  
|Current liabilities:                                                                                     |  |                  |         |   |              |   |         |  
|Accounts payable                                                                                         |  | $                | 13,520  |   |              | $ | 21,661  |  
|Accrued expenses and other liabilities                                                                   |  |                  | 75,658  |   |              |   | 79,979  |  
|Current portion of long-term debt                                                                        |  |                  | 1,559   |   |              |   | 2,294   |  
|Liabilities held for sale (Note 3)                                                                       |  |                  | 10,011  |   |              |   |        |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total current liabilities                                                                                |  |                  | 100,748 |   |              |   | 103,934 |  
|                                                                                                         |  |                 
|Long-term debt, less current portion                                                                     |  |                  | 239,967 |   |              |   | 286,503 |  
|Liabilities, subject to resolution                                                                       |  |                  | 213     |   |              |   | 233     |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total liabilities                                                                                        |  |                  | 340,928 |   |              |   | 390,670 |  
|                                                                                                         |  |                 
|Stockholders equity:                                                                                    |  |                  |         |   |              |   |         |  
|Common stock ($0.01 par value, 1,000 shares authorized and outstanding)                                  |  |                  |        |   |              |   |        |  
|Paid-in capital                                                                                          |  |                  | 133,716 |   |              |   | 133,716 |  
|Accumulated deficit                                                                                      |  |                  | (5,945  | ) |              |   | (18,992 | )
|Accumulated other comprehensive loss                                                                     |  |                  | (3,850  | ) |              |   | (3,287  | )
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total stockholders equity                                                                               |  |                  | 123,921 |   |              |   | 111,437 |  
|                                                                                                         |  |                  |         |   |              |   |         |  
|Total liabilities and stockholders equity                                                               |  | $                | 464,849 |   |              | $ | 502,107 |  
|                                                                                                         |  |                  |         |   |              |   |         |  



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



2



---

##### Table of Contents



AMF BOWLING WORLDWIDE, INC



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|------------------------------------------------------------ |  | ------------------ | ------- | - | ----------------------------- | - | ------- | -------------------- |  | - | ----------------------------- | - |  | - | ------- | -
|                                                             |  | NewCompany         |         |   | ReorganizedPredecessorCompany |   |         | New Company          |  |   | ReorganizedPredecessorCompany |  
|(In thousands)                                               |  | 2005 SecondQuarter |         |   | 2004 SecondQuarter            |   |         | 2005 FirstSix Months |  |   | 2004 FirstSix Months          |  
|Operating revenue                                            |  | $                  | 149,290 |   |                               | $ | 150,093 |                      |  | $ | 266,889                       |   |  | $ | 275,999 |  
|                                                             |  |                    |         |  
|Operating expenses:                                          |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Cost of goods sold                                           |  |                    | 39,424  |   |                               |   | 33,419  |                      |  |   | 67,150                        |   |  |   | 64,647  |  
|Bowling center operating expenses                            |  |                    | 79,857  |   |                               |   | 74,469  |                      |  |   | 163,794                       |   |  |   | 149,294 |  
|Selling, general and administrative expenses                 |  |                    | 15,712  |   |                               |   | 12,000  |                      |  |   | 26,464                        |   |  |   | 22,958  |  
|Asset impairment                                             |  |                    |        |   |                               |   |        |                      |  |   | 1,303                         |   |  |   |        |  
|Depreciation and amortization                                |  |                    | 10,649  |   |                               |   | 12,247  |                      |  |   | 21,929                        |   |  |   | 25,081  |  
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Total operating expenses                                     |  |                    | 145,642 |   |                               |   | 132,135 |                      |  |   | 280,640                       |   |  |   | 261,980 |  
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Operating income (loss)                                      |  |                    | 3,648   |   |                               |   | 17,958  |                      |  |   | (13,751                       | ) |  |   | 14,019  |  
|                                                             |  |                    |         |  
|Non-operating (income) expenses:                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Interest expense                                             |  |                    | 6,679   |   |                               |   | 8,859   |                      |  |   | 13,181                        |   |  |   | 18,046  |  
|Interest income                                              |  |                    | (306    | ) |                               |   | (66     | )                    |  |   | (332                          | ) |  |   | (126    | )
|Other income, net                                            |  |                    | (87     | ) |                               |   | (3,102  | )                    |  |   | (4,739                        | ) |  |   | (3,309  | )
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Total non-operating expenses                                 |  |                    | 6,286   |   |                               |   | 5,691   |                      |  |   | 8,110                         |   |  |   | 14,611  |  
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Income (loss) from continuing operations before income taxes |  |                    | (2,638  | ) |                               |   | 12,267  |                      |  |   | (21,861                       | ) |  |   | (592    | )
|Provision for income taxes                                   |  |                    | 1,276   |   |                               |   | 1,731   |                      |  |   | 1,648                         |   |  |   | 1,672   |  
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Income (loss) from continuing operations                     |  |                    | (3,914  | ) |                               |   | 10,536  |                      |  |   | (23,509                       | ) |  |   | (2,264  | )
|                                                             |  |                    |         |  
|Discontinued operations (Note 3):                            |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Income (loss) from discontinued operations, net of tax       |  |                    | (346    | ) |                               |   | 1,958   |                      |  |   | 6,309                         |   |  |   | 2,086   |  
|Gain on disposal, net of tax                                 |  |                    | 30,247  |   |                               |   |        |                      |  |   | 30,247                        |   |  |   |        |  
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  
|Income from discontinued operations                          |  |                    | 29,901  |   |                               |   | 1,958   |                      |  |   | 36,556                        |   |  |   | 2,086   |  
|                                                             |  |                    |         |  
|Net income (loss)                                            |  | $                  | 25,987  |   |                               | $ | 12,494  |                      |  | $ | 13,047                        |   |  | $ | (178    | )
|                                                             |  |                    |         |   |                               |   |         |                      |  |   |                               |   |  |   |         |  



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



3



---

##### Table of Contents



AMF BOWLING WORLDWIDE, INC.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                            |  |                      |         |   |                               |   |         |  
|----------------------------------------------------------------------------------------------------------- |  | -------------------- | ------- | - | ----------------------------- | - | ------- | -
|                                                                                                            |  | NewCompany           |         |   | ReorganizedPredecessorCompany |  
|(In thousands)                                                                                              |  | 2005 FirstSix Months |         |   | 2004 FirstSix Months          |  
|Operating activities:                                                                                       |  |                      |         |   |                               |   |         |  
|Net income (loss)                                                                                           |  | $                    | 13,047  |   |                               | $ | (178    | )
|Income from discontinued operations, net of tax                                                             |  |                      | (36,556 | ) |                               |   | (2,086  | )
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Loss from continuing operations                                                                             |  |                      | (23,509 | ) |                               |   | (2,264  | )
|Adjustments to reconcile net loss from continuing operations to net cash provided by continuing operations: |  |                      |         |   |                               |   |         |  
|Stock based compensation                                                                                    |  |                      |        |   |                               |   | 210     |  
|Depreciation and amortization                                                                               |  |                      | 21,929  |   |                               |   | 25,081  |  
|(Gain) loss on the sale of property and equipment, net                                                      |  |                      | 257     |   |                               |   | (1,051  | )
|Gain from casualty loss                                                                                     |  |                      |        |   |                               |   | (1,413  | )
|Asset impairment                                                                                            |  |                      | 1,303   |   |                               |   |        |  
|Changes in assets and liabilities:                                                                          |  |                      |         |   |                               |   |         |  
|Accounts and notes receivable, net                                                                          |  |                      | 2,005   |   |                               |   | 329     |  
|Inventories                                                                                                 |  |                      | (2,318  | ) |                               |   | 1,226   |  
|Other assets                                                                                                |  |                      | 2,173   |   |                               |   | (4,772  | )
|Accounts payable and accrued expenses                                                                       |  |                      | (1,619  | ) |                               |   | (2,775  | )
|Income taxes payable                                                                                        |  |                      | (264    | ) |                               |   | 700     |  
|Other long-term liabilities                                                                                 |  |                      | 1,168   |   |                               |   | (29     | )
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Net cash provided by operating activities from continuing operations                                        |  |                      | 1,125   |   |                               |   | 15,242  |  
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Investing activities:                                                                                       |  |                      |         |   |                               |   |         |  
|Capital expenditures                                                                                        |  |                      | (21,513 | ) |                               |   | (21,353 | )
|Proceeds from:                                                                                              |  |                      |         |   |                               |   |         |  
|Sale of property and equipment                                                                              |  |                      | 1,548   |   |                               |   | 3,427   |  
|Sale of subsidiary                                                                                          |  |                      | 69,875  |   |                               |   |        |  
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Net cash provided by (used in) investing activities from continuing operations                              |  |                      | 49,910  |   |                               |   | (17,926 | )
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Financing activities:                                                                                       |  |                      |         |   |                               |   |         |  
|Payments of long-term debt                                                                                  |  |                      | (47,080 | ) |                               |   | (28,380 | )
|Payments under capital lease obligations                                                                    |  |                      | (211    | ) |                               |   | (146    | )
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Net cash used in financing activities from continuing operations                                            |  |                      | (47,291 | ) |                               |   | (28,526 | )
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Effect of exchange rates on cash                                                                            |  |                      | (2,123  | ) |                               |   | (1,754  | )
|Net cash provided by discontinued operations                                                                |  |                      | 16,929  |   |                               |   | 5,982   |  
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Net increase (decrease) in cash                                                                             |  |                      | 18,550  |   |                               |   | (26,982 | )
|Cash and cash equivalents at beginning of period                                                            |  |                      | 12,734  |   |                               |   | 56,275  |  
|                                                                                                            |  |                      |         |   |                               |   |         |  
|Cash and cash equivalents at end of period                                                                  |  | $                    | 31,284  |   |                               | $ | 29,293  |  
|                                                                                                            |  |                      |         |   |                               |   |         |  



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



4



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except as otherwise noted)

(unaudited)



NOTE 1. BUSINESS DESCRIPTION



Organization



AMF Bowling Worldwide, Inc., a Delaware corporation, and its subsidiaries (which may be referred to as Worldwide, the Company, we, us or our) operate in
two business segments:



| |  |  | the operation of bowling centers in the United States and internationally (Centers); and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | the manufacture and sale of bowling equipment, such as automatic pinspotters, automatic scoring equipment, bowling pins, lanes, ball returns, lane machines, bowling center supplies
and the resale of other related products, including bowling bags and shoes (collectively, Products).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 26, 2004, we operated 425 bowling centers worldwide including 368 bowling centers in the U.S. and 57 international bowling centers,
including 42 in Australia. On September 30, 2004, we sold our 33 bowling centers in the United Kingdom for gross cash proceeds of approximately $71,200. On February 8, 2005, we sold our 42 bowling centers in Australia for approximately $47,810
subject to certain post closing adjustments. We no longer have bowling center operations in the United Kingdom or Australia. The results of operations for the bowling centers in the United Kingdom and Australia have been reported as discontinued
operations for all periods presented.



Products is one of the
largest manufacturers of bowling center equipment in the world. Products revenue consists of two major sales categories:



| |  |  | New Center Packages (NCPs), which is all of the equipment necessary to outfit one lane at a new or existing bowling center; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Modernization and Consumer Products, which is equipment used to upgrade an existing center, spare parts, pins, supplies and consumable products used in the operation of a center,
and bowling balls and ancillary products for resale to bowlers.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Products also manufactures and sells its Playmaster, Highland and Renaissance brands of billiard tables.



Worldwide serves as the corporate headquarters of the Company. Its employees provide certain management and administrative services for Centers and
Products. Worldwides business operations and operating assets are held in subsidiaries. AMF Bowling Centers, Inc., a wholly-owned, indirect subsidiary of Worldwide, owns and operates our bowling centers in the U.S. Our bowling centers located
outside of the U.S. are operated through separate, indirect subsidiaries of Worldwide. Products is primarily operated through AMF Bowling Products, Inc., which is a wholly-owned, indirect subsidiary of Worldwide.



Merger



On November 26, 2003, Kingpin Holdings, LLC (Kingpin Holdings) and its wholly-owned subsidiary, Kingpin Merger
Sub, Inc. (Merger Sub), entered into an Agreement and Plan of Merger with Worldwide (the Merger Agreement). Pursuant to the Merger Agreement, on February 27, 2004, Merger Sub was merged into Worldwide with Worldwide being the
surviving corporation (the Merger). The Company, as it existed after the Merger, is sometimes referred to as the New Company. Each shareholder of Worldwide received $25.00 in cash for each share of the common stock of
Worldwide that was outstanding prior to the Merger including vested options and warrants, for aggregate proceeds (including option proceeds) of $258,700. The old common stock was canceled and the common stock of Merger Sub became the new common
stock of Worldwide. As part of the Merger, Kingpin Intermediate Corp., a wholly-owned subsidiary of Kingpin Holdings, became the sole shareholder of Worldwide.



5



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Kingpin Holdings is a Delaware
limited liability company formed at the direction of Code Hennessy & Simmons LLC, a Chicago-based private equity firm.



Fiscal Year



We report on a retail calendar year, with each quarter comprised of one 5-week period and two 4-week periods. Fiscal year 2004 had 52 weeks and fiscal
year 2005 has 53 weeks, with the extra week being reported in the fourth quarter.



NOTE 2. BASIS OF PRESENTATION



Our interim
condensed consolidated financial statements presented in this report are unaudited. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily
indicative of the results to be expected for the full year.



The preparation of the financial statements in conformity with accounting principles generally accepted in the United States for financial information requires management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual amounts could differ from these estimates. Certain previously reported amounts have been reclassified to conform to the current year presentation.



In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting of normal recurring accruals, which are necessary to present fairly the consolidated financial position and the consolidated results of operations and cash flows for all periods
presented.



These financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 27, 2004.



Prior to February 27, 2004, we were referred to as the Reorganized Predecessor Company and, as we existed on and after February 27, 2004,
we are referred to as the New Company. Our financial results during the three and six months ended December 26, 2004 and the three and six months ended December 28, 2003 are not comparable due to the Merger.



|                                                                                                  |  |                                                        
|------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------
|Period                                                                                            |  | Referred to as                                         
|Results for the New Company from September 27, 2004 through December 26, 2004                     |  | New Company 2005 Second Quarter                      
|                                                                                                  | 
|Results for the New Company from June 28, 2004 through December 26, 2004                          |  | New Company 2005 First Six Months                    
|                                                                                                  | 
|Results for the Reorganized Predecessor Company from September 29, 2003 through December 28, 2003 |  | Reorganized Predecessor Company 2004 Second Quarter  
|                                                                                                  | 
|Results for the Reorganized Predecessor Company from June 30, 2003 through December 28, 2003      |  | Reorganized Predecessor Company 2004 First Six Months



6



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



NOTE 3. DISCONTINUED OPERATIONS



In the New Company 2005 Second Quarter, we sold our bowling center
operations in the United Kingdom for gross proceeds of approximately $71,200. Additionally, in February 2005, we sold our bowling center operations in Australia for approximately $47,810. The gain on the Australian sale is not recorded in the New
Company 2005 Second Quarter. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144 Accounting for the Impairment or Disposal of Long-lived Assets, the bowling operations of the United Kingdom and
Australia are reported separately as discontinued operations for all periods presented.



The financial results of the United Kingdom and Australian bowling center operations, included in discontinued operations, were as follows:



|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       
|---------------------------------------- |  | ------------------ | ------ | - | ----------------------------- | - | ------ | -------------------- |  | ----------------------------- | ------ |  | - | ------
|                                         |  | NewCompany         |        |   | ReorganizedPredecessorCompany |   |        | NewCompany           |  | ReorganizedPredecessorCompany
|                                         |  | 2005 SecondQuarter |        |   | 2004 SecondQuarter            |   |        | 2005 FirstSix Months |  | 2004 FirstSix Months         
|Revenue                                  |  | $                  | 12,562 |   |                               | $ | 24,096 |                      |  | $                             | 37,796 |  | $ | 46,204
|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       
|Income from operations, pretax           |  |                    | 114    |   |                               |   | 1,470  |                      |  |                               | 9,467  |  |   | 2,130 
|Provision (benefit) for income taxes     |  |                    | 460    |   |                               |   | (488   | )                    |  |                               | 3,158  |  |   | 44    
|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       
|Income (loss) from operations, after tax |  |                    | (346   | ) |                               |   | 1,958  |                      |  |                               | 6,309  |  |   | 2,086 
|                                         |  |                    |        |  
|Gain on disposal, pretax                 |  |                    | 33,642 |   |                               |   |       |                      |  |                               | 33,642 |  |   |      
|Provision for income taxes               |  |                    | 3,395  |   |                               |   |       |                      |  |                               | 3,395  |  |   |      
|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       
|Gain on disposal, after tax              |  |                    | 30,247 |   |                               |   |       |                      |  |                               | 30,247 |  |   |      
|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       
|Income from discontinued operations      |  | $                  | 29,901 |   |                               | $ | 1,958  |                      |  | $                             | 36,556 |  | $ | 2,086 
|                                         |  |                    |        |   |                               |   |        |                      |  |                               |        |  |   |       



The assets and
liabilities of the Australian bowling center operations are classified as held-for-sale as of December 26, 2004 and were as follows:



|                                       |  |                  |       
|-------------------------------------- |  | ---------------- | ------
|                                       |  | December 26,2004
|Accounts receivable, net of allowance  |  | $                | 114   
|Inventories, net                       |  |                  | 1,411 
|Prepaid and other current assets       |  |                  | 1,519 
|Property and equipment, net            |  |                  | 45,461
|Other                                  |  |                  | 2,620 
|                                       |  |                  |       
|Assets held for sale                   |  | $                | 51,125
|                                       |  |                  |       
|Accounts payable                       |  | $                | 510   
|Accrued expenses and other liabilities |  |                  | 9,501 
|                                       |  |                  |       
|Liabilities held for sale              |  | $                | 10,011
|                                       |  |                  |       



7



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



NOTE 4. EQUITY BASED COMPENSATION



Effective September 27, 2004, Kingpin Holdings adopted
the 2004 Unit Option Plan (the Option Plan) and granted 100,000 options to purchase common units of Kingpin Holdings, at an exercise price of $10.0 per common unit, to twenty two (22) senior managers of Worldwide. One-third of the
options vest on June 28 of each year beginning June 28, 2005. The options are subject to customary terms and conditions. The number of common units with respect to which options may be granted under the Option Plan and which may be issued upon their
exercise may not exceed 1,094,595 common units in the aggregate. Under the Option Plan, grants may be made to any director, executive or other key employee of, or any consultant or advisors to, Kingpin Holdings or Worldwide. We currently use the
intrinsic value method of accounting for stock based employee compensation in accordance with Accounting Principles Board (APB) Opinion No. 25 Accounting for Stock Issued to Employees. Under APB Opinion No. 25, compensation
expense is based upon the difference, if any, between the fair value of the unit option and the exercise price on the date of the grant. No compensation expense for the unit options is reflected in the New Company 2005 Second Quarter or the New
Company 2005 First Six Months net earnings, as all options granted under this plan had an exercise price not less than the market value of the common unit on the date of the grant.



NOTE 5. COMPREHENSIVE INCOME



Comprehensive income was $27,244 for the New Company 2005 Second Quarter, $12,484 for the New Company 2005 First Six Months, $17,116 for the Reorganized
Predecessor Company 2004 Second Quarter and $4,997 for the Reorganized Predecessor Company 2004 First Six Months. Accumulated other comprehensive loss of $3,850 at December 26, 2004 and $3,287 at June 27, 2004 is included in stockholders
equity and consists of the foreign currency translation adjustment.



NOTE 6.
INVENTORIES, NET



Inventories, net, at December 26, 2004
and June 27, 2004 consisted of:



|                               |  |                  |        |               |   |       
|------------------------------ |  | ---------------- | ------ | ------------- | - | ------
|                               |  | December 26,2004 |        | June 27, 2004
|Products, at FIFO:             |  |                  |        |               |   |       
|Raw materials                  |  | $                | 6,459  |               | $ | 6,157 
|Work in process (a)            |  |                  | 3,585  |               |   | 2,281 
|Finished goods and spare parts |  |                  | 15,592 |               |   | 14,362
|Centers, at average cost:      |  |                  |        |               |   |       
|Merchandise and spare parts    |  |                  | 6,218  |               |   | 7,945 
|                               |  |                  |        |               |   |       
|Total inventories, net         |  | $                | 31,854 |               | $ | 30,745
|                               |  |                  |        |               |   |       

---

|(a) | Work in process also includes certain inventory shipments in-transit to customers.
|--- | ----------------------------------------------------------------------------------



8



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



NOTE 7. PROPERTY AND EQUIPMENT, NET



Property and equipment, net, at December 26, 2004 and
June 27, 2004 consisted of:



|                                  |  |                  |         |   |              |   |         |  
|--------------------------------- |  | ---------------- | ------- | - | ------------ | - | ------- | -
|                                  |  | December 26,2004 |         |   | June 27,2004 |  
|Land                              |  | $                | 29,771  |   |              | $ | 44,248  |  
|Buildings and improvements        |  |                  | 109,652 |   |              |   | 143,124 |  
|Equipment, furniture and fixtures |  |                  | 153,481 |   |              |   | 186,488 |  
|Other                             |  |                  | 11,490  |   |              |   | 10,664  |  
|                                  |  |                  |         |   |              |   |         |  
|                                  |  |                  | 304,394 |   |              |   | 384,524 |  
|Less accumulated depreciation     |  |                  | (35,857 | ) |              |   | (20,568 | )
|                                  |  |                  |         |   |              |   |         |  
|Property and equipment, net       |  | $                | 268,537 |   |              | $ | 363,956 |  
|                                  |  |                  |         |   |              |   |         |  



Depreciation expense
related to property and equipment was $10,683 in the New Company 2005 First Quarter, $21,597 in the New Company 2005 First Six Months, $12,201 in the Reorganized Predecessor Company 2004 Second Quarter and $31,303 in the Reorganized Predecessor
Company 2004 First Six Months.



NOTE 8. SUPPLEMENTAL CASH FLOW INFORMATION



The table below presents supplemental cash flow
information for the reporting periods:



|                                 |  |                      |        |                               |   |       
|-------------------------------- |  | -------------------- | ------ | ----------------------------- | - | ------
|                                 |  | NewCompany           |        | ReorganizedPredecessorCompany
|                                 |  | 2005 FirstSix Months |        | 2004 FirstSix Months         
|Cash paid during the period for: |  |                      |        |                               |   |       
|Interest                         |  | $                    | 11,182 |                               | $ | 18,776
|Income taxes                     |  |                      | 1,956  |                               |   | 1,577 
|                                 |  |                      |        |                               |   |       



NOTE 9. LONG-TERM DEBT



As discussed in Note 1, we completed the Merger on
February 27, 2004 and substantially all of the debt the Reorganized Predecessor Company had in place prior to the Merger was paid in full.



Long-Term Debt Summary



Our long-term debt at December 26, 2004 and June 27, 2004 consisted of:



|                                      |  |                  |         |   |              |   |         |  
|------------------------------------- |  | ---------------- | ------- | - | ------------ | - | ------- | -
|                                      |  | December 26,2004 |         |   | June 27,2004 |  
|Term Loan                             |  | $                | 87,921  |   |              | $ | 135,000 |  
|Revolver                              |  |                  |        |   |              |   |        |  
|Subordinated Notes, 10%, due 2010     |  |                  | 150,000 |   |              |   | 150,000 |  
|Old Subordinated Notes, 13%, due 2008 |  |                  | 5       |   |              |   | 5       |  
|Mortgage note and capitalized leases  |  |                  | 3,600   |   |              |   | 3,792   |  
|                                      |  |                  |         |   |              |   |         |  
|Total debt                            |  |                  | 241,526 |   |              |   | 288,797 |  
|Current maturities                    |  |                  | (1,559  | ) |              |   | (2,294  | )
|                                      |  |                  |         |   |              |   |         |  
|Total long-term debt                  |  | $                | 239,967 |   |              | $ | 286,503 |  
|                                      |  |                  |         |   |              |   |         |  



9



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Credit Agreement



At December 26, 2004, we owed $87,921 in term loans (the Term
Loan) under a senior secured credit agreement (the Credit Agreement) which also has an aggregate revolving loan commitment of $40,000 (the Revolver). In September 2004, we entered into a First Amendment to Credit
Agreement (the Amendment). The Amendment, among other things, requires us to prepay loans and/or cash collateralize or pay certain letter of credit obligations under the Credit Agreement in an amount equal to 20% of the net cash proceeds
from any sale, transfer or other disposition of the assets or stock of certain of our foreign subsidiaries. The Amendment also permits us to redeem, purchase, prepay, retire, defease or otherwise acquire our 10% Senior Subordinated Notes due 2010
for cash consideration in an amount that does not exceed 80% of net cash proceeds from those sales of assets or stock of certain of our foreign subsidiaries within a specified period of time.



At December 26, 2004, there were no borrowings outstanding under the
Revolver. Outstanding standby letters of credit issued under the Revolver totaled $18,114 leaving $21,886 available for additional borrowings or letters of credit. Our aggregate letter of credit obligations outstanding under the Credit Agreement may
not exceed $25,000. The principal amount of the Term Loan must be repaid on a quarterly basis in the amounts and at the times specified in the Credit Agreement, with a final principal payment of $83,723 due on August 27, 2009. Scheduled quarterly
principal payments of $221 are due on the last day of each calendar quarter. Repayment also is required in amounts specified in the Credit Agreement for certain events including certain asset sale proceeds and equity and debt offering proceeds. The
Credit Agreement requires the frequency of interest payments to be not less than quarterly and an annual mandatory prepayment of the Term Loan based on a percentage of free cash flow, ranging from 25-75%, as specified in the Credit Agreement. The
obligations under the Credit Agreement are secured by substantially all of our U.S. assets and a 65% pledge of the capital stock of certain first tier foreign subsidiaries. Certain of our U.S. subsidiaries have guaranteed, or are directly obligated
on, the Credit Agreement. The Credit Agreement contains certain events of default including cross default provisions.



Subordinated Notes



We have $150,000 of 10% Senior Subordinated Notes due 2010 (the Subordinated Notes) with interest payable semi-annually. The Subordinated
Notes were issued pursuant to an indenture dated February 27, 2004 (the Indenture). The Subordinated Notes are expressly subordinated to the payment of the Credit Agreement and any other senior indebtedness; contain affirmative and
negative covenants that are customary to high yield instruments and generally no more restrictive than those contained in the Credit Agreement; contain certain events of default including cross default provisions; are unsecured; and have the benefit
of guarantees of certain of the U.S. subsidiaries. Subject to certain exceptions, the Subordinated Notes may not be redeemed at our option before March 1, 2007. Thereafter, the Subordinated Notes are redeemable in the manner provided in the
Indenture at redemption prices equal to 105.00% during the 12 month period beginning March 1, 2007, 102.50% during the 12 month period beginning March 1, 2008 and 100.00% beginning on March 1, 2009 and thereafter. Upon the occurrence of a change of
control (as defined in the Indenture), we are required to offer to purchase the Subordinated Notes at 101.00% of their principal amount, plus accrued interest. Subject to certain restrictions and conditions, the Indenture permits the payment of a
dividend or distribution to Kingpin Intermediate Corp. or the repurchase or redemption of shares of Worldwide or any parent of Worldwide of up to 35% of the Net Cash Proceeds (as defined in the Indenture) from the sale of International Operations
(as defined in the Indenture).



NOTE 10. LIABILITIES SUBJECT TO RESOLUTION



In 2001, Worldwide and certain of its U.S. subsidiaries
(collectively, the Debtors) filed voluntary petitions for relief under Chapter 11 with the United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division (the Bankruptcy Court). On February 1, 2002,
the Bankruptcy Court confirmed the Second Amended Second Modified Joint Plan of Reorganization (the Plan) of the Debtors. The Plan became effective on March 8, 2002, which is the date on which the Debtors emerged from Chapter 11.
Liabilities subject to resolution in the



10



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Chapter 11 proceeding were $213 at December 26, 2004 and $233 at June 27, 2004. These
balances consist primarily of real and personal property taxes expected to be paid upon settlement of the claim or over a six year period.



NOTE 11. COMMITMENTS AND CONTINGENCIES



Equipment Warranties



The following table provides a roll-forward from June 27, 2004 of our estimated exposure related to equipment warranties for the period ended December 26,
2004:



|                           |  |   |       |  
|-------------------------- |  | - | ----- | -
|Balance, June 27, 2004     |  | $ | 1,136 |  
|Provision                  |  |   | 125   |  
|Payments                   |  |   | (104  | )
|Exchange rate effect       |  |   | 3     |  
|                           |  |   |       |  
|Balance, December 26, 2004 |  | $ | 1,160 |  
|                           |  |   |       |  



The warranty reserve
is evaluated on a regular basis to determine its adequacy. The reserve is based upon prior experience and managements estimates.



Asset Sales



From time to time, we will sell real estate on which a bowling center is operated, either in connection with the closing of a bowling center or in
response to an attractive offer to buy such real estate. In addition, we will, from time to time, sell excess real estate.



The following table shows our asset sales for the reported periods:



|                |  |                     |   |                       |   |          |  |                  |       |  |   |    
|--------------- |  | ------------------- | - | --------------------- | - | -------- |  | ---------------- | ----- |  | - | ---
|                |  | 2005 Second Quarter |   | 2005 First Six Months
|                |  | Proceeds            |   | Gain/(loss), net      |   | Proceeds |  | Gain/(loss), net
|U.S. Centers:   |  |                     |   |                       |   |          |  |                  |       |  |   |    
|Excess property |  | $                   | 3 |                       | $ | 3        |  | $                | 1,518 |  | $ | 531
|                |  |                     |   |                       |   |          |  |                  |       |  |   |    



Centers net gains are
included in bowling center operating expenses and Products net gains are included in selling, general and administrative expense on the Condensed Consolidated Statements of Operations.



Litigation and Claims



We currently and from time to time are subject to claims and actions arising in the ordinary course of our business, including general liability,
workers compensation, employee compensation and environmental claims. 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 we are
involved are not expected to have a material adverse impact on our financial position or results of operations. In addition, we are a defendant in two actions alleging violations of federal legislation involving unsolicited communications. These
actions were brought by plaintiffs who allegedly received unsolicited communications from us or from an agent on our behalf. The plaintiffs in these actions sought statutory damages and have requested geographically-limited class certifications. In
one of these actions, which was brought in Georgia state court, the court has approved a settlement of the class action. It is not possible at this time to predict the outcome of the remaining action. From time to time, we resolve claims alleging
similar violations in order to avoid litigation.



11



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



European Community Tariff



The Commission of the European Community increased tariffs last year on
certain U.S. exports to the countries comprising the European Community (the EC) in response to benefits for U.S. exporters under the U.S. Foreign Sales Corporation/Extraterritorial Income Exclusion tax regimes, which were declared in
violation of U.S. obligations by the World Trade Organization (the WTO). A substantial portion of our bowling products imported into the EC was subject to the additional duty. The additional duty was 5% ad valorem in March 2004 and
increased 1% each month thereafter up to a maximum of 14%. The U.S. Congress recently enacted legislation which was intended to address the issues raised by the EC. The EC has agreed to repeal temporarily the additional duty retroactive to January
1, 2005 until the WTO determines that the U.S. legislation adequately responded to global trade rules. There can be no assurance that the WTO will make a favorable determination.



NOTE 12. BUSINESS SEGMENTS



We operate in two business segments: operation of bowling centers and manufacture and sale of bowling and related products. Information concerning these
segments from continuing operations is presented below:



|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|------------- |  | --------------------------------------------------- | ----- | ----------------- | - | ---- | --------------------- |  | - | ----------- | - |  | --------------------------- | ----- | - | ------------------- | - | ---- | - |  | - | ----
|              |  | New Company 2005 Second Quarter                    
|(In millions) |  | Revenue fromunaffiliatedcustomers                   |       | Intersegmentsales |   |      | Operatingincome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |       |   | Capitalexpenditures
|Centers:      |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  | $                                                   | 112.5 |                   | $ |     |                       |  | $ | 13.0        |   |  | $                           | 252.1 |   |                     | $ | 8.1  |   |  | $ | 8.5 
|International |  |                                                     | 4.7   |                   |   |     |                       |  |   | 0.3         |   |  |                             | 67.7  |   |                     |   | 0.3  |   |  |   | 0.1 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                     | 117.2 |                   |   |     |                       |  |   | 13.3        |   |  |                             | 319.8 |   |                     |   | 8.4  |   |  |   | 8.6 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Products:     |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  |                                                     | 15.2  |                   |   | 5.3  |                       |  |   | 0.3         |   |  |                             | 78.2  |   |                     |   | 1.7  |   |  |   | 0.7 
|International |  |                                                     | 16.9  |                   |   | 1.1  |                       |  |   |            |   |  |                             | 27.1  |   |                     |   | 0.1  |   |  |   | 0.1 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                     | 32.1  |                   |   | 6.4  |                       |  |   | 0.3         |   |  |                             | 105.3 |   |                     |   | 1.8  |   |  |   | 0.8 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Corporate     |  |                                                     |      |                   |   |     |                       |  |   | (10.0       | ) |  |                             | 32.2  |   |                     |   | 0.5  |   |  |   | 0.4 
|Eliminations  |  |                                                     |      |                   |   | (6.4 | )                     |  |   |            |   |  |                             | 7.5   |   |                     |   | (0.1 | ) |  |   |    
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Total         |  | $                                                   | 149.3 |                   | $ |     |                       |  | $ | 3.6         |   |  | $                           | 464.8 |   |                     | $ | 10.6 |   |  | $ | 9.8 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|              | 
|              |  | Reorganized Predecessor Company 2004 Second Quarter
|(In millions) |  | Revenue fromunaffiliatedcustomers                   |       | Intersegmentsales |   |      | Operatingincome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |       |   | Capitalexpenditures
|Centers:      |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  | $                                                   | 116.7 |                   | $ |     |                       |  | $ | 24.9        |   |  | $                           | 483.1 |   |                     | $ | 10.5 |   |  | $ | 11.3
|International |  |                                                     | 5.8   |                   |   |     |                       |  |   | 0.4         |   |  |                             | 106.9 |   |                     |   | 0.2  |   |  |   | 0.5 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                     | 122.5 |                   |   |     |                       |  |   | 25.3        |   |  |                             | 590.0 |   |                     |   | 10.7 |   |  |   | 11.8
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Products:     |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  |                                                     | 12.2  |                   |   | 4.8  |                       |  |   | 0.4         |   |  |                             | 80.1  |   |                     |   | 1.2  |   |  |   | 0.2 
|International |  |                                                     | 15.4  |                   |   | 1.2  |                       |  |   | (0.9        | ) |  |                             | 31.4  |   |                     |   | 0.1  |   |  |   | 0.1 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                     | 27.6  |                   |   | 6.0  |                       |  |   | (0.5        | ) |  |                             | 111.5 |   |                     |   | 1.3  |   |  |   | 0.3 
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Corporate     |  |                                                     |      |                   |   |     |                       |  |   | (6.9        | ) |  |                             | (7.0  | ) |                     |   | 0.2  |   |  |   | 0.6 
|Eliminations  |  |                                                     |      |                   |   | (6.0 | )                     |  |   | 0.1         |   |  |                             | 7.2   |   |                     |   |     |   |  |   |    
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Total         |  | $                                                   | 150.1 |                   | $ |     |                       |  | $ | 18.0        |   |  | $                           | 701.7 |   |                     | $ | 12.2 |   |  | $ | 12.7
|              |  |                                                     |       |                   |   |      |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     





12



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|------------- |  | ----------------------------------------------------- | ----- | ----------------- | - | ----- | --------------------- |  | - | ----------- | - |  | --------------------------- | ----- | - | ------------------- | - | ---- | - |  | - | ----
|              |  | New Company 2005 First Six Months                    
|(In millions) |  | Revenue fromunaffiliatedcustomers                     |       | Intersegmentsales |   |       | Operatingincome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |       |   | Capitalexpenditures
|Centers:      |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  | $                                                     | 198.0 |                   | $ |      |                       |  | $ | 2.5         |   |  | $                           | 252.1 |   |                     | $ | 16.9 |   |  | $ | 18.6
|International |  |                                                       | 9.6   |                   |   |      |                       |  |   | (1.8        | ) |  |                             | 67.7  |   |                     |   | 0.6  |   |  |   | 0.2 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                       | 207.6 |                   |   |      |                       |  |   | 0.7         |   |  |                             | 319.8 |   |                     |   | 17.5 |   |  |   | 18.8
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Products:     |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  |                                                       | 32.5  |                   |   | 12.2  |                       |  |   | (0.9        | ) |  |                             | 78.2  |   |                     |   | 3.4  |   |  |   | 1.4 
|International |  |                                                       | 26.8  |                   |   | 2.1   |                       |  |   | 2.1         |   |  |                             | 27.1  |   |                     |   | 0.2  |   |  |   | 0.1 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                       | 59.3  |                   |   | 14.3  |                       |  |   | 1.2         |   |  |                             | 105.3 |   |                     |   | 3.6  |   |  |   | 1.5 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Corporate     |  |                                                       |      |                   |   |      |                       |  |   | (15.7       | ) |  |                             | 32.2  |   |                     |   | 0.9  |   |  |   | 1.2 
|Eliminations  |  |                                                       |      |                   |   | (14.3 | )                     |  |   |            |   |  |                             | 7.5   |   |                     |   | (0.1 | ) |  |   |    
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Total         |  | $                                                     | 266.9 |                   | $ |      |                       |  | $ | (13.8       | ) |  | $                           | 464.8 |   |                     | $ | 21.9 |   |  | $ | 21.5
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|              | 
|              |  | Reorganized Predecessor Company 2004 First Six Months
|(In millions) |  | Revenue fromunaffiliatedcustomers                     |       | Intersegmentsales |   |       | Operatingincome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |       |   | Capitalexpenditures
|Centers:      |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  | $                                                     | 206.2 |                   | $ |      |                       |  | $ | 24.5        |   |  | $                           | 483.1 |   |                     | $ | 21.0 |   |  | $ | 19.0
|International |  |                                                       | 11.1  |                   |   |      |                       |  |   | 0.9         |   |  |                             | 106.9 |   |                     |   | 0.7  |   |  |   | 0.7 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                       | 217.3 |                   |   |      |                       |  |   | 25.4        |   |  |                             | 590.0 |   |                     |   | 21.7 |   |  |   | 19.7
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Products:     |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|U.S.          |  |                                                       | 30.2  |                   |   | 9.0   |                       |  |   | 2.1         |   |  |                             | 80.1  |   |                     |   | 2.6  |   |  |   | 0.5 
|International |  |                                                       | 28.5  |                   |   | 2.3   |                       |  |   | (1.4        | ) |  |                             | 31.4  |   |                     |   | 0.2  |   |  |   | 0.1 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Subtotal      |  |                                                       | 58.7  |                   |   | 11.3  |                       |  |   | 0.7         |   |  |                             | 111.5 |   |                     |   | 2.8  |   |  |   | 0.6 
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Corporate     |  |                                                       |      |                   |   |      |                       |  |   | (12.3       | ) |  |                             | (7.0  | ) |                     |   | 0.9  |   |  |   | 1.1 
|Eliminations  |  |                                                       |      |                   |   | (11.3 | )                     |  |   | 0.2         |   |  |                             | 7.2   |   |                     |   | (0.3 | ) |  |   |    
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     
|Total         |  | $                                                     | 276.0 |                   | $ |      |                       |  | $ | 14.0        |   |  | $                           | 701.7 |   |                     | $ | 25.1 |   |  | $ | 21.4
|              |  |                                                       |       |                   |   |       |                       |  |   |             |   |  |                             |       |   |                     |   |      |   |  |   |     



13



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



NOTE 13. CONDENSED CONSOLIDATING FINANCIAL
STATEMENTS



The Subordinated Notes are jointly and
severally guaranteed on a full and unconditional basis by our direct and indirect, wholly-owned domestic subsidiaries (the Guarantor Subsidiaries). Our foreign and non wholly-owned subsidiaries (the Non-Guarantor
Subsidiaries) do not provide guarantees. Based on this distinction, the following information presents the condensed consolidating balance sheets as of December 26, 2004 and June 27, 2004, condensed consolidating statements of operations for
the New Company 2005 Second Quarter, Reorganized Predecessor Company 2004 Second Quarter, New Company 2005 First Six Months and Reorganized Predecessor Company 2004 First Six Months and the condensed consolidating statements of cash flows for the
New Company 2005 First Six Months and the Reorganized Predecessor Company 2004 First Six Months. The elimination entries presented are necessary to combine the entities.



14



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Balance Sheet



|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|--------------------------------------------- |  | ----------------- | ------- | - | --------------------- | - | -------- | ------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                              |  | December 26, 2004 |        
|                                              |  | Worldwide         |         |   | GuarantorSubsidiaries |   |          | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                        |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                               |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                     |  | $                 | 24,298  |   |                       | $ | 4,967    |                           |  | $ | 2,019        |   |  | $     |         |   |  | $ | 31,284  |  
|Accounts and notes receivable, net            |  |                   |        |   |                       |   | 20,414   |                           |  |   | 4,051        |   |  |       |         |   |  |   | 24,465  |  
|Accounts and notes receivable - intercompany  |  |                   | 26,548  |   |                       |   | 165,616  |                           |  |   | 8,879        |   |  |       | (201,043 | ) |  |   |        |  
|Inventories, net                              |  |                   |        |   |                       |   | 29,657   |                           |  |   | 5,710        |   |  |       | (3,513   | ) |  |   | 31,854  |  
|Prepaid expenses and other current assets     |  |                   | (6,346  | ) |                       |   | 17,922   |                           |  |   | 1,876        |   |  |       |         |   |  |   | 13,452  |  
|Assets held for sale                          |  |                   |        |   |                       |   | 51,125   |                           |  |   |             |   |  |       |         |   |  |   | 51,125  |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                          |  |                   | 44,500  |   |                       |   | 289,701  |                           |  |   | 22,535       |   |  |       | (204,556 | ) |  |   | 152,180 |  
|                                              |  |                   |         |   |                      
|Notes receivable  intercompany               |  |                   | 1,896   |   |                       |   |         |                           |  |   | 3,000        |   |  |       | (4,896   | ) |  |   |        |  
|Property and equipment, net                   |  |                   | 7,595   |   |                       |   | 253,571  |                           |  |   | 4,891        |   |  |       | 2,480    |   |  |   | 268,537 |  
|Investment in subsidiaries                    |  |                   | 446,334 |   |                       |   |         |                           |  |   | 5            |   |  |       | (446,339 | ) |  |   |        |  
|Other assets                                  |  |                   | 28,250  |   |                       |   | 93,416   |                           |  |   | (657         | ) |  |       | (76,877  | ) |  |   | 44,132  |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total assets                                  |  | $                 | 528,575 |   |                       | $ | 636,688  |                           |  | $ | 29,774       |   |  | $     | (730,188 | ) |  | $ | 464,849 |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Stockholders Equity          |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                          |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Accounts payable                              |  | $                 | 120     |   |                       | $ | 12,381   |                           |  | $ | 1,019        |   |  | $     |         |   |  | $ | 13,520  |  
|Accrued expenses and other liabilities        |  |                   | 17,092  |   |                       |   | 53,512   |                           |  |   | 5,054        |   |  |       |         |   |  |   | 75,658  |  
|Current portion of long-term debt             |  |                   | 884     |   |                       |   | 586      |                           |  |   | 89           |   |  |       |          |   |  |   | 1,559   |  
|Accounts and notes payable - intercompany     |  |                   | 126,568 |   |                       |   | 43,402   |                           |  |   | 31,073       |   |  |       | (201,043 | ) |  |   |        |  
|Liabilities held for sale                     |  |                   |        |   |                       |   | 10,011   |                           |  |   |             |   |  |       |         |   |  |   | 10,011  |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                     |  |                   | 144,664 |   |                       |   | 119,892  |                           |  |   | 37,235       |   |  |       | (201,043 | ) |  |   | 100,748 |  
|                                              |  |                   |         |   |                      
|Long-term debt, less current portion          |  |                   | 237,041 |   |                       |   | 2,584    |                           |  |   | 342          |   |  |       |         |   |  |   | 239,967 |  
|Liabilities, subject to resolution            |  |                   |        |   |                       |   | 213      |                           |  |   |             |   |  |       |         |   |  |   | 213     |  
|Other long-term liabilities                   |  |                   | 21,569  |   |                       |   | 55,141   |                           |  |   | 167          |   |  |       | (76,877  | ) |  |   |        |  
|Notes payable-intercompany                    |  |                   | 347     |   |                       |   | 4,549    |                           |  |   |             |   |  |       | (4,896   | ) |  |   |        |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities                             |  |                   | 403,621 |   |                       |   | 182,379  |                           |  |   | 37,744       |   |  |       | (282,816 | ) |  |   | 340,928 |  
|                                              |  |                   |         |   |                      
|Stockholders equity:                         |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock                                  |  |                   |        |   |                       |   |         |                           |  |   |             |   |  |       |         |   |  |   |        |  
|Paid-in capital                               |  |                   | 133,716 |   |                       |   | 677,220  |                           |  |   | 9,432        |   |  |       | (686,652 | ) |  |   | 133,716 |  
|Accumulated deficit                           |  |                   | (4,912  | ) |                       |   | (228,467 | )                         |  |   | (6,377       | ) |  |       | 233,811  |   |  |   | (5,945  | )
|Accumulated other comprehensive income (loss) |  |                   | (3,850  | ) |                       |   | 5,556    |                           |  |   | (11,025      | ) |  |       | 5,469    |   |  |   | (3,850  | )
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total stockholders equity                    |  |                   | 124,954 |   |                       |   | 454,309  |                           |  |   | (7,970       | ) |  |       | (447,372 | ) |  |   | 123,921 |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities and stockholders equity    |  | $                 | 528,575 |   |                       | $ | 636,688  |                           |  | $ | 29,774       |   |  | $     | (730,188 | ) |  | $ | 464,849 |  
|                                              |  |                   |         |   |                       |   |          |                           |  |   |              |   |  |       |          |   |  |   |         |  



15



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Balance Sheet



|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|--------------------------------------------- |  | ------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                              |  | June 27, 2004 |        
|                                              |  | Worldwide     |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                        |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                               |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                     |  | $             | 3,379   |   |                       | $ | 6,484   |                           |  | $ | 2,871        |   |  | $     |         |   |  | $ | 12,734  |  
|Accounts and notes receivable, net            |  |               |        |   |                       |   | 21,333  |                           |  |   | 4,404        |   |  |       |         |   |  |   | 25,737  |  
|Accounts and notes receivable - intercompany  |  |               | 16,288  |   |                       |   | 150,135 |                           |  |   | 20,146       |   |  |       | (186,569 | ) |  |   |        |  
|Inventories, net                              |  |               |        |   |                       |   | 27,430  |                           |  |   | 6,039        |   |  |       | (2,724   | ) |  |   | 30,745  |  
|Prepaid expenses and other current assets     |  |               | (7,137  | ) |                       |   | 19,444  |                           |  |   | 6,924        |   |  |       |         |   |  |   | 19,231  |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                          |  |               | 12,530  |   |                       |   | 224,826 |                           |  |   | 40,384       |   |  |       | (189,293 | ) |  |   | 88,447  |  
|                                              |  |               |         |   |                      
|Notes receivable  intercompany               |  |               | 47,330  |   |                       |   |        |                           |  |   | 5,663        |   |  |       | (52,993  | ) |  |   |        |  
|Property and equipment, net                   |  |               | 7,256   |   |                       |   | 315,007 |                           |  |   | 41,627       |   |  |       | 66       |   |  |   | 363,956 |  
|Investment in subsidiaries                    |  |               | 477,829 |   |                       |   |        |                           |  |   | 5            |   |  |       | (477,834 | ) |  |   |        |  
|Other assets                                  |  |               | 30,003  |   |                       |   | 98,258  |                           |  |   | (392         | ) |  |       | (78,165  | ) |  |   | 49,704  |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total assets                                  |  | $             | 574,948 |   |                       | $ | 638,091 |                           |  | $ | 87,287       |   |  | $     | (798,219 | ) |  | $ | 502,107 |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Stockholders Equity          |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                          |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Accounts payable                              |  | $             | 496     |   |                       | $ | 14,719  |                           |  | $ | 6,446        |   |  | $     |         |   |  | $ | 21,661  |  
|Accrued expenses and other liabilities        |  |               | 13,533  |   |                       |   | 60,189  |                           |  |   | 6,257        |   |  |       |         |   |  |   | 79,979  |  
|Current portion of long-term debt             |  |               | 1,688   |   |                       |   | 530     |                           |  |   | 76           |   |  |       |         |   |  |   | 2,294   |  
|Accounts and notes payable - intercompany     |  |               | 130,212 |   |                       |   | 13,576  |                           |  |   | 42,781       |   |  |       | (186,569 | ) |  |   |        |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                     |  |               | 145,929 |   |                       |   | 89,014  |                           |  |   | 55,560       |   |  |       | (186,569 | ) |  |   | 103,934 |  
|                                              |  |               |         |   |                      
|Long-term debt, less current portion          |  |               | 283,317 |   |                       |   | 2,837   |                           |  |   | 349          |   |  |       |         |   |  |   | 286,503 |  
|Liabilities, subject to resolution            |  |               |        |   |                       |   | 233     |                           |  |   |             |   |  |       |         |   |  |   | 233     |  
|Other long-term liabilities                   |  |               | 21,569  |   |                       |   | 56,422  |                           |  |   | 174          |   |  |       | (78,165  | ) |  |   |        |  
|Notes payable-intercompany                    |  |               | 10,038  |   |                       |   |        |                           |  |   | 42,955       |   |  |       | (52,993  | ) |  |   |        |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities                             |  |               | 460,853 |   |                       |   | 148,506 |                           |  |   | 99,038       |   |  |       | (317,727 | ) |  |   | 390,670 |  
|                                              |  |               |         |   |                      
|Stockholders equity:                         |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock                                  |  |               |        |   |                       |   |        |                           |  |   |             |   |  |       |         |   |  |   |        |  
|Paid-in capital                               |  |               | 133,716 |   |                       |   | 504,566 |                           |  |   | (10,975      | ) |  |       | (493,591 | ) |  |   | 133,716 |  
|Accumulated (deficit) earnings                |  |               | (16,334 | ) |                       |   | (9,965  | )                         |  |   | (886         | ) |  |       | 8,193    |   |  |   | (18,992 | )
|Accumulated other comprehensive income (loss) |  |               | (3,287  | ) |                       |   | (5,016  | )                         |  |   | 110          |   |  |       | 4,906    |   |  |   | (3,287  | )
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total stockholders equity                    |  |               | 114,095 |   |                       |   | 489,585 |                           |  |   | (11,751      | ) |  |       | (480,492 | ) |  |   | 111,437 |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities and stockholders equity    |  | $             | 574,948 |   |                       | $ | 638,091 |                           |  | $ | 87,287       |   |  | $     | (798,219 | ) |  | $ | 502,107 |  
|                                              |  |               |         |   |                       |   |         |                           |  |   |              |   |  |       |          |   |  |   |         |  





16



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                         |  | New Company 2005 Second Quarter |        
|                                                                                                         |  | Worldwide                       |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                                        |  | $                               |        |   |                       | $ | 140,792 |                           |  | $ | 11,716       |   |  | $     | (3,218 | ) |  | $ | 149,290 |  
|                                                                                                         |  |                                 |         |   |                      
|Operating expenses:                                                                                      |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                                 |        |   |                       |   | 36,364  |                           |  |   | 6,527        |   |  |       | (3,467 | ) |  |   | 39,424  |  
|Bowling center operating expenses                                                                        |  |                                 |        |   |                       |   | 75,796  |                           |  |   | 4,141        |   |  |       | (80    | ) |  |   | 79,857  |  
|Selling, general and administrative expenses                                                             |  |                                 | 9,532   |   |                       |   | 4,803   |                           |  |   | 1,377        |   |  |       |       |   |  |   | 15,712  |  
|Depreciation and amortization                                                                            |  |                                 | 499     |   |                       |   | 9,897   |                           |  |   | 258          |   |  |       | (5     | ) |  |   | 10,649  |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                                 |  |                                 | 10,031  |   |                       |   | 126,860 |                           |  |   | 12,303       |   |  |       | (3,552 | ) |  |   | 145,642 |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                                 | (10,031 | ) |                       |   | 13,932  |                           |  |   | (587         | ) |  |       | 334    |   |  |   | 3,648   |  
|                                                                                                         |  |                                 |         |   |                      
|Non-operating (income) expenses:                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                         |  |                                 | 6,641   |   |                       |   | 38      |                           |  |   |             |   |  |       |       |   |  |   | 6,679   |  
|Interest income                                                                                          |  |                                 | (265    | ) |                       |   | (26     | )                         |  |   | (15          | ) |  |       |       |   |  |   | (306    | )
|Other (income) expense                                                                                   |  |                                 | (6,241  | ) |                       |   | 6,771   |                           |  |   | (617         | ) |  |       |       |   |  |   | (87     | )
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                                 | 135     |   |                       |   | 6,783   |                           |  |   | (632         | ) |  |       |       |   |  |   | 6,286   |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                                 | (10,166 | ) |                       |   | 7,149   |                           |  |   | 45           |   |  |       | 334    |   |  |   | (2,638  | )
|                                                                                                         |  |                                 |         |   |                      
|Provision (benefit) for income taxes                                                                     |  |                                 | 219     |   |                       |   | 669     |                           |  |   | 388          |   |  |       |       |   |  |   | 1,276   |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                                 | (10,385 | ) |                       |   | 6,480   |                           |  |   | (343         | ) |  |       | 334    |   |  |   | (3,914  | )
|                                                                                                         |  |                                 |         |   |                      
|Discontinued operations:                                                                                 |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from discontinued operations, net of tax                                                   |  |                                 |        |   |                       |   | 442     |                           |  |   | (788         | ) |  |       |       |   |  |   | (346    | )
|Gain on disposal, net of tax                                                                             |  |                                 | 30,247  |   |                       |   |        |                           |  |   |             |   |  |       |       |   |  |   | 30,247  |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from discontinued operations                                                               |  |                                 | 30,247  |   |                       |   | 442     |                           |  |   | (788         | ) |  |       |       |   |  |   | 29,901  |  
|                                                                                                         |  |                                 |         |   |                      
|Equity in income (loss) of subsidiaries                                                                  |  |                                 | 6,125   |   |                       |   |        |                           |  |   |             |   |  |       | (6,125 | ) |  |   |        |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                               | 25,987  |   |                       | $ | 6,922   |                           |  | $ | (1,131       | ) |  | $     | (5,791 | ) |  | $ | 25,987  |  
|                                                                                                         |  |                                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



17



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------- | ------ | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------- | - |  | - | ------- | -
|                                                                                                         |  | Reorganized Predecessor Company 2004 Second Quarter |       
|                                                                                                         |  | Worldwide                                           |        |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |        
|Operating revenue                                                                                        |  | $                                                   |       |   |                       | $ | 142,702 |                           |  | $ | 10,274       |   |  | $     | (2,883  | ) |  | $ | 150,093 |  
|                                                                                                         |  |                                                     |        |   |                      
|Operating expenses:                                                                                      |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                                                     |       |   |                       |   | 31,022  |                           |  |   | 5,081        |   |  |       | (2,684  | ) |  |   | 33,419  |  
|Bowling center operating expenses                                                                        |  |                                                     |       |   |                       |   | 70,240  |                           |  |   | 4,414        |   |  |       | (185    | ) |  |   | 74,469  |  
|Selling, general and administrative expenses                                                             |  |                                                     | 6,706  |   |                       |   | 4,506   |                           |  |   | 788          |   |  |       |        |   |  |   | 12,000  |  
|Depreciation and amortization                                                                            |  |                                                     | 229    |   |                       |   | 11,778  |                           |  |   | 240          |   |  |       |        |   |  |   | 12,247  |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Total operating expenses                                                                                 |  |                                                     | 6,935  |   |                       |   | 117,546 |                           |  |   | 10,523       |   |  |       | (2,869  | ) |  |   | 132,135 |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                                                     | (6,935 | ) |                       |   | 25,156  |                           |  |   | (249         | ) |  |       | (14     | ) |  |   | 17,958  |  
|                                                                                                         |  |                                                     |        |   |                      
|Non-operating (income) expenses:                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Interest expense                                                                                         |  |                                                     | 8,793  |   |                       |   | 66      |                           |  |   |             |   |  |       |        |   |  |   | 8,859   |  
|Interest income                                                                                          |  |                                                     | 97     |   |                       |   | (59     | )                         |  |   | (104         | ) |  |       |        |   |  |   | (66     | )
|Other (income) expense                                                                                   |  |                                                     | (8,852 | ) |                       |   | 5,776   |                           |  |   | 27           |   |  |       | (53     | ) |  |   | (3,102  | )
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                                                     | 38     |   |                       |   | 5,783   |                           |  |   | (77          | ) |  |       | (53     | ) |  |   | 5,691   |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                                                     | (6,973 | ) |                       |   | 19,373  |                           |  |   | (172         | ) |  |       | 39      |   |  |   | 12,267  |  
|                                                                                                         |  |                                                     |        |   |                      
|Provision for income taxes                                                                               |  |                                                     |       |   |                       |   | 1,204   |                           |  |   | 527          |   |  |       |        |   |  |   | 1,731   |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                                                     | (6,973 | ) |                       |   | 18,169  |                           |  |   | (699         | ) |  |       | 39      |   |  |   | 10,536  |  
|                                                                                                         |  |                                                     |        |   |                      
|Income (loss) from discontinued operations, net of tax                                                   |  |                                                     |       |   |                       |   | (656    | )                         |  |   | 2,614        |   |  |       |        |   |  |   | 1,958   |  
|                                                                                                         |  |                                                     |        |   |                      
|Equity in income (loss) of subsidiaries                                                                  |  |                                                     | 19,467 |   |                       |   |        |                           |  |   |             |   |  |       | (19,467 | ) |  |   |        |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                                                   | 12,494 |   |                       | $ | 17,513  |                           |  | $ | 1,915        |   |  | $     | (19,428 | ) |  | $ | 12,494  |  
|                                                                                                         |  |                                                     |        |   |                       |   |         |                           |  |   |              |   |  |       |         |   |  |   |         |  



18



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                         |  | New Company 2005 First Six Months |        
|                                                                                                         |  | Worldwide                         |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                                        |  | $                                 |        |   |                       | $ | 252,526 |                           |  | $ | 21,306       |   |  | $     | (6,943 | ) |  | $ | 266,889 |  
|                                                                                                         |  |                                   |         |   |                      
|Operating expenses:                                                                                      |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                                   |        |   |                       |   | 62,332  |                           |  |   | 11,800       |   |  |       | (6,982 | ) |  |   | 67,150  |  
|Bowling center operating expenses                                                                        |  |                                   |        |   |                       |   | 155,188 |                           |  |   | 8,896        |   |  |       | (290   | ) |  |   | 163,794 |  
|Selling, general and administrative expenses                                                             |  |                                   | 14,850  |   |                       |   | 9,614   |                           |  |   | 2,000        |   |  |       |       |   |  |   | 26,464  |  
|Asset impairment                                                                                         |  |                                   |        |   |                       |   | 1,303   |                           |  |   |             |   |  |       |       |   |  |   | 1,303   |  
|Depreciation and amortization                                                                            |  |                                   | 929     |   |                       |   | 20,619  |                           |  |   | 395          |   |  |       | (14    | ) |  |   | 21,929  |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                                 |  |                                   | 15,779  |   |                       |   | 249,056 |                           |  |   | 23,091       |   |  |       | (7,286 | ) |  |   | 280,640 |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                                   | (15,779 | ) |                       |   | 3,470   |                           |  |   | (1,785       | ) |  |       | 343    |   |  |   | (13,751 | )
|                                                                                                         |  |                                   |         |   |                      
|Non-operating (income) expenses:                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                         |  |                                   | 13,070  |   |                       |   | 111     |                           |  |   |             |   |  |       |       |   |  |   | 13,181  |  
|Interest income                                                                                          |  |                                   | (265    | ) |                       |   | (44     | )                         |  |   | (23          | ) |  |       |       |   |  |   | (332    | )
|Other (income) expense                                                                                   |  |                                   | (13,722 | ) |                       |   | 12,931  |                           |  |   | (3,948       | ) |  |       |       |   |  |   | (4,739  | )
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                                   | (917    | ) |                       |   | 12,998  |                           |  |   | (3,971       | ) |  |       |       |   |  |   | 8,110   |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                                   | (14,862 | ) |                       |   | (9,528  | )                         |  |   | 2,186        |   |  |       | 343    |   |  |   | (21,861 | )
|                                                                                                         |  |                                   |         |   |                      
|Provision (benefit) for income taxes                                                                     |  |                                   | 341     |   |                       |   | (126    | )                         |  |   | 1,433        |   |  |       |       |   |  |   | 1,648   |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                                   | (15,203 | ) |                       |   | (9,402  | )                         |  |   | 753          |   |  |       | 343    |   |  |   | (23,509 | )
|                                                                                                         |  |                                   |         |   |                      
|Discontinued operations:                                                                                 |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from discontinued operations, net of tax                                                   |  |                                   |        |   |                       |   | 6,856   |                           |  |   | (547         | ) |  |       |       |   |  |   | 6,309   |  
|Gain on disposal, net of tax                                                                             |  |                                   | 30,247  |   |                       |   |        |                           |  |   |             |   |  |       |       |   |  |   | 30,247  |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from discontinued operations                                                               |  |                                   | 30,247  |   |                       |   | 6,856   |                           |  |   | (547         | ) |  |       |       |   |  |   | 36,556  |  
|                                                                                                         |  |                                   |         |   |                      
|Equity in income (loss) of subsidiaries                                                                  |  |                                   | (1,997  | ) |                       |   |        |                           |  |   |             |   |  |       | 1,997  |   |  |   |        |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                                 | 13,047  |   |                       | $ | (2,546  | )                         |  | $ | 206          |   |  | $     | 2,340  |   |  | $ | 13,047  |  
|                                                                                                         |  |                                   |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



19



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------- | ------- | - | --------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------- | - |  | - | ------- | -
|                                                                                                         |  | Reorganized Predecessor Company 2004 First Six Months |        
|                                                                                                         |  | Worldwide                                             |         |   | GuarantorSubsidiaries |   |         | Non- GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |        
|Operating revenue                                                                                        |  | $                                                     |        |   |                       | $ | 262,193 |                            |  | $ | 19,663       |   |  | $     | (5,857  | ) |  | $ | 275,999 |  
|                                                                                                         |  |                                                       |         |   |                      
|Operating expenses:                                                                                      |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                                                       |        |   |                       |   | 60,600  |                            |  |   | 9,539        |   |  |       | (5,492  | ) |  |   | 64,647  |  
|Bowling center operating expenses                                                                        |  |                                                       |        |   |                       |   | 141,589 |                            |  |   | 8,056        |   |  |       | (351    | ) |  |   | 149,294 |  
|Selling, general and administrative expenses                                                             |  |                                                       | 11,435  |   |                       |   | 9,819   |                            |  |   | 1,704        |   |  |       |        |   |  |   | 22,958  |  
|Depreciation and amortization                                                                            |  |                                                       | 895     |   |                       |   | 23,740  |                            |  |   | 446          |   |  |       |        |   |  |   | 25,081  |  
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Total operating expenses                                                                                 |  |                                                       | 12,330  |   |                       |   | 235,748 |                            |  |   | 19,745       |   |  |       | (5,843  | ) |  |   | 261,980 |  
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                                                       | (12,330 | ) |                       |   | 26,445  |                            |  |   | (82          | ) |  |       | (14     | ) |  |   | 14,019  |  
|                                                                                                         |  |                                                       |         |   |                      
|Non-operating (income) expenses:                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Interest expense                                                                                         |  |                                                       | 17,918  |   |                       |   | 128     |                            |  |   |             |   |  |       |        |   |  |   | 18,046  |  
|Interest income                                                                                          |  |                                                       | 89      |   |                       |   | (107    | )                          |  |   | (108         | ) |  |       |        |   |  |   | (126    | )
|Other (income) expense                                                                                   |  |                                                       | (16,288 | ) |                       |   | 12,411  |                            |  |   | 621          |   |  |       | (53     | ) |  |   | (3,309  | )
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                                                       | 1,719   |   |                       |   | 12,432  |                            |  |   | 513          |   |  |       | (53     | ) |  |   | 14,611  |  
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                                                       | (14,049 | ) |                       |   | 14,013  |                            |  |   | (595         | ) |  |       | 39      |   |  |   | (592    | )
|                                                                                                         |  |                                                       |         |   |                      
|Provision for income taxes                                                                               |  |                                                       |        |   |                       |   | 959     |                            |  |   | 713          |   |  |       |        |   |  |   | 1,672   |  
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                                                       | (14,049 | ) |                       |   | 13,054  |                            |  |   | (1,308       | ) |  |       | 39      |   |  |   | (2,264  | )
|                                                                                                         |  |                                                       |         |   |                      
|Income from discontinued operations, net of tax                                                          |  |                                                       |        |   |                       |   | 343     |                            |  |   | 1,743        |   |  |       |        |   |  |   | 2,086   |  
|                                                                                                         |  |                                                       |         |   |                      
|Equity in income (loss) of subsidiaries                                                                  |  |                                                       | 13,871  |   |                       |   |        |                            |  |   |             |   |  |       | (13,871 | ) |  |   |        |  
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                                                     | (178    | ) |                       | $ | 13,397  |                            |  | $ | 435          |   |  | $     | (13,832 | ) |  | $ | (178    | )
|                                                                                                         |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |         |   |  |   |         |  



20



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows



|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|------------------------------------------------------------------------------ |  | --------------------------------- | ------- | - | --------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                               |  | New Company 2005 First Six Months |        
|                                                                               |  | Worldwide                         |         |   | GuarantorSubsidiaries |   |         | Non- GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net cash provided by (used in) operating activities from continuing operations |  | $                                 | (669    | ) |                       | $ | (380    | )                          |  | $ | 51           |   |  | $     | 2,123  |   |  | $ | 1,125   |  
|                                                                               |  |                                   |         |   |                      
|Cash flows from investing activities:                                          |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Capital expenditures                                                           |  |                                   | (1,207  | ) |                       |   | (20,050 | )                          |  |   | (256         | ) |  |       |       |   |  |   | (21,513 | )
|Proceeds from the sale of:                                                     |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Property and equipment                                                         |  |                                   |        |   |                       |   | 1,548   |                            |  |   |             |   |  |       |       |   |  |   | 1,548   |  
|Sale of subsidiary                                                             |  |                                   | 69,875  |   |                       |   |        |                            |  |   |             |   |  |       |       |   |  |   | 69,875  |  
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash provided by (used in) investing activities                            |  |                                   | 68,668  |   |                       |   | (18,502 | )                          |  |   | (256         | ) |  |       |       |   |  |   | 49,910  |  
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cash flows from financing activities:                                          |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Repayments under long-term debt                                                |  |                                   | (47,080 | ) |                       |   |        |                            |  |   |             |   |  |       |       |   |  |   | (47,080 | )
|Repayment under capital lease obligations                                      |  |                                   |        |   |                       |   | (211    | )                          |  |   |             |   |  |       |       |   |  |   | (211    | )
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash used in financing activities                                          |  |                                   | (47,080 | ) |                       |   | (211    | )                          |  |   |             |   |  |       |       |   |  |   | (47,291 | )
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Effect of exchange rates on cash                                               |  |                                   |        |   |                       |   |        |                            |  |   |             |   |  |       | (2,123 | ) |  |   | (2,123  | )
|Net cash provided by (used in) discontinued operations                         |  |                                   |        |   |                       |   | 17,576  |                            |  |   | (647         | ) |  |       |       |   |  |   | 16,929  |  
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net increase (decrease) in cash                                                |  |                                   | 20,919  |   |                       |   | (1,517  | )                          |  |   | (852         | ) |  |       |       |   |  |   | 18,550  |  
|                                                                               |  |                                   |         |   |                      
|Cash at beginning of period                                                    |  |                                   | 3,379   |   |                       |   | 6,484   |                            |  |   | 2,871        |   |  |       |       |   |  |   | 12,734  |  
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cash at end of period                                                          |  | $                                 | 24,298  |   |                       | $ | 4,967   |                            |  | $ | 2,019        |   |  | $     |       |   |  | $ | 31,284  |  
|                                                                               |  |                                   |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  



21



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating
Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows



|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|------------------------------------------------------------------------------ |  | ----------------------------------------------------- | ------- | - | --------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                               |  | Reorganized Predecessor Company 2004 First Six Months |        
|                                                                               |  | Worldwide                                             |         |   | GuarantorSubsidiaries |   |         | Non- GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Net cash provided by (used in) operating activities from continuing operations |  | $                                                     | (4,613  | ) |                       | $ | 15,452  |                            |  | $ | 2,649        |   |  | $     | 1,754  |   |  | $ | 15,242  |  
|                                                                               |  |                                                       |         |   |                      
|Cash flows from investing activities:                                          |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Capital expenditures                                                           |  |                                                       | (1,097  | ) |                       |   | (19,583 | )                          |  |   | (673         | ) |  |       |       |   |  |   | (21,353 | )
|Proceeds from the sale of property and equipment                               |  |                                                       |        |   |                       |   | 3,394   |                            |  |   | 33           |   |  |       |       |   |  |   | 3,427   |  
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash used in investing activities                                          |  |                                                       | (1,097  | ) |                       |   | (16,189 | )                          |  |   | (640         | ) |  |       |       |   |  |   | (17,926 | )
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cash flows from financing activities:                                          |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Payments on long-term debt                                                     |  |                                                       | (28,380 | ) |                       |   |        |                            |  |   |             |   |  |       |       |   |  |   | (28,380 | )
|Repayment under capital lease obligations                                      |  |                                                       |        |   |                       |   | (146    | )                          |  |   |             |   |  |       |       |   |  |   | (146    | )
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net cash used in financing activities                                          |  |                                                       | (28,380 | ) |                       |   | (146    | )                          |  |   |             |   |  |       |       |   |  |   | (28,526 | )
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Effect of exchange rates on cash                                               |  |                                                       |        |   |                       |   |        |                            |  |   |             |   |  |       | (1,754 | ) |  |   | (1,754  | )
|Net cash provided by discontinued operations                                   |  |                                                       |        |   |                       |   | 3,535   |                            |  |   | 2,447        |   |  |       |       |   |  |   | 5,982   |  
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net increase (decrease) in cash                                                |  |                                                       | (34,090 | ) |                       |   | 2,652   |                            |  |   | 4,456        |   |  |       |       |   |  |   | (26,982 | )
|                                                                               |  |                                                       |         |   |                      
|Cash at beginning of period                                                    |  |                                                       | 48,123  |   |                       |   | 5,440   |                            |  |   | 2,712        |   |  |       |       |   |  |   | 56,275  |  
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cash at end of period                                                          |  | $                                                     | 14,033  |   |                       | $ | 8,092   |                            |  | $ | 7,168        |   |  | $     |       |   |  | $ | 29,293  |  
|                                                                               |  |                                                       |         |   |                       |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  



22



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(in thousands, except as otherwise noted)

(unaudited)



NOTE 14. SUBSEQUENT EVENTS



On February 8, 2005, we sold our 42 bowling centers in Australia for
approximately $47,810 and exited bowling center operations in that country. The purchase price is subject to certain post-closing adjustments.



On February 8, 2005, we prepaid the principal balance of $482 that was due on a capital lease for bowling equipment, which we lease to a customer in
Portugal.



On February 8, 2005, our Board of Directors approved
a dividend of approximately $46,830 to Kingpin Intermediate Corp., which is our sole shareholder. This dividend will eventually be distributed to the equity holders of Kingpin Holdings. Under our Credit Agreement and Indenture, subject to certain
restrictions and conditions, we may distribute up to 35% of the net cash proceeds from the sale of certain international operations. As a condition to making such distribution, the Indenture requires us to first make an offer to the holders of our
Subordinated Notes to purchase Subordinated Notes with an aggregated principal amount equal to 35% of such net cash proceeds (as defined in the Indenture) at a price equal to 102% of the aggregate principal amount being purchased. We expect to make
an offer to purchase approximately $46,830 of Subordinated Notes at 102% on or about February 11, 2005. The offer will expire twenty business days after it is made.



23



---

##### Table of Contents

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



Introduction



AMF Bowling Worldwide, Inc., a Delaware Corporation, and its subsidiaries (which may be referred to as Worldwide, the Company, we, us or our) operate in
two business segments: bowling center operations (Centers) and bowling products operations (Products). At December 26, 2004, Centers, the largest segment, represented 80.5% of consolidated revenue. In reviewing Centers,
management focuses on revenue, operating expenses and capital expenditures. In reviewing Products, management focuses on working capital as well as revenue, operating expenses and gross profit margin.



To facilitate a meaningful comparison, certain portions of this
Managements Discussion and Analysis of Financial Condition and Results of Operations (the MD&A) discuss the results of Centers and Products separately.



The MD&A discussion should be read in conjunction with the unaudited interim condensed consolidated financial statements
and the notes to the condensed consolidated financial statements. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. Certain totals may be affected by rounding. Unless the
context otherwise indicates, dollar amounts in this MD&A are in millions.



Our Centers segment had 425 bowling centers on December 26, 2004 (368 in the U.S. and 57 internationally). On September 30, 2004, we sold 33 bowling centers in the United Kingdom for approximately $71.2 million and
exited bowling center operations in that country.



On February
8, 2005, we sold our 42 bowling centers in Australia for approximately $47.8 million and exited bowling center operations in that country. The purchase price is subject to certain post-closing adjustments. The results of operations of the bowling
centers in the United Kingdom and Australia are reported as discontinued operations for all periods presented.



Our Products segment includes the manufacture of bowling equipment such as automatic pinspotters, automatic scoring equipment, bowling pins, lanes, ball
returns, lane machines, bowling center supplies and the resale of other related products, including bowling bags and shoes.



Merger



On November 26, 2003, Kingpin Holdings, LLC (Kingpin Holdings) and its wholly-owned subsidiary, Kingpin Merger Sub, Inc. (Merger Sub), entered into an Agreement and Plan of Merger with
Worldwide (the Merger Agreement). Pursuant to the Merger Agreement, on February 27, 2004, Merger Sub was merged into Worldwide with Worldwide being the surviving corporation (the Merger). The Company, as it existed after the
Merger, is sometimes referred to as the New Company. Each shareholder of Worldwide received $25.00 in cash for each share of the common stock of Worldwide that was outstanding prior to the Merger including vested options and warrants,
for aggregate proceeds (including option proceeds) of $258.7 million. The old common stock was canceled and the common stock of Merger Sub became the new common stock of Worldwide. As part of the Merger, Kingpin Intermediate Corp., a wholly-owned
subsidiary of Kingpin Holdings, became the sole shareholder of Worldwide.



Kingpin Holdings is a Delaware limited liability company formed at the direction of Code Hennessy & Simmons LLC, a Chicago-based private equity firm.



Consolidated Results



The results of operations of the consolidated group of companies, Centers and Products are discussed below. The business segment results are presented
before intersegment eliminations since we believe this provides a more accurate comparison of performance by segment. The intersegment eliminations are included in the consolidated results and are not material.



24



---

##### Table of Contents

Prior to February 27, 2004, we were referred to as the Reorganized Predecessor Company and,
as we existed on and after February 27, 2004, are referred to as the New Company. As a result of the Merger, our financial results during the three and six months ended December 26, 2004 and the three and six months ended December 28,
2003 are not comparable due to the Merger described above.



|                                                                                                  |  |                                                        
|------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------
|Period                                                                                            |  | Referred to as                                         
|Results for the New Company from September 27, 2004 through December 26, 2004                     |  | New Company 2005 Second Quarter                      
|                                                                                                  | 
|Results for the New Company from June 28, 2004 through December 26, 2004                          |  | New Company 2005 First Six Months                    
|                                                                                                  | 
|Results for the Reorganized Predecessor Company from September 29, 2003 through December 28, 2003 |  | Reorganized Predecessor Company 2004 Second Quarter  
|                                                                                                  | 
|Results for the Reorganized Predecessor Company from June 30, 2003 through December 28, 2003      |  | Reorganized Predecessor Company 2004 First Six Months



We report on a retail
calendar year, with each quarter comprised of one 5-week period and two 4-week periods. Fiscal year 2004 had 52 weeks and fiscal year 2005 has 53 weeks, with the extra week being reported in the fourth quarter.



25



---

##### Table of Contents

Consolidated Results



|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|------------------------------------------------------------ |  | ------------------ | ----- | - | ----------------------------- | - | ----- | -------------------- |  | - | ----------------------------- | - |  | - | ----- | -
|                                                             |  | NewCompany         |       |   | ReorganizedPredecessorCompany |   |       | NewCompany           |  |   | ReorganizedPredecessorCompany |  
|(In millions)                                                |  | 2005 SecondQuarter |       |   | 2004 SecondQuarter            |   |       | 2005 FirstSix Months |  |   | 2004 FirstSix Months          |  
|Operating revenue                                            |  | $                  | 149.3 |   |                               | $ | 150.1 |                      |  | $ | 266.9                         |   |  | $ | 276.0 |  
|                                                             |  |                    |       |  
|Operating expenses:                                          |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Cost of goods sold                                           |  |                    | 39.4  |   |                               |   | 33.4  |                      |  |   | 67.2                          |   |  |   | 64.6  |  
|Bowling center operating expenses                            |  |                    | 79.9  |   |                               |   | 74.5  |                      |  |   | 163.8                         |   |  |   | 149.3 |  
|Selling, general and administrative expenses                 |  |                    | 15.7  |   |                               |   | 12.0  |                      |  |   | 26.5                          |   |  |   | 23.0  |  
|Asset impairment                                             |  |                    |      |   |                               |   |      |                      |  |   | 1.3                           |   |  |   |      |  
|Depreciation and amortization                                |  |                    | 10.6  |   |                               |   | 12.2  |                      |  |   | 21.9                          |   |  |   | 25.1  |  
|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Operating income (loss)                                      |  |                    | 3.6   |   |                               |   | 18.0  |                      |  |   | (13.8                         | ) |  |   | 14.0  |  
|                                                             |  |                    |       |  
|Interest expense, net                                        |  |                    | 6.4   |   |                               |   | 8.8   |                      |  |   | 12.8                          |   |  |   | 17.9  |  
|Other income, net                                            |  |                    | (0.1  | ) |                               |   | (3.1  | )                    |  |   | (4.7                          | ) |  |   | (3.3  | )
|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Income (loss) from continuing operations before income taxes |  |                    | (2.6  | ) |                               |   | 12.3  |                      |  |   | (21.9                         | ) |  |   | (0.6  | )
|Provision for income taxes                                   |  |                    | 1.3   |   |                               |   | 1.7   |                      |  |   | 1.6                           |   |  |   | 1.7   |  
|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Income (loss) from continuing operations                     |  |                    | (3.9  | ) |                               |   | 10.5  |                      |  |   | (23.5                         | ) |  |   | (2.3  | )
|                                                             |  |                    |       |  
|Discontinued operations:                                     |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Income (loss) from discontinued operations, net of tax       |  |                    | (0.3  | ) |                               |   | 2.0   |                      |  |   | 6.3                           |   |  |   | 2.1   |  
|Gain on disposal, net of tax                                 |  |                    | 30.2  |   |                               |   |      |                      |  |   | 30.2                          |   |  |   |      |  
|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  
|Income from discontinued operations                          |  |                    | 29.9  |   |                               |   | 2.0   |                      |  |   | 36.6                          |   |  |   | 2.1   |  
|                                                             |  |                    |       |  
|Net income (loss)                                            |  | $                  | 26.0  |   |                               | $ | 12.5  |                      |  | $ | 13.0                          |   |  | $ | (0.2  | )
|                                                             |  |                    |       |   |                               |   |       |                      |  |   |                               |   |  |   |       |  



Revenue



Consolidated operating revenue for the New Company 2005 Second Quarter was
$149.3 million, a decrease of $0.8 million, or 0.5%, compared with the Reorganized Predecessor Company 2004 Second Quarter. This decrease was partially attributable to a $2.6 million decrease in U.S. constant center revenue due primarily to a
decrease in league and open lineage (number of games bowled per lane per day). In addition, closed centers represent a $3.0 million negative variance compared with the prior year period. These decreases were partially offset by an increase in
Products revenue of $4.9 million, or 14.6%.



Consolidated
operating revenue for the New Company 2005 First Six Months was $266.9 million, a decrease of $9.1 million, or 3.3%, compared with the Reorganized Predecessor Company 2004 First Six Months. This decrease was attributable to a $5.2 million decrease
in U.S. constant center revenue due primarily to a decrease in league lineage. Additionally, closed centers represent a $4.7 million negative variance compared with the prior year period. These losses were partially offset by an increase in Products
revenue of $3.6 million, or 5.1%.



Depreciation and Amortization



Depreciation and amortization decreased $1.6 million, or
13.1%, in the New Company 2005 Second Quarter and $3.2 million, or 12.7%, in the New Company 2005 First Six Months when compared with the prior year periods. These decreases were primarily attributable to decreases in depreciation as a result of the
sale-leaseback agreements that were entered into in conjunction with the Merger (the Sale-Leaseback Agreements) of $1.8 million and $3.6



26



---

##### Table of Contents

million for the New Company 2005 Second Quarter and New Company 2005 First Six Months, respectively. Additionally, Centers depreciation decreased as a result
of machinery and equipment acquired in 1996 and 1997 becoming fully depreciated. These decreases were partially offset by an increase in depreciation primarily attributable to adjustments made as a result of the application of purchase method
accounting related to the Merger of $2.7 million and $5.5 million for the New Company 2005 Second Quarter and New Company 2005 First Six Months, respectively.



Asset Impairment



In the New Company 2005 First Six Months, we recorded $1.3 million related to asset impairment charges representing the difference between the fair market
value and carrying value of impaired assets in the U.S.



Interest Expense,
net



Interest expense, net decreased $2.4 million, or
27.3%, in the New Company 2005 Second Quarter and $5.1 million, or 28.5%, in the New Company 2005 First Six Months compared with prior year periods. These decreases are primarily the result of lower principal amounts and interest rates under our
senior secured credit agreement (the Credit Agreement).



Provision for Income Taxes



Total income tax
expense increased to $5.1 million in the New Company 2005 Second Quarter from $1.2 million in the Reorganized Predecessor Company 2004 Second Quarter, including tax expense on discontinued operations. The increase to income tax expense for the
quarter is primarily attributable to the gain on the sale of our bowling center operations in the United Kingdom.



Total income tax expense increased to $8.2 million in the New Company 2005 First Six Months from $1.7 million in the Reorganized Predecessor Company 2004
First Six Months. The tax provision recorded for the New Company 2005 First Six Months includes federal, state, and foreign taxes, including tax expense on discontinued operations. The increase is primarily due to the gain on the sale of our bowling
center operations in the United Kingdom and the taxation of individual subsidiaries by separate foreign jurisdictions. Various foreign subsidiaries and branches recorded a combined tax expense of $5.2 million as compared to an expense of $0.8
million for the Reorganized Predecessor Company 2004 First Six Months based on various foreign tax rates. This increase is due in part to property sales in Australia and a lease buyout for a bowling center in France. AMF Bowling Centers, Inc, a
wholly-owned indirect subsidiary of Worldwide, recorded a state tax benefit of $0.4 million for the six months ended December 26, 2004 compared with an expense of $0.9 million for the Reorganized Predecessor Company 2004 First Six Months.



Net Income (Loss)



Net income (loss) for the New Company 2005 Second Quarter and New Company
2005 First Six Months totaled $26.0 million and $13.0 million, respectively, compared with $12.5 million and $(0.2) million, respectively in the Reorganized Predecessor Company 2004 Second Quarter and the Reorganized Predecessor Company 2004 First
Six Months. These increases were primarily attributable to the changes discussed above as well as the recognition of the gain on the disposal of the discontinued operations of our United Kingdom bowling centers of $30.2 million in the New Company
2005 Second Quarter. In the New Company 2005 First Six Months we also recognized a $4.2 million gain related to a negotiated termination of one of our bowling center leases in France. Additionally, the income contributed from our discontinued
operations increased by $4.2 million in the New Company 2005 First Six Months. These increases were partially offset by increases in operating expenses primarily attributable to an increase in rent as a result of the Sale-Leaseback Agreements.
Additionally, in the New Company 2005 First Six Months, we incurred expenses of $5.6 million related to strategic initiatives, $0.6 million related to certain senior management severance obligations, $1.3 million in connection with losses related to
a forward exchange contract and $0.9 million related to actions alleging violations of federal legislation involving unsolicited communications.



27



---

##### Table of Contents

Comprehensive Income



Comprehensive income for the New Company 2005 Second Quarter and the New Company 2005 First Six Months totaled $27.2 million and $12.5 million,
respectively, compared with $17.1 million and $5.0 million for the Reorganized Predecessor Company 2004 Second Quarter and the Reorganized Predecessor Company 2004 First Six Months. These increases are primarily attributable to the gain recognized
on the sale of our bowling centers in the United Kingdom.



Centers



Centers results reflect the operations of our bowling
centers located in the U.S. and internationally. The results of operations for the centers in the United Kingdom and Australia have been reported as discontinued operations for all periods presented and are not included in the tables or discussion
below.



|                                  |  |                    |       |                               |   |                      |  |                               |       |  |   |      
|--------------------------------- |  | ------------------ | ----- | ----------------------------- | - | -------------------- |  | ----------------------------- | ----- |  | - | -----
|                                  |  | NewCompany         |       | ReorganizedPredecessorCompany |   | NewCompany           |  | ReorganizedPredecessorCompany
|(In millions)                     |  | 2005 SecondQuarter |       | 2004 SecondQuarter            |   | 2005 FirstSix Months |  | 2004 FirstSix Months         
|Operating revenue (a)             |  | $                  | 117.2 |                               | $ | 122.5                |  | $                             | 207.6 |  | $ | 217.3
|                                  |  |                    |       |                              
|Operating expenses:               |  |                    |       |                               |   |                      |  |                               |       |  |   |      
|Cost of goods sold                |  |                    | 11.3  |                               |   | 11.7                 |  |                               | 19.6  |  |   | 20.3 
|Bowling center operating expenses |  |                    | 84.2  |                               |   | 74.7                 |  |                               | 168.5 |  |   | 150.0
|Asset impairment                  |  |                    |      |                               |   |                     |  |                               | 1.3   |  |   |     
|Depreciation and amortization     |  |                    | 8.4   |                               |   | 10.8                 |  |                               | 17.5  |  |   | 21.6 
|                                  |  |                    |       |                               |   |                      |  |                               |       |  |   |      
|Operating income                  |  | $                  | 13.3  |                               | $ | 25.3                 |  | $                             | 0.7   |  | $ | 25.4 
|                                  |  |                    |       |                               |   |                      |  |                               |       |  |   |      

---

|(a) | Before intersegment eliminations.
|--- | ---------------------------------



To facilitate a meaningful comparison, the constant center results discussed below reflect the results of 383 centers (368 located in the U.S. and 15
international centers) that have been in operation one full fiscal year as of June 27, 2004.



The three principal sources of revenue and the percentage of each to total revenue are presented below:



|                  |  |                      |   |  |                               |  
|----------------- |  | -------------------- | - |  | ----------------------------- | -
|                  |  | NewCompany           |   |  | ReorganizedPredecessorCompany |  
|                  |  | 2005 FirstSix Months |   |  | 2004 FirstSix Months          |  
|Revenue:          |  |                      |   |  |                               |  
|Bowling           |  | 58.2                 | % |  | 58.5                          | %
|Food and beverage |  | 27.4                 | % |  | 27.3                          | %
|Ancillary sources |  | 14.5                 | % |  | 14.2                          | %
|                  |  |                      |   |  |                               |  



Bowling revenue, the
largest component of a centers revenue, is derived from league play and recreational play, each representing approximately 50% of annual bowling revenue in U.S centers operations. League lineage (number of games bowled per lane per day) has
been declining for a number of years. Recreational play includes managed, or scheduled play (such as birthday or corporate parties), and open, or unscheduled play. The decline in U.S. centers revenue that could be expected from the decline in
lineage has been generally offset with price increases.



28



---

##### Table of Contents

On September 30, 2004, we sold our bowling center business that operated 33 bowling centers in the United
Kingdom for gross cash proceeds of approximately $71.2 million and exited bowling center operations in that country.



On February 8, 2005, we sold our 42 operating bowling centers in Australia for approximately $47.8 million, subject to certain post-closing adjustments
and exited bowling center operations in that country.



2005 Second
Quarter compared with 2004 Second Quarter



Centers
operating revenue for the New Company 2005 Second Quarter decreased $5.3 million, or 4.3%, as compared with the Reorganized Predecessor Company 2004 Second Quarter. U.S. constant center revenue decreased $2.6 million, or 2.3%, primarily the result
of a decrease in league and open lineage. Also contributing to this decrease is a decline in revenue of $3.0 million attributable to the closure of 12 bowling centers since June 29, 2003. These decreases were partially offset by an increase in new
center revenue of $0.1 million.



Bowling center operating
expenses increased $9.5 million, or 12.7%. This increase was primarily due to increases in U.S. constant center operating expenses of $9.9 million, or 14.8%, of which $7.3 million is attributable to an increase in rent as a result of the
Sale-Leaseback Agreements. Excluding the impact of the increase in rent expense, U.S. constant center operating expenses increased approximately 3.9% primarily the result of increased payroll and insurance expenses. Additionally, U.S. centers
recorded a charge of $0.9 million related to actions alleging violations of federal legislation involving unsolicited communications. In the Reorganized Predecessor Company 2004 Second Quarter, Centers recognized $1.4 million related to casualty
gains. Offsetting these increases was a decrease in operating expenses of $2.2 million due to closed bowling centers. As a percentage of revenue, Centers operating expenses were 71.8% for the New Company 2005 Second Quarter and 61.0% for the
Reorganized Predecessor Company 2004 Second Quarter.



Depreciation and amortization decreased $2.4 million, or 22.2%, primarily attributable to a $1.8 million decrease as a result of the Sale-Leaseback Agreements. Additionally, U.S. centers depreciation decreased as a result of machinery and
equipment acquired in 1996 and 1997 becoming fully depreciated. These decreases were partially offset by an increase in depreciation of $2.3 million primarily attributable to adjustments made as a result of the application of purchase method
accounting related to the Merger.



Operating income was $13.3
million in the New Company 2005 Second Quarter versus operating income of $25.3 million in the Reorganized Predecessor Company 2004 Second Quarter primarily due to the decrease in revenue and increased operating expenses partially offset by the
decreases in depreciation and amortization as discussed above.



2005
First Six Months compared with 2004 First Six Months



Centers operating revenue for the New Company 2005 First Six Months decreased $9.7 million, or 4.5%, as compared with the Reorganized Predecessor Company 2004 First Six Months. U.S. constant center revenue decreased $5.2 million, or 2.6%,
primarily the result of a decrease in league lineage. Also contributing to this decrease is a decline in revenue of $4.7 million attributable to the closure of 12 bowling centers since June 29, 2003. These decreases were partially offset by an
increase in new center revenue of $0.3 million.



Bowling center
operating expenses increased $18.5 million, or 12.3%. This increase was primarily due to increases in U.S. constant center operating expenses of $18.1 million, or 13.8%, of which $14.6 million is attributable to an increase in rent as a result of
the Sale-Leaseback Agreements. Excluding the impact of the increase in rent expense, U.S. constant center operating expenses increased approximately 2.6% primarily attributable to increases in payroll, insurance and tax expenses. Additionally, U.S.
centers recorded a charge of $0.9 million related to actions alleging violations of federal legislation involving unsolicited communications. In the Reorganized Predecessor Company 2004 Second Quarter, Centers recognized $1.4 million related to
casualty gains. Offsetting these increases was a decrease in operating expenses of $3.2 million due to closed bowling centers. In the New Company 2005 First Six Months, international centers incurred charges of $0.8 million related to losses on
disposals of fixed assets while U.S. centers recognized $0.5 million related to gains on disposals of assets. As a percentage of revenue, Centers operating expenses were 81.2% for the New Company 2005 First Six Months and 69.0% for the Reorganized
Predecessor Company 2004 First Six Months.



29



---

##### Table of Contents

Depreciation and amortization decreased $4.1 million, or 19.0%, primarily attributable to a $3.6 million
decrease as a result of the Sale-Leaseback Agreements. Additionally, U.S. centers depreciation decreased as a result of machinery and equipment acquired in 1996 and 1997 becoming fully depreciated. These decreases were partially offset by an
increase in depreciation of $4.5 million primarily attributable to adjustments made as a result of the application of purchase method accounting related to the Merger.



Operating income was $0.7 million in the New Company 2005 First Six Months versus operating income of $25.4 million in the
Reorganized Predecessor Company 2004 First Six Months primarily due to the decrease in revenue as well as the increase in operating expenses partially offset by the decrease in depreciation and amortization as discussed above. Additionally, Centers
recorded charges related to asset impairment resulting from center closures of $1.3 million in the New Company 2005 First Six Months.



30



---

##### Table of Contents

Products



|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|-------------------------------------------- |  | ------------------ | ---- | - | ------------------------------- | - | ---- | -------------------- |  | - | ------------------------------- | - |  | - | ---- | -
|                                             |  | NewCompany         |      |   | Reorganized Predecessor Company |   |      | New Company          |  |   | Reorganized Predecessor Company |  
|(In millions)                                |  | 2005 SecondQuarter |      |   | 2004 SecondQuarter              |   |      | 2005 FirstSix Months |  |   | 2004 First Six Months           |  
|Products (a):                                |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Operating revenue                            |  | $                  | 38.5 |   |                                 | $ | 33.6 |                      |  | $ | 73.6                            |   |  | $ | 70.0 |  
|Cost of goods sold                           |  |                    | 30.2 |   |                                 |   | 27.4 |                      |  |   | 57.1                            |   |  |   | 54.9 |  
|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Gross profit                                 |  |                    | 8.3  |   |                                 |   | 6.2  |                      |  |   | 16.5                            |   |  |   | 15.1 |  
|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Selling, general and administrative expenses |  |                    | 6.2  |   |                                 |   | 5.3  |                      |  |   | 11.7                            |   |  |   | 11.5 |  
|Depreciation and amortization                |  |                    | 1.8  |   |                                 |   | 1.3  |                      |  |   | 3.6                             |   |  |   | 2.8  |  
|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Operating income (loss)                      |  | $                  | 0.3  |   |                                 | $ | (0.5 | )                    |  | $ | 1.2                             |   |  | $ | 0.7  |  
|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Selected data:                               |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  
|Gross profit margin                          |  |                    | 21.6 | % |                                 |   | 18.5 | %                    |  |   | 22.4                            | % |  |   | 21.6 | %
|                                             |  |                    |      |   |                                 |   |      |                      |  |   |                                 |   |  |   |      |  

---

|(a) | Before intersegment eliminations.
|--- | ---------------------------------



2005 Second Quarter compared with 2004 Second Quarter



Products operating revenue increased $4.9 million, or 14.6%, primarily attributable to an increase in revenue in the U.S., Europe and Mexico of $3.6
million, $2.1 million and $0.6 million, respectively. These increases were partially offset by a decrease in revenue in Japan of $1.8 million.



Gross profit increased $2.1 million, or 33.9%. The gross profit margin was 21.6% in the New Company 2005 Second Quarter compared with 18.5% in the
Reorganized Predecessor Company 2004 Second Quarter. The increased margin percentage was primarily attributable to the increase in revenue and increases in intercompany pricing.



Products selling, general and administrative expenses increased $0.9 million, or 17.0%, compared with the prior year
quarter. The increase in expenses is primarily attributable to an increase in bad debt and legal expenses.



Depreciation and amortization increased $0.5 million, or 38.5%, primarily due to adjustments made as a result of the application of purchase method
accounting related to the Merger.



Operating income was $0.3
million in the New Company 2005 Second Quarter compared with a loss of $0.5 million in the Reorganized Predecessor Company 2004 Second Quarter. The increase in operating income is primarily due to the increase in revenue partially offset by the
increase in selling, general and administrative expenses as well as depreciation and amortization as discussed above.



2005 First Six Months compared with 2004 First Six Months



Products operating revenue increased $3.6 million, or 5.1%, primarily attributable to increased revenue in the U.S. and Mexico of $5.4 million and $1.2
million, respectively. These increases were partially offset by a decrease in revenue in Japan of $3.0 million.



Gross profit increased $1.4 million, or 9.3%. The gross profit margin was 22.4% in the New Company 2005 First Six Months compared with 21.6% in the
Reorganized Predecessor Company 2004 First Six Months. The increased margin percentage was primarily attributable to the increase in revenue and increases in intercompany pricing.



31



---

##### Table of Contents

Products selling, general and administrative expenses increased $0.2 million, or 1.7%, compared with the
prior year quarter. The increase in expenses is primarily attributable to an increase in advertising and payroll expenses as well as bad debt and legal expenses. These increases are partially offset by the recognition of $0.7 million in gains on the
disposal of two Products branches.



Depreciation and
amortization increased $0.8 million, or 28.6%, primarily due to adjustments made as a result of the application of purchase method accounting related to the Merger.



Operating income was $1.2 million in the New Company 2005 First Six Months, an increase of $0.5 million, or 71.4%, when
compared with the Reorganized Predecessor Company 2004 First Six Months. The increase in operating income is primarily due to the increase in revenue partially offset by the increases in selling, general and administrative expenses and depreciation
and amortization as discussed above.



32



---

##### Table of Contents

Liquidity - Capital Resources  Asset Sales  Capital Expenditures



General



We have $87.9 million in term loans (the Term Loan) under our Credit Agreement which also has an aggregate
revolving loan commitment of $40.0 million (the Revolver).



We generally rely on cash flow from operations and borrowings under the Revolver to fund our liquidity and capital expenditure needs. Our ability to repay our indebtedness will depend on future performance, which is subject to general
economic, financial, competitive, legislative, regulatory and other factors. Management believes that available cash flow from operations and borrowings available or capacity under the Revolver will be sufficient to fund its liquidity and capital
expenditure needs.



Liquidity



As of December 26, 2004, working capital was $51.4 million compared with a
working capital deficit of $15.5 million at June 27, 2004. Excluding assets and liabilities held for sale, working capital was $10.3 million at December 26, 2004. This change was primarily attributable to a decrease in accounts payable and accrued
liabilities of $8.1 million and $4.3 million, respectively, as well as an increase in cash of $18.6 million. Partially offsetting these increases was a decrease in prepaid expenses and other current assets of $5.8 million.



Operating Cash Flow



|                                         |  |                      |       |   |                                 |   |      |  
|---------------------------------------- |  | -------------------- | ----- | - | ------------------------------- | - | ---- | -
|                                         |  | New Company          |       |   | Reorganized Predecessor Company |  
|                                         |  | 2005 FirstSix Months |       |   | 2004 FirstSix Months            |  
|Cash flows from operating activities:    |  |                      |       |   |                                 |   |      |  
|Before changes in assets and liabilities |  | $                    | 36.5  |   |                                 | $ | 22.6 |  
|Working capital                          |  |                      | 10.3  |   |                                 |   | (9.5 | )
|Other changes                            |  |                      | (9.1  | ) |                                 |   | 4.2  |  
|Discontinued operations                  |  |                      | (36.6 | ) |                                 |   | (2.1 | )
|                                         |  |                      |       |   |                                 |   |      |  
|Total                                    |  | $                    | 1.1   |   |                                 | $ | 15.2 |  
|                                         |  |                      |       |   |                                 |   |      |  



Net cash provided by
operating activities was $1.1 million in the New Company 2005 First Six Months compared with $15.2 million in the Reorganized Predecessor Company 2004 First Six Months, a decrease of $14.1 million. The decrease in net cash provided by operating
activities is primarily the result of an increase in the loss from continuing operations partially offset by improved working capital utilization.



Investing



|                                                 |  |                       |       |   |                                 |   |       |  
|------------------------------------------------ |  | --------------------- | ----- | - | ------------------------------- | - | ----- | -
|                                                 |  | New Company           |       |   | Reorganized Predecessor Company |  
|                                                 |  | 2005 First Six Months |       |   | 2004 First Six Months           |  
|Cash flows from investing activities:            |  |                       |       |   |                                 |   |       |  
|Purchases of property and equipment              |  | $                     | (21.5 | ) |                                 | $ | (21.4 | )
|Proceeds from the sale of property and equipment |  |                       | 1.5   |   |                                 |   | 3.4   |  
|Proceeds from sale of subsidiary                 |  |                       | 69.9  |   |                                 |   |      |  
|                                                 |  |                       |       |   |                                 |   |       |  
|Total                                            |  | $                     | 49.9  |   |                                 | $ | (18.0 | )
|                                                 |  |                       |       |   |                                 |   |       |  



33



---

##### Table of Contents

Net cash provided by investing activities was $49.9 million in the New Company 2005 First Six Months
compared with net cash used in investing activities of $17.9 million in the Reorganized Predecessor Company 2004 First Six Months. In the New Company 2005 First Six Months, we received proceeds of approximately $69.9 million related to the sale of
our bowling centers in the United Kingdom and $1.5 million related to the sale of property and equipment.



Financing



|                                         |  |                       |       |   |                                 |   |       |  
|---------------------------------------- |  | --------------------- | ----- | - | ------------------------------- | - | ----- | -
|                                         |  | New Company           |       |   | Reorganized Predecessor Company |  
|                                         |  | 2005 First Six Months |       |   | 2004 First Six Months           |  
|Cash flows from financing activities:    |  |                       |       |   |                                 |   |       |  
|Borrowings (repayments) of debt, net     |  | $                     | (47.1 | ) |                                 | $ | (28.4 | )
|Payments under capital lease obligations |  |                       | (0.2  | ) |                                 |   | (0.1  | )
|                                         |  |                       |       |   |                                 |   |       |  
|Total                                    |  | $                     | (47.3 | ) |                                 | $ | (28.5 | )
|                                         |  |                       |       |   |                                 |   |       |  



Net cash used in
financing activities was $47.3 million in the New Company 2005 First Six Months compared with $28.5 million in the Reorganized Predecessor Company 2004 First Six Months. In the New Company 2005 First Six Months, we made payments of approximately
$47.1 million on the Term Loan.



Capital Resources



The following table shows our debt balances at December 26, 2004 and June
27, 2004:



|                                     |  |                   |       |               |   |      
|------------------------------------ |  | ----------------- | ----- | ------------- | - | -----
|                                     |  | December 26, 2004 |       | June 27, 2004
|Term Loan                            |  | $                 | 87.9  |               | $ | 135.0
|Subordinated Notes, 10%, due 2010    |  |                   | 150.0 |               |   | 150.0
|Revolver                             |  |                   |      |               |   |     
|Mortgage note and capitalized leases |  |                   | 3.6   |               |   | 3.8  
|                                     |  |                   |       |               |   |      
|Total debt                           |  | $                 | 241.5 |               | $ | 288.8
|                                     |  |                   |       |               |   |      



In September 2004, we
entered into a First Amendment to Credit Agreement (the Amendment). The Amendment, among other things, requires us to prepay loans and/or cash collateralize or pay certain letter of credit obligations under the Credit Agreement in an
amount equal to 20% of the net cash proceeds from any sale, transfer or other disposition of the assets or stock of certain of our foreign subsidiaries. The Amendment also permits us to redeem, purchase, prepay, retire, defease or otherwise acquire
our 10% Senior Subordinated Notes due 2010 for cash consideration that does not exceed 80% of net cash proceeds from those sales of assets or stock of certain of our foreign subsidiaries within a specified period of time.



At December 26, 2004, there were no outstanding borrowings under the
Revolver. Outstanding standby letters of credit issued under the Revolver totaled $18.1 million leaving $21.9 million available for additional borrowings or letters of credit. The Revolver continues to be available for our working capital and
general corporate needs, subject to customary borrowing conditions.



In October 2004, we made a required repayment under our Credit Agreement of approximately $16.1 million due to the sale of our bowling center operations in the United Kingdom, property sales in Australia and a lease termination in France.
Additionally, in December 2004, we made a voluntary repayment under our Credit Agreement of approximately $30.0 million. These repayments were applied to the Term Loan. Under the Credit Agreement these non-scheduled repayments are applied ratably to
the remaining scheduled principal payments.



34



---

##### Table of Contents

Both the Credit Agreement and the Indenture contain certain restrictive covenants, including the
achievement of certain financial covenants and maximum levels of capital expenditures. We are in compliance with the covenants as of December 26, 2004. There can be no assurance that we will continue to be in compliance with the covenants.



Asset Sales



From time to time, we will sell real estate on which a bowling center is or
was operated, either in connection with the closing of a bowling center or in response to an attractive offer to buy the property.



The following table shows our asset sales for the reported periods:



|                |  |                       |     |                  |   |    
|--------------- |  | --------------------- | --- | ---------------- | - | ---
|                |  | 2005 First Six Months
|                |  | Proceeds              |     | Gain/(loss), net
|U.S. Centers:   |  |                       |     |                  |   |    
|Excess property |  | $                     | 1.5 |                  | $ | 0.5
|                |  |                       |     |                  |   |    



On September 30, 2004,
we sold 33 bowling centers in the United Kingdom for gross cash proceeds of approximately $71.2 million and exited bowling center operations in that country.



On February 8, 2005, we sold our 42 operating bowling centers in Australia for approximately $47.8 million, subject to certain post-closing adjustments
and exited bowling center operations in that country.



Capital
Expenditures



|          |  |                      |      |                               |   |     
|--------- |  | -------------------- | ---- | ----------------------------- | - | ----
|          |  | NewCompany           |      | ReorganizedPredecessorCompany
|          |  | 2005 FirstSix Months |      | 2004 FirstSix Months         
|Centers   |  | $                    | 18.8 |                               | $ | 19.7
|Products  |  |                      | 1.5  |                               |   | 0.6 
|Corporate |  |                      | 1.2  |                               |   | 1.1 
|          |  |                      |      |                               |   |     
|Total     |  | $                    | 21.5 |                               | $ | 21.4
|          |  |                      |      |                               |   |     



Capital expenditures
increased $0.1 million in the New Company 2005 First Six Months compared with the Reorganized Predecessor Company 2004 First Six Months primarily due to increased Products expenditures. Capital expenditures are primarily funded from cash generated
from operations.



Seasonality and Market Development Cycles



Centers business is seasonal, primarily due to the bowling league season
that begins in late summer and ends in mid spring. Cash flow from operations typically peaks in the winter and is lower in the summer.



Products sales are also seasonal, most notably in Modernization and Consumer Products sales in the U.S. While U.S. bowling center operators purchase spare
parts, supplies and consumer products throughout the year, they often place larger orders during the late spring and early summer in preparation for the start of league play in the late summer. Summer is also generally the peak period for
installation of modernization equipment in the U.S. Operators in the U.S. typically sign purchase orders for modernization equipment during the spring, which is then shipped and installed during the summer when U.S. bowling centers generally have
fewer bowlers. Management does not expect the sale of our bowling center operations in Australia and the United Kingdom to materially impact the historical seasonality of our business.



35



---

##### Table of Contents

International Operations



Our international operations are subject to the usual risks inherent in operating internationally, including, but not limited to, currency exchange
rate fluctuations, economic and political instability, other disruption of markets, restrictive laws, tariffs and other 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 for products, the risk of nationalization, the laws and policies of the U.S. affecting trade, international investment
and loans, and foreign tax law changes. As is the case of other U.S.-based manufacturers with export sales, local currency devaluation increases the cost of Products bowling equipment. In addition, local currency devaluation negatively impacts the
translation of operating results from our international operations.



Foreign currency exchange rates also impact the translation of operating results from international bowling centers and Products. International bowling centers represented 3.6% and 4.0% of consolidated revenue for the New Company 2005 First
Six Months and the Reorganized Predecessor Company 2004 First Six Months, respectively. For the New Company 2005 First Six Months, international bowling centers represented $1.8 million of the $13.8 million consolidated operating loss and $0.9
million of the $14.0 million consolidated operating income in the Reorganized Predecessor Company 2004 First Six Months. There will be less foreign currency exchange rate impact to our Centers business as a result of the sale of our Australian and
United Kingdom bowling center operations.



Products
international operations represented 10.8% and 11.1% of consolidated revenue for the New Company 2005 First Six Months and the Reorganized Predecessor Company 2004 First Six Months, respectively. For the New Company 2005 First Six Months Products
international operations represented $2.1 million in operating income of the $13.8 million consolidated operating loss and in the Reorganized Predecessor Company 2004 First Six Months Products international operations represented $1.4 million in
operating loss of the $14.0 million consolidated operating income.



Impact
of Inflation



We historically offset the impact of
inflation through price increases. Periods of high inflation could have a material adverse impact on us to the extent that increased borrowing costs for floating rate debt may not be offset by increases in cash flow. There was no significant impact
on our operations as a result of inflation during the New Company 2005 Second Quarter, New Company 2005 First Six Months, Reorganized Predecessor Company 2004 Second Quarter or Reorganized Predecessor Company 2004 First Six Months.



Critical Accounting Policies



In preparing the consolidated financial statements, GAAP requires management
to select and apply accounting policies that involve estimates and judgment. The following accounting policies may require a higher degree of judgment or involve amounts that could have a material impact on the consolidated financial statements. The
critical accounting policies disclosed below have been reviewed with the Audit Committee of our parent company.



Allowance for Doubtful Accounts



Products maintains an allowance for doubtful accounts for estimated losses resulting from the failure of customers to make payment. Management determines
the allowance based upon an evaluation of individual accounts, aging of the portfolio, issues raised by customers that may suggest non payment, historical experience and/or the current economic environment. A substantial portion of the allowance
relates to the sale of New Center Packages to international customers. If the financial condition of individual customers or countries in which Products operates or the general worldwide economy were to vary materially from the assumptions made by
management, the allowance may require adjustment in the future. Products evaluates the adequacy of the allowance on a regular basis, modifying, as necessary, its assumptions, updating its record of historical experience and adjusting reserves as
appropriate.



36



---

##### Table of Contents

Impairment of Long-Lived Assets



We assess the impairment of long-lived assets when events or changes in circumstances indicate that the carrying value of
the assets or the asset group may not be recoverable. Factors that are considered in deciding when to perform an impairment review include significant under-performance of a center or product line in relation to expectations, significant negative
industry or economic trends, and significant changes or planned changes in the use of the assets. As a result, we have closed certain individual center locations with some regularity. Recoverability of assets that will continue to be used in
operations is measured by comparing the carrying amount of the asset to the related total future net cash flows. If an assets carrying value is not recoverable through those cash flows, the asset is considered to be impaired. The impairment is
measured by the difference between the assets carrying amount and its fair value, based on the best information available, including market prices or a discounted cash flow analysis.



Inventory Obsolescence



As we monitor working capital (defined as current assets minus current liabilities), net inventory represents approximately
37% of our current assets (excluding discontinued operations). Products evaluates the levels, composition and salability of its inventory on a regular basis. The evaluations include assumptions regarding potential sales of such inventory, estimated
time periods over which such sales might take place and assessment of the potential usability of such inventory in future production. Products modifies, as necessary, its assumptions, updates its record of historical experience and adjusts its
reserves as appropriate.



Equipment Warranties



Warranty expense is an indicator of product quality and handling. Products
sells capital equipment where warranty and after sale service are very important to the customer. Products generally warrants all new products for one year and maintains an estimated reserve for future warranty obligations. The reserve is determined
based on prior warranty experience. If future warranty experience were to vary materially, management would review the reserve and make any appropriate adjustment. Products evaluates the adequacy of the reserve on a regular basis, modifying as
necessary, its assumptions, updating its record of historical experience and adjusting its reserves as appropriate.



Self Insurance, Litigation and Claims



We self-insure certain risks up to established limits, including general and product liability exposures, workers compensation, health care coverage, and
property damage. Other risks, such as litigation and claims relating to contractual disputes and employment issues, may not be covered by insurance. The reserves related to such self-insurance programs and to such other risks are determined based on
estimates of future settlements and costs of known and anticipated claims as well as on forces impacting the current economic environment. In the case of matters in litigation or involving threatened litigation, legal advice on our potential
liability and the potential for the award of damages is considered in making any estimate. We maintain systems to track and monitor these risks. If actual results were to vary materially from the assumptions, management would review the reserve and
make any appropriate adjustment. We evaluate the adequacy of these reserves on a regular basis, modifying, as necessary, our assumptions, updating our records of historical experience and adjusting reserves as appropriate.



Deferred Tax Assets



Management periodically reviews our gross deferred tax assets to determine if it is more likely than not that such assets
will be realized. Such periodic reviews include, among other things, the nature and amount of the tax income and expense items, the expected timing when certain assets will be used or liabilities will be required to be reported, available tax
planning strategies, and the reliability of profitability projections of businesses expected to provide future earnings. If after conducting such a review, management determines that the realization of the tax asset does not meet the more
likely than not criteria of Statement of Financial Accounting Standards No.109, Accounting for Income Taxes, an offsetting valuation allowance is recorded, thereby reducing net earnings and the deferred tax asset in that period.
Due to our historical and expected future earnings from operations, management concluded that we more likely than not will not realize the benefit of a majority of our deferred tax assets. If expectations for future performance, the
timing of deductibility of expenses, or tax statutes change in the future, we could decide to adjust the valuation allowance, which may increase or decrease income tax expense.



37



---

##### Table of Contents

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS



Certain matters discussed in this report contain forward-looking statements, which are statements other than historical
information or statements of current condition. Statements set forth in this report or statements incorporated by reference from documents filed with the Securities and Exchange Commission are or may be forward-looking statements, including possible
or assumed future results of our operations, including but not limited to:



| |  |  | any statements concerning:
| | - |  | --------------------------



| |  |  | the results of operations of our businesses;
| | - |  | --------------------------------------------



| |  |  | the results of our initiatives to improve our bowling centers operations and our business of manufacturing and selling bowling equipment;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amounts of capital expenditures needed to maintain or improve our bowling centers;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | our ability to comply with the financial covenants in our financing facilities and generate cash flow to service our indebtedness;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | the continued availability of sufficient borrowing capacity or other financing to supplement cash flow and fund operations; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | the outcome of existing or future litigation;
| | - |  | ---------------------------------------------



| |  |  | any statements preceded by, followed by or including the words believes, expects, predicts, anticipates, intends,
estimates, should, may or similar expressions; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | other statements contained or incorporated in this report that are not historical facts.
| | - |  | ----------------------------------------------------------------------------------------



These forward-looking statements relate to our plans and objectives or future operations. In light of the risks and
uncertainties inherent in all future projections and our financial position, the inclusion of forward-looking statements in this report should not be regarded as a representation by us that the objectives, projections or plans will be achieved. Many
factors could cause our actual results to differ materially from those in any forward-looking statements, including, but not limited to:



| |  |  | the popularity of bowling;
| | - |  | --------------------------



| |  |  | our ability to renew real estate leases;
| | - |  | ----------------------------------------



| |  |  | risks related to our foreign operations;
| | - |  | ----------------------------------------



| |  |  | our ability to retain and attract key employees;
| | - |  | ------------------------------------------------



| |  |  | our ability to successfully implement our business initiatives;
| | - |  | ---------------------------------------------------------------



| |  |  | our ability to generate the cash flow required to service our indebtedness and real estate leases;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | the continued decline in lineage and our difficulty in increasing lineage;
| | - |  | --------------------------------------------------------------------------



| |  |  | the seasonality and effect of unusual weather on bowling center operations;
| | - |  | ---------------------------------------------------------------------------



38



---

##### Table of Contents

| |  |  | the continued price pressure from the growth of lower cost, lower quality bowling products and readily available, low cost used equipment;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the potential adverse impact from changes in governmental regulations;
| | - |  | ----------------------------------------------------------------------



| |  |  | the impact of environmental laws and regulations relating to hazardous materials used in or resulting from our operations;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | the impact of anti-smoking legislation on bowling center operations;
| | - |  | --------------------------------------------------------------------



| |  |  | the interests of controlling shareholders may conflict with the interests of holders of indebtedness;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | competition from other leisure activities with our bowling center business;
| | - |  | ---------------------------------------------------------------------------



| |  |  | fluctuations in foreign currency exchange rates;
| | - |  | ------------------------------------------------



| |  |  | the impact of potential retaliatory duties imposed on our products business by other countries;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | the effect of our prior bankruptcy;
| | - |  | -----------------------------------



| |  |  | the lack of improvement or a decline in general economic conditions;
| | - |  | --------------------------------------------------------------------



| |  |  | adverse judgments in existing, pending or future litigation; and
| | - |  | ----------------------------------------------------------------



| |  |  | changes in interest rates.
| | - |  | --------------------------



The foregoing review should not be construed as exhaustive and should be read in conjunction with other cautionary statements included elsewhere in this
report. We undertake no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events.



39



---

##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



We are exposed to market risk from changes in foreign currency exchange rates and interest rates that could impact our results of operations and financial
condition. We manage our exposure to these risks through normal operating and financing activities and through the use of interest rate cap agreements and foreign currency forward exchange contracts. At December 26, 2004, no interest rate cap
agreements were outstanding and one foreign currency forward exchange contract was outstanding. Management periodically reviews its exposure to changes in interest rates and may enter into an interest rate cap agreement as it deems appropriate.



As with other U.S.-based exporters, local currency
devaluations increase the cost of our bowling equipment in that market. As a result, a strengthening U.S. dollar exchange rate may adversely impact sales volume and profit margins. Foreign currency exchange rates also impact the translation of
operating results from the international bowling centers.



From
time to time we use interest rate cap agreements to mitigate the effect of changes in interest rates on variable rate borrowings under the Credit Agreement. While we are exposed to credit risk in the event of non-performance by the counterparties to
the interest rate swap agreements, in all cases such counterparties are highly-rated financial institutions and we do not anticipate non-performance. We do not hold or issue derivative financial instruments for trading purposes.



At December 26, 2004, we had one forward exchange contract outstanding
serving as a hedge of the purchase price of our Australian bowling center operations in the notional amount of approximately $33.3 million. The fair value of the foreign currency derivative contract outstanding at December 26, 2004 was $1.3 million
resulting in a loss of the same amount.



The following table
provides information about our fixed and variable-rate debt at December 26, 2004, weighted average interest rates and respective maturity dates.



|                 |  |                |       |                              |       |   |                   |   |                              |  |      |  
|---------------- |  | -------------- | ----- | ---------------------------- | ----- | - | ----------------- | - | ---------------------------- |  | ---- | -
|Maturity Date    |  | FixedRate Debt |       | WeightedAverageInterest Rate |       |   | VariableRate Debt |   | WeightedAverageInterest Rate | 
|December 1, 2010 |  | $              | 150.0 |                              | 10.00 | % |                   |   |                             |  |     |  
|August 27, 2009  |  |                |      |                              |      |   |                   | $ | 87.9                         |  | 5.09 | %
|                 |  |                |       |                              |       |   |                   |   |                              |  |      |  



The fair value of the
Term Loan and the Subordinated Notes at December 26, 2004 was approximately $87.9 million and $159.8 million, respectively.





40



---

##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES



As of the end of the period covered by this report, we performed an evaluation under the supervision and with the participation of our management including the chief executive officer and the chief financial officer, of the effectiveness of
our disclosure controls and procedures. Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective. There have been no changes in
internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



41



---

##### Table of Contents



PART II



ITEM 1. LEGAL PROCEEDINGS



We
currently and from time to time are subject to claims and actions arising in the ordinary course of our business, including general liability, workers compensation, employee compensation and environmental claims. 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 we are involved are not expected to have a material adverse impact on our financial position or results of
operations. In addition, we are a defendant in two actions alleging violations of federal legislation involving unsolicited communications. These actions were brought by plaintiffs who allegedly received unsolicited communications from us or from an
agent on our behalf. The plaintiffs in these actions seek statutory damages and have requested geographically-limited class certifications. In one of these actions, which was brought in Georgia state court, the court has approved a settlement of the
class action. It is not possible at this time to predict the outcome of the remaining action. From time to time, we resolve claims alleging similar violations in order to avoid litigation.



Regulatory Matters



State and local governments require bowling centers to hold permits to sell alcoholic beverages, and, although regulations
vary from state to state, once permits are issued, they generally remain in place indefinitely (except for routine renewals). There are no unique regulations applicable to bowling center operations or bowling equipment manufacturing. Currently, and
from time to time, we are subject to claims relating to the violations of such regulations.



Our operations are also 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.



Currently and from time to time, we are subject to environmental and other regulatory claims. In managements opinion, the various claims in respect
of which we are currently involved, is not likely to have a material adverse impact on our financial position or results of operations.



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



European Community Tariff



The Commission of the European Community increased tariffs last year on
certain U.S. exports to the countries comprising the European Community (the EC) in response to benefits for U.S. exporters under the U.S. Foreign Sales Corporation/Extraterritorial Income Exclusion tax regimes, which were declared in
violation of U.S. obligations by the World Trade Organization (the WTO). A substantial portion of our bowling products imported into the EC was subject to the additional duty. The additional duty was 5% ad valorem in March 2004 and
increased 1% each month thereafter up to a maximum of 14%. The U.S. Congress recently enacted legislation which was intended to address the issues raised by the EC. The EC has agreed to repeal temporarily the additional duty retroactive to January
1, 2005 until the WTO determines that the U.S. legislation adequately responded to global trade rules. There can be no assurance that the WTO will make a favorable determination.



42



---

##### Table of Contents

|ITEM |  | 6. EXHIBITS
|---- |  | -----------



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Amended and Restated Certificate of Incorporation of AMF Bowling Worldwide, Inc. (incorporated herein by reference to the Companys Current Report on Form 8-K dated March 8, 2002 (File
No. 001-12131)).                                                                                                                                                                                                                                                                                                                  
|     | 
|3.2  |  | Amended and Restated By-Laws of AMF Bowling Worldwide, Inc. (incorporated herein by reference to the Companys Current Report on Form 8-K dated March 8, 2002 (File No.
001-12131)).                                                                                                                                                                                                                                                                                                                                       
|     | 
|4.1  |  | Supplemental Indenture, dated September 28, 2004, by and among AMF Bowling Worldwide, Inc., certain subsidiaries of AMF Bowling Worldwide, Inc., as Guarantors, and Wilmington Trust Company,
as Trustee, with respect to the 10% Senior Subordinated Notes due 2010 (incorporated herein by reference to the Companys Amendment No. 1 to Registration Statement on Form S-4, filed with the Securities and Exchange Commission on October 6,
2004 (File No. 333-117668-12)).                                             
|     | 
|4.2  |  | Joinder to Registration Rights Agreement, dated September 28, 2004, by and among AMF Bowling Worldwide, Inc., certain subsidiaries of AMF Bowling Worldwide, Inc., as Guarantors, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse First Boston, acting through its Cayman Islands Branch (incorporated herein by reference to the Companys Amendment No. 1 to Registration Statement on Form S-4, filed with the
Securities and Exchange Commission on October 6, 2004 (File No. 333-117688-12)).
|     | 
|10.1 |  | First Amendment to Credit Agreement dated as of September 20, 2004 among Kingpin Intermediate Corp., the Company, the Lenders signatory thereto and Credit Suisse First Boston, Cayman Islands
Branch, as Administrative Agent, amending that certain Credit Agreement dated as of February 27, 2004 (incorporated herein by reference to the Companys Amendment No. 1 to Registration Statement on Form S-4, filed with the Securities and
Exchange Commission on October 6, 2004 (File No. 333-117668-12)).             
|     | 
|10.2 |  | Employment Letter, dated as of October 27, 2004, between AMF Bowling Worldwide, Inc. and Anthony J. Ponsiglione II (incorporated herein by reference to the Companys Quarterly Report on
Form 10-Q for the quarterly period ended September 26, 2004 (File No. 001-12131)).*                                                                                                                                                                                                                                              
|     | 
|10.3 |  | Kingpin Holdings, LLC 2004 Unit Option Plan dated as of September 27, 2004 (filed herewith).*                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | 
|12.1 |  | Statement re: Computation of Ratios (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     | 
|31.1 |  | Certification by the Companys Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                        
|     | 
|31.2 |  | Certification by the Companys Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 (filed herewith).                                                                                                                                                                                                                                                                                                        
|     | 
|32.1 |  | Certification by the Companys Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).                                                                                                                                                                                                                                                                                                                                          
|     | 
|32.2 |  | Certification by the Companys Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed
herewith).                                                                                                                                                                                                                                                                                                                                          

---

|* | Management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------



43



---

##### Table of Contents



SIGNATURES

|
|



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



|                                                                            |  |                 
|--------------------------------------------------------------------------- |  | ----------------
|AMF Bowling Worldwide, Inc.                                                 |  |                 
|(registrant)                                                                |  |                 
|                                                                            | 
|/s/ Christopher F. Caesar                                                   |  | February 9, 2005
|Christopher F. Caesar                                                       |  |                 
|Senior Vice President, Chief Financial Officer and Treasurer                |  |                 
|(Duly authorized officer of the registrant and principal financial officer) |  |                 





44