##### 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 31, 2006

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.)

7313 Bell Creek Road

Mechanicsville, 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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated
filer ̈Accelerated Filer ̈Non-accelerated filer  x

Indicate by
check mark whether the registrant is a shell company (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 31, 2006, 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 CON
TENTS

PART I



|           |  |                                                                                       |  |     
|---------- |  | ------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                       |  | Page
|Item 1.    |  | Financial Statements                                                                  |  |     
|           |  |                                                                                      
|           |  | Condensed Consolidated Balance Sheets (unaudited)                                     |  | 3   
|           |  |                                                                                      
|           |  | Condensed Consolidated Statements of Operations (unaudited)                           |  | 4   
|           |  |                                                                                      
|           |  | Condensed Consolidated Statements of Cash Flows (unaudited)                           |  | 5   
|           |  |                                                                                      
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                      |  | 6   
|           |  |                                                                                      
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 27  
|           |  |                                                                                      
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 38  
|           |  |                                                                                      
|Item 4.    |  | Controls and Procedures                                                               |  | 39  
|          
|PART II   
|           |  |                                                                                      
|Item 1.    |  | Legal Proceedings                                                                     |  | 39  
|           |  |                                                                                      
|Item 1A.   |  | Risk Factors                                                                          |  | 39  
|           |  |                                                                                      
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 40  
|           |  |                                                                                      
|Item 3     |  | Defaults Upon Senior Securities                                                       |  | 40  
|           |  |                                                                                      
|Item 4.    |  | Other Information                                                                     |  | 40  
|           |  |                                                                                      
|Item 5.    |  | Risk Factors                                                                          |  | 40  
|           |  |                                                                                      
|Item 6.    |  | Exhibits                                                                              |  | 40  
|           | 
|Signatures |  | 41                                                                                   



2



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

PART I



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------



|                                                                                                     |  |                  |         |   |             |   |         |  
|---------------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ----------- | - | ------- | -
|(In thousands, except share data)                                                                    |  | December 31,2006 |         |   | July 2,2006 |  
|Assets                                                                                               |  |                  |         |   |             |   |         |  
|Current assets:                                                                                      |  |                  |         |   |             |   |         |  
|Cash and cash equivalents                                                                            |  | $                | 24,668  |   |             | $ | 57,475  |  
|Accounts and notes receivable, net of allowance for doubtful accounts of $116 and $203, respectively |  |                  | 3,994   |   |             |   | 5,332   |  
|Inventories, net                                                                                     |  |                  | 4,759   |   |             |   | 4,709   |  
|Prepaid expenses and other current assets                                                            |  |                  | 8,595   |   |             |   | 10,091  |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total current assets                                                                                 |  |                  | 42,016  |   |             |   | 77,607  |  
|                                                                                                     |  |                 
|Property and equipment, net                                                                          |  |                  | 229,411 |   |             |   | 228,865 |  
|Investment in equity affiliate                                                                       |  |                  | 22,800  |   |             |   | 31,104  |  
|Other assets                                                                                         |  |                  | 14,241  |   |             |   | 19,376  |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total assets                                                                                         |  | $                | 308,468 |   |             | $ | 356,952 |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Liabilities and Stockholders Equity                                                                 |  |                  |         |   |             |   |         |  
|                                                                                                     |  |                 
|Current liabilities:                                                                                 |  |                  |         |   |             |   |         |  
|Accounts payable                                                                                     |  | $                | 8,416   |   |             | $ | 8,873   |  
|Accrued expenses and other liabilities                                                               |  |                  | 50,923  |   |             |   | 51,921  |  
|Current portion of long-term debt                                                                    |  |                  | 486     |   |             |   | 794     |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total current liabilities                                                                            |  |                  | 59,825  |   |             |   | 61,588  |  
|                                                                                                     |  |                 
|Long-term debt, less current portion                                                                 |  |                  | 172,689 |   |             |   | 202,708 |  
|Liabilities, subject to resolution                                                                   |  |                  | 103     |   |             |   | 103     |  
|Other liabilities                                                                                    |  |                  | 10,772  |   |             |   | 10,024  |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total liabilities                                                                                    |  |                  | 243,389 |   |             |   | 274,423 |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Commitments and contingencies                                                                        |  |                  |         |   |             |   |         |  
|                                                                                                     |  |                 
|Stockholders equity:                                                                                |  |                  |         |   |             |   |         |  
|Common stock ($0.01 par value, 1,000 shares authorized and outstanding)                              |  |                  |        |   |             |   |        |  
|Paid-in capital                                                                                      |  |                  | 133,785 |   |             |   | 133,716 |  
|Accumulated deficit                                                                                  |  |                  | (62,059 | ) |             |   | (45,575 | )
|Accumulated other comprehensive loss                                                                 |  |                  | (6,647  | ) |             |   | (5,612  | )
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total stockholders equity                                                                           |  |                  | 65,079  |   |             |   | 82,529  |  
|                                                                                                     |  |                  |         |   |             |   |         |  
|Total liabilities and stockholders equity                                                           |  | $                | 308,468 |   |             | $ | 356,952 |  
|                                                                                                     |  |                  |         |   |             |   |         |  

See accompanying notes to consolidated financial statements.



3



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)



|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|------------------------------------------------------------ |  | ------------------ | ------- | - | ------------------ | - | ------- | -------------- |  | - | -------------- | - |  | - | ------- | -
|(In thousands)                                               |  | 2007 SecondQuarter |         |   | 2006 SecondQuarter |   |         | 2007 SixMonths |  |   | 2006 SixMonths |  
|Operating revenue                                            |  | $                  | 128,038 |   |                    | $ | 127,018 |                |  | $ | 230,566        |   |  | $ | 249,761 |  
|                                                             |  |                    |         |  
|Operating expenses:                                          |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Cost of goods sold                                           |  |                    | 11,168  |   |                    |   | 15,810  |                |  |   | 20,115         |   |  |   | 47,219  |  
|Bowling center operating expenses                            |  |                    | 83,633  |   |                    |   | 81,063  |                |  |   | 165,692        |   |  |   | 160,172 |  
|Selling, general and administrative expenses                 |  |                    | 9,903   |   |                    |   | 10,082  |                |  |   | 19,937         |   |  |   | 27,323  |  
|Asset impairment                                             |  |                    |        |   |                    |   | 163     |                |  |   |               |   |  |   | 606     |  
|Depreciation and amortization                                |  |                    | 9,516   |   |                    |   | 9,788   |                |  |   | 21,389         |   |  |   | 20,140  |  
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Total operating expenses                                     |  |                    | 114,220 |   |                    |   | 116,906 |                |  |   | 227,133        |   |  |   | 255,460 |  
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|                                                             |  |                    |         |  
|Operating income (loss)                                      |  |                    | 13,818  |   |                    |   | 10,112  |                |  |   | 3,433          |   |  |   | (5,699  | )
|                                                             |  |                    |         |  
|Non-operating (income) expenses:                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Interest expense                                             |  |                    | 5,339   |   |                    |   | 5,557   |                |  |   | 11,156         |   |  |   | 11,058  |  
|Interest income                                              |  |                    | (334    | ) |                    |   | (261    | )              |  |   | (934           | ) |  |   | (587    | )
|Loss on extinguishment of debt                               |  |                    | 1,907   |   |                    |   |        |                |  |   | 1,907          |   |  |   |        |  
|Loss from equity affiliate                                   |  |                    | 406     |   |                    |   |        |                |  |   | 2,481          |   |  |   |        |  
|Impairment of equity method investment                       |  |                    | 4,587   |   |                    |   |        |                |  |   | 4,587          |   |  |   |        |  
|Other (income) expense, net                                  |  |                    | 59      |   |                    |   | (870    | )              |  |   | 69             |   |  |   | (674    | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Total non-operating expenses                                 |  |                    | 11,964  |   |                    |   | 4,426   |                |  |   | 19,266         |   |  |   | 9,797   |  
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|                                                             |  |                    |         |  
|Income (loss) from continuing operations before income taxes |  |                    | 1,854   |   |                    |   | 5,686   |                |  |   | (15,833        | ) |  |   | (15,496 | )
|Provision (benefit) for income taxes                         |  |                    | 1,063   |   |                    |   | (74     | )              |  |   | 121            |   |  |   | (664    | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Income (loss) from continuing operations                     |  |                    | 791     |   |                    |   | 5,760   |                |  |   | (15,954        | ) |  |   | (14,832 | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|                                                             |  |                    |         |  
|Discontinued operations:                                     |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Income (loss) from discontinued operations, net of tax       |  |                    | (128    | ) |                    |   | 81      |                |  |   | (128           | ) |  |   | 144     |  
|Loss on disposal, net of tax                                 |  |                    | (402    | ) |                    |   | (1,319  | )              |  |   | (402           | ) |  |   | (1,319  | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|Loss from discontinued operations                            |  |                    | (530    | ) |                    |   | (1,238  | )              |  |   | (530           | ) |  |   | (1,175  | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  
|                                                             |  |                    |         |  
|Net income (loss)                                            |  | $                  | 261     |   |                    | $ | 4,522   |                |  | $ | (16,484        | ) |  | $ | (16,007 | )
|                                                             |  |                    |         |   |                    |   |         |                |  |   |                |   |  |   |         |  

See accompanying notes to consolidated financial statements.



4



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|                                                                                                                  |  |                 |         |   |                 |   |         |  
|----------------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | - | --------------- | - | ------- | -
|(In thousands)                                                                                                    |  | 2007 Six Months |         |   | 2006 Six Months |  
|                                                                                                                  | 
|Operating activities:                                                                                             |  |                 |         |   |                 |   |         |  
|Net loss                                                                                                          |  | $               | (16,484 | ) |                 | $ | (16,007 | )
|Less: Loss from discontinued operations                                                                           |  |                 | (530    | ) |                 |   | (1,175  | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Loss from continuing operations                                                                                   |  |                 | (15,954 | ) |                 |   | (14,832 | )
|                                                                                                                  |  |                
|Adjustments to reconcile loss from continuing operations to net cash provided by (used in) continuing operations: |  |                 |         |   |                 |   |         |  
|Depreciation and amortization                                                                                     |  |                 | 21,389  |   |                 |   | 20,140  |  
|Asset impairment                                                                                                  |  |                 |        |   |                 |   | 606     |  
|Loss on extinguishment of debt                                                                                    |  |                 | 1,907   |   |                 |   |        |  
|Gain on the sale of property and equipment, net                                                                   |  |                 | (90     | ) |                 |   | (394    | )
|Loss from equity affiliate                                                                                        |  |                 | 2,481   |   |                 |   |        |  
|Impairment of equity method investment                                                                            |  |                 | 4,587   |   |                 |   |        |  
|Stock compensation expense                                                                                        |  |                 | 69      |   |                 |   |        |  
|Changes in assets and liabilities:                                                                                |  |                 |         |   |                 |   |         |  
|Accounts and notes receivable, net                                                                                |  |                 | 1,724   |   |                 |   | (1,019  | )
|Inventories                                                                                                       |  |                 | (50     | ) |                 |   | (5,269  | )
|Other assets                                                                                                      |  |                 | 2,432   |   |                 |   | (434    | )
|Accounts payable and accrued expenses                                                                             |  |                 | 336     |   |                 |   | 1,906   |  
|Income taxes payable                                                                                              |  |                 | (184    | ) |                 |   | (3,620  | )
|Other long-term liabilities                                                                                       |  |                 | 96      |   |                 |   | (602    | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Net cash provided by (used in) operating activities from continuing operations                                    |  |                 | 18,743  |   |                 |   | (3,518  | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Investing activities:                                                                                             |  |                 |         |   |                 |   |         |  
|Purchases of property and equipment                                                                               |  |                 | (24,898 | ) |                 |   | (30,615 | )
|Return of cash from equity affiliate                                                                              |  |                 |        |   |                 |   | 17,531  |  
|Proceeds from sale of property and equipment                                                                      |  |                 | 3,596   |   |                 |   | 7,616   |  
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Net cash used in investing activities from continuing operations                                                  |  |                 | (21,302 | ) |                 |   | (5,468  | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Financing activities:                                                                                             |  |                 |         |   |                 |   |         |  
|Payments of long-term debt                                                                                        |  |                 | (30,327 | ) |                 |   | (554    | )
|Payments under capital lease obligations                                                                          |  |                 |        |   |                 |   | (141    | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Net cash used in financing activities from continuing operations                                                  |  |                 | (30,327 | ) |                 |   | (695    | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Effect of exchange rates on cash                                                                                  |  |                 | 79      |   |                 |   | (604    | )
|Net cash used in operating activities from discontinued operations                                                |  |                 |        |   |                 |   | (498    | )
|Net cash used in investing activities from discontinued operations                                                |  |                 |        |   |                 |   | (149    | )
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Net decrease in cash and cash equivalents                                                                         |  |                 | (32,807 | ) |                 |   | (10,932 | )
|Cash and cash equivalents at beginning of period                                                                  |  |                 | 57,475  |   |                 |   | 45,254  |  
|                                                                                                                  |  |                 |         |   |                 |   |         |  
|Cash and cash equivalents at end of period                                                                        |  | $               | 24,668  |   |                 | $ | 34,322  |  
|                                                                                                                  |  |                 |         |   |                 |   |         |  

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



5



---

##### 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 (Worldwide), and its subsidiaries (Worldwide and our subsidiaries may be referred to as the Company, AMF, we, us, or our) are engaged in the business of operating bowling centers and hold
an interest in a business that manufactures and sells bowling equipment. Since October 8, 2005, the Company has two reportable business segments:



| |  |  | the operation of bowling centers (Centers); and
| | - |  | -------------------------------------------------



| |  |  | Holdings, which consists of our investment in the Joint Venture (defined below) and a company that provides technical services exclusively to the Joint
Venture.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

For periods prior to October 8, 2005, AMF was engaged in two business segments:



| |  |  | 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).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Centers
operations and operating assets are held in subsidiaries of Worldwide.

AMF is the largest operator of bowling centers in the world with
358 centers in operation as of December 31, 2006, and is comprised of 345 centers in the U.S. and 13 bowling centers operating outside the U.S. We have operated our bowling centers under the AMF brand for a number of years. We have
recently developed a new brand of centers (300 Centers), which offer a new entertainment concept with lounge seating in the bowlers area, enhanced food and beverage offerings and customer service for individuals and group events.
We have identified six centers to remodel, upgrade and operate as 300 Centers, five of which have been completed and re-opened. We are monitoring results and exploring other opportunities to expand the number of 300 Centers. The results of the 300
Centers are not material to the Centers business segment.

AMF was also one of the largest manufacturers of bowling equipment in the world.
We conducted our business of manufacturing and selling bowling equipment through our Products subsidiaries until October 7, 2005. Until such date, we reported Products as a segment of our business. On October 7, 2005, we entered into the
Joint Venture with Italian-based Qubica, S.p.A. (Qubica), and contributed this business in exchange for a 50% equity interest.

On December 4, 2005, we sold our billiards division for gross cash proceeds of approximately $4.5 million subject to certain post-closing adjustments. Billiards manufactured and sold billiard tables and accessories. The results of
operations for the billiards division have been reported as discontinued operations for all periods presented and are included within our former Products segment.



6



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Joint Venture

On October 7, 2005, we completed transactions to form the joint venture with the shareholder of Qubica. In these transactions, AMF Holdings, Inc. (AMF Holdings), a subsidiary of Worldwide, contributed
the equity of QubicaAMF Worldwide, LLC, formerly known as AMF Bowling Products, LLC (AMF Products), and substantially all of the other subsidiaries that conducted our Products business to QubicaAMF Worldwide, S.à.R.L. (the
Joint Venture), in exchange for a 50% equity interest in the Joint Venture. The shareholder of Qubica also contributed the equity of Qubica and its subsidiaries to the Joint Venture in exchange for a 50% equity interest in the Joint
Venture. The board of managers of the Joint Venture has six members split equally between AMF Holdings and the shareholder of Qubica.

AMF
Bowling Products UK Limited (UK BPO), a company organized under the laws of the United Kingdom, was a subsidiary of our Products business and was not contributed to the Joint Venture. UK BPO is now owned by AMF Holdings. UK BPO provides
technical services exclusively to the Joint Venture under a services agreement. The Joint Venture provides administrative services, such as accounting and financial services, to UK BPO.

In creating the Joint Venture, Worldwide and certain of its non-Products subsidiaries entered into various agreements with the Joint Venture and its
subsidiaries. These agreements include, but are not limited to, a supply agreement between Centers and the Joint Venture that requires the purchase of bowling products and supplies from the Joint Venture at prices charged and volumes similar to
those in the past, a trademark license agreement between Worldwide and the Joint Venture, AMF Products and Qubica, that allows them to use the AMF mark and certain related marks, and various administrative services and similar agreements that
provide for leasing space in certain facilities and support services from and to the Company and the Joint Venture. Management believes these agreements reflect commercial terms.

The Joint Venture and certain of its subsidiaries entered into a credit agreement for a $30.0 million revolving credit facility. Certain assets of the
Joint Venture and certain of its subsidiaries secure the Joint Venture credit agreement. Worldwide and its remaining subsidiaries have no obligation under the Joint Ventures credit agreement. Neither Worldwide nor AMF Holdings has any
obligation to contribute capital or make loans to the Joint Venture. AMF Products is not a guarantor of our obligations under our senior secured credit agreement (the Credit Agreement) and our Subordinated Notes due in 2010 (the
Subordinated Notes).

Fiscal Year

We report on a retail calendar year, with each quarter comprised of one 5-week period and two 4-week periods. Fiscal years 2007 and 2006 have 52 weeks. Fiscal year 2006 ended on July 2, 2006 (Fiscal Year 2006). Second
quarters 2007 and 2006 ended on December 31, 2006 and January 1, 2006, respectively.

Accounting for the Joint Venture

Our investment in the Joint Venture is accounted for using the equity method of accounting. We receive financial information from the Joint Venture on a
delayed basis and therefore we record our share of the income or losses in our investment one quarter in arrears. For the six months ended December 31, 2006, we recorded losses from our investment of $2.5 million including amortization of the
basis difference between our investment and our share of the Joint Ventures underlying equity, elimination of intercompany interest and elimination of intercompany profit on purchases.

Our investment was recorded initially at cost and is adjusted for our equity share in net income (loss) and any cash
contributions and distributions. There have been no such cash transactions since the formation of the Joint Venture. At the time of formation, there was a difference between the carrying amount of this investment on our balance sheet and the
underlying equity in net assets of the Joint Venture of $11.3 million which is amortized as an adjustment to loss from equity affiliate over five years, the useful life of the underlying assets to which the basis difference is attributed. AMF
continues to purchase capital equipment and supplies from the Joint Venture, and eliminates its share of the intercompany profit. Total purchases from the Joint Venture for the six months ended December 31, 2006 were $13.5 million. Total
payables to the Joint Venture at December 31, 2006 were $0.3 million. The Joint Venture has a December 31styear end for financial reporting purposes.



7



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Selected financial results of the Joint Venture as of September 30, 2006 and for the periods July 1, 2006
to September 30, 2006 (Second Quarter) and April 1, 2006 to September are as follows:



|                        |  |   |         |  
|----------------------- |  | - | ------- | -
|Financial position:     |  |   |         |  
|Current assets          |  | $ | 68,891  |  
|Non-current assets      |  |   | 34,024  |  
|                        |  |   |         |  
|Total assets            |  |   | 102,915 |  
|                        |  |   |         |  
|Current liabilities     |  |   | 32,801  |  
|Non-current liabilities |  |   | 73,916  |  
|                        |  |   |         |  
|Total liabilities       |  |   | 106,717 |  
|                        |  |   |         |  
|Stockholders deficit   |  |   | (3,802  | )
|                        |  |   |         |  



|                       |  |                  |        |                 |   |       
|---------------------- |  | ---------------- | ------ | --------------- | - | ------
|                       |  | 2007 2nd Quarter |        | 2007 Six Months
|Results of operations: |  |                  |        |                 |   |       
|Revenue                |  | $                | 49,736 |                 | $ | 90,018
|Gross profit           |  |                  | 14,618 |                 |   | 26,000
|Net loss               |  |                  | 54     |                 |   | 4,512 

Based on a deterioration in the financial results of the Joint Venture during the 2007 Second
Quarter, the Company recorded an impairment charge related to our investment in the Joint Venture of $4,587 because we determined the impairment was other than temporary. The amount of the impairment was determined based on a third party valuation.

Merger

On February 27, 2004, we
were acquired in a merger transaction (the Merger) by a subsidiary of Kingpin Holdings LLC (Kingpin), a Delaware limited liability company formed at the direction of Code Hennessy & Simmons LLC, a Chicago-based
private equity firm (CHS) to effect the Merger. Kingpin Holdings is owned by a fund managed by CHS and other equity investors.

NOTE 2.
BASIS OF PRESENTATION

As permitted by the rules and regulations of the Securities and Exchange Commission, the accompanying unaudited
consolidated financial statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles
generally accepted in the United States (generally accepted accounting principles). 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
generally accepted accounting principles 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.



8



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Our 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 July 2, 2006. The following definitions are used in this report:



|                                                       |  |                      
|------------------------------------------------------ |  | ---------------------
|Period                                                 |  | Referred to as       
|Results from October 2, 2006 through December 31, 2006 |  | 2007 Second Quarter
|                                                       | 
|Results from October 3, 2005 through January 1, 2006   |  | 2006 Second Quarter
|                                                       | 
|Results from July 3, 2006 through December 31, 2006    |  | 2007 Six Months    
|                                                       | 
|Results from July 4, 2005 through January 1, 2006      |  | 2006 Six Months    
|                                                       | 
|Results from July 3, 2006 through July 1, 2007         |  | Fiscal Year 2007   
|                                                       | 
|Results from July 4, 2005 through July 2, 2006         |  | Fiscal Year 2006   

Certain amounts in the financial statements and supporting footnotes have been reclassified to
conform with current year presentation. In Fiscal Year 2006, the Company reclassified certain selling, general and administrative expenses from bowling center operating expenses to selling, general and administrative expenses. Reclassifications to
selling, general and administrative expenses in the 2006 Second Quarter and the 2006 Six Months were $6,883 and $13,717, respectively. During 2007 Second Quarter the Company reclassified the long-term portion of the self insurance reserves of $7,451
from accrued expenses to other long-term liabilities. Reclassifications to other long-term liabilities as of July 2, 2006 were $7,060.

The Company recognized additional depreciation expense of $2,018 in the 2007 First Quarter to correct a depreciation error primarily relating to Fiscal Year 2006. The Company also recognized a reduction in the bowling center operating
expenses of $696 in the 2007 First Quarter to correct errors in calculating insurance liabilities in prior years. The Company evaluated the errors, considering both the quantitative and qualitative aspects, and concluded that neither the errors
nor the effects of their corrections were material to the consolidated financial statements.

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.



9



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



NOTE 3. DISCONTINUED OPERATIONS

On December 4, 2005, we sold our billiards division for gross cash proceeds of approximately $4,500 subject to certain post-closing adjustments. In accordance with SFAS No. 144 Accounting for the
Impairment or Disposal of Long-lived Assets, the operations of the billiards division are reported separately as discontinued operations for all periods in which they are presented. Results for 2007 Second Quarter primarily related to
settlements related to the sale of our billiards division and our bowling center operations in Australia. Results for 2006 Second Quarter are primarily from our billiards division which was sold on December 4, 2005.

The financial results of our discontinued operations were as follows:



|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  
|---------------------------------------- |  | ------------------ | ---- | - | ------------------ | - | ------ | -------------- |  | - | -------------- | - |  | - | ------ | -
|                                         |  | 2007 SecondQuarter |      |   | 2006 SecondQuarter |   |        | 2007 SixMonths |  |   | 2006 SixMonths |  
|Revenue                                  |  | $                  |     |   |                    | $ | 2,246  |                |  | $ |               |   |  | $ | 4,830  |  
|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  
|                                         |  |                    |      |  
|Income (loss) from operations, pretax    |  |                    | (128 | ) |                    |   | 81     |                |  |   | (128           | ) |  |   | 144    |  
|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  
|Income (loss) from operations, after tax |  |                    | (128 | ) |                    |   | 81     |                |  |   | (128           | ) |  |   | 144    |  
|                                         |  |                    |      |  
|Loss on disposal, pretax                 |  |                    | (424 | ) |                    |   | (1,319 | )              |  |   | (424           | ) |  |   | (1,319 | )
|Benefit for income taxes                 |  |                    | (22  | ) |                    |   |       |                |  |   | (22            | ) |  |   |       |  
|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  
|Loss on disposal, after tax              |  |                    | (402 | ) |                    |   | (1,319 | )              |  |   | (402           | ) |  |   | (1,319 | )
|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  
|Loss from discontinued operations        |  | $                  | (530 | ) |                    | $ | (1,238 | )              |  | $ | (530           | ) |  | $ | (1,175 | )
|                                         |  |                    |      |   |                    |   |        |                |  |   |                |   |  |   |        |  



10



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



NOTE 4. STOCK-BASED COMPENSATION

On February 27, 2004, Kingpin granted 313,145 options to purchase common units of Kingpin, at an exercise price of $10.00 and 104,381 options to purchase common units at an exercise price of $20.00 per common
unit, to Frederick R. Hipp, President and Chief Executive Officer of Worldwide. These options have a 10 year contractual term and vest ratably over a four year period.

Effective September 27, 2004, Kingpin adopted the 2004 Unit Option Plan (the Option Plan). Under the Option Plan, grants to purchase common units may be made to any director, executive or other key
employee of, or any consultant or advisors to, Kingpin or Worldwide. The options are subject to customary terms and conditions, including provisions for the extinguishment of options upon the termination of employment. All stock options have 10-year
terms and vest ratably over 3 years from the date of grant. 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. As of December 31, 2006, there were 446,888 options outstanding under the Option Plan, of which 105,799 were vested and exercisable. As of December 31, 2006, a total of 619,207 units remained available under the Option Plan.
During 2007 Second Quarter, the Company issued 205,000 options to executive and key employees.

The Company previously accounted for
stock-based compensation using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. Effective July 3, 2006, the
Company adopted Statement of Financial Accounting Standards (SFAS) 123R, Share-Based Payment, using the prospective method. The prospective method requires the Company to account for awards of equity instruments based on their
grant-date fair value. This method applies to new awards and to awards modified, repurchased or cancelled after the effective date. On October 5, 2006, Kingpin granted 205,000 options to purchase common units of Kingpin, at an exercise price of
$10.29 per common unit to members of senior management. The options are subject to customary terms and conditions, including provisions for the extinguishment of options upon the termination of employment. All options have 10-year terms and vest
ratably over 3 years from the date of grant. Kingpin did not modify, repurchase, or cancel any awards during the 2007 Six Months.

The
Company uses the Black-Scholes option-pricing model to estimate the fair value of each unit option grant at the time of the grant. Assumptions included an expected term of six years, expected volatility of 30%, expected yield of 0% and a risk-free
rate of 4.6%. The expected term of six years was calculated as permitted by the simplified method for plain-vanilla options consistent with Staff Accounting Bulletin 107. The expected volatility was calculated based on the volatility of similar
companies and the share price of the Company was calculated based on a retrospective third party valuation. Compensation cost for new or modified awards will be measured and recorded in accordance with the provisions of SFAS 123R. The Company
recognizes compensation expense on a straight-line basis over the vesting period. Compensation expense of $69 was recognized for share-based compensation during the 2007 Second Quarter and is included in selling, general and administrative expenses.

A summary of option activity for the 2007 Six Months is presented below:



|                                       |  |         |   |  |                               |       |                                          |     |                          |   |    
|-------------------------------------- |  | ------- | - |  | ----------------------------- | ----- | ---------------------------------------- | --- | ------------------------ | - | ---
|(options in thousands)                 |  | Options |   |  | WeightedAverageExercise Price |       | WeightedAverageRemainingContractual Term |     | AggregateIntrinsic Value
|Outstanding at July 3, 2006            |  | 674     |   |  | $                             | 11.77 |                                          |     |                          |   |    
|Granted                                |  | 205     |   |  |                               | 10.29 |                                          |     |                          |   |    
|Exercised                              |  |        |   |  |                               |      |                                          |     |                          |   |    
|Forfeited/Canceled                     |  | (15     | ) |  |                               | 10.61 |                                          |     |                          |   |    
|                                       |  |         |   |  |                               |       |                                          |     |                          |   |    
|Outstanding at December 31, 2006       |  | 864     |   |  | $                             | 11.44 |                                          | 8.2 |                          | $ | 370
|                                       |  |         |   |  |                               |       |                                          |     |                          |   |    
|Exercisable at December 31, 2006       |  | 310     |   |  | $                             | 11.81 |                                          | 7.5 |                          | $ | 152
|                                       |  |         |   |  |                               |       |                                          |     |                          |   |    
|Expected to vest in future periods (a) |  | 521     |   |  | $                             | 10.55 |                                          | 8.5 |                          | $ | 205
|                                       |  |         |   |  |                               |       |                                          |     |                          |   |    

---

|(a) | The number of options expected to vest takes into account an estimate of expected forfeiture.
|--- | ---------------------------------------------------------------------------------------------



11



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



The weighted average grant-date fair value of options granted during 2007 Second Quarter was $4.31.
As of December 31, 2006, $761 of total unrecognized compensation cost related to previously granted stock options is expected to be recorded over a weighted-average period of 2.8 years.



F-12



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



NOTE 5. COMPREHENSIVE LOSS

Comprehensive income (loss) was $(277) for the 2007 Second Quarter, $(17,519) for the 2007 Six Months, $2,518 for the 2006 Second Quarter and $(17,891) for the 2006 Six Months. Accumulated other comprehensive loss of
$6,647 at December 31, 2006 and $5,612 at July 2, 2006 is included in stockholders equity and consists of the foreign currency translation adjustment and minimum pension liability.

NOTE 6. PROPERTY AND EQUIPMENT, NET

Property and
equipment, net, consisted of:



|                                  |  |                   |          |   |              |   |         |  
|--------------------------------- |  | ----------------- | -------- | - | ------------ | - | ------- | -
|                                  |  | December 31, 2006 |          |   | July 2, 2006 |  
|                                  | 
|Land                              |  | $                 | 23,481   |   |              | $ | 24,709  |  
|Buildings and improvements        |  |                   | 124,346  |   |              |   | 120,432 |  
|Equipment, furniture and fixtures |  |                   | 176,804  |   |              |   | 169,877 |  
|Other                             |  |                   | 13,935   |   |              |   | 3,208   |  
|                                  |  |                   |          |   |              |   |         |  
|                                  |  |                   | 338,566  |   |              |   | 318,226 |  
|Less accumulated depreciation     |  |                   | (109,155 | ) |              |   | (89,361 | )
|                                  |  |                   |          |   |              |   |         |  
|Property and equipment, net       |  | $                 | 229,411  |   |              | $ | 228,865 |  
|                                  |  |                   |          |   |              |   |         |  

Depreciation expense related to property and equipment was $9,475 in the 2007 Second Quarter,
$21,307 in the 2007 Six Months, $9,697 in the 2006 Second Quarter and $19,889 in the 2006 Six Months, including the adjustment discussed in Note 2.

NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION

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



|                                 |  |                |       |                |   |      
|-------------------------------- |  | -------------- | ----- | -------------- | - | -----
|                                 |  | 2007 SixMonths |       | 2006 SixMonths
|Cash paid during the period for: |  |                |       |                |   |      
|Interest                         |  | $              | 9,503 |                | $ | 8,762
|Income taxes                     |  |                | 451   |                |   | 2,724

The assets and liabilities of Products contributed to the Joint Venture included total current
assets of $55,200, total property and equipment, net of $22,035, total other assets of $3,128, and total liabilities of $40,651.

NOTE 8. LONG-TERM DEBT

As discussed in Note 1, we completed the Merger on February 27, 2004 and substantially all of the long term debt Worldwide had in
place prior to the Merger was paid in full and replaced by the long term indebtness described below.



13



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Long-Term Debt Summary

Our long-term debt consisted of:



|                                      |  |                  |         |   |             |   |         |  
|------------------------------------- |  | ---------------- | ------- | - | ----------- | - | ------- | -
|                                      |  | December 31,2006 |         |   | July 2,2006 |  
|Term Loan                             |  | $                | 47,292  |   |             | $ | 77,613  |  
|Revolver                              |  |                  |        |   |             |   |        |  
|Subordinated Notes, 10%, due 2010     |  |                  | 123,910 |   |             |   | 123,910 |  
|Old Subordinated Notes, 13%, due 2008 |  |                  | 5       |   |             |   | 5       |  
|Mortgage note and capitalized leases  |  |                  | 1,968   |   |             |   | 1,974   |  
|                                      |  |                  |         |   |             |   |         |  
|Total debt                            |  |                  | 173,175 |   |             |   | 203,502 |  
|Current maturities                    |  |                  | (486    | ) |             |   | (794    | )
|                                      |  |                  |         |   |             |   |         |  
|Total long-term debt                  |  | $                | 172,689 |   |             | $ | 202,708 |  
|                                      |  |                  |         |   |             |   |         |  

Credit Agreements

As of February, 2004, in conjunction with the Merger, we entered into the Credit Agreement that consisted of a $135,000 term loan (the Term Loan) maturing in August 2009 and a $40,000 revolving loan
commitment (the Revolver) maturing in February 2009.

As of December 31, 2006, we owed $47,292 on the Term Loan. No
borrowings were outstanding under the Revolver as of the end of the 2007 Second Quarter and outstanding standby letters of credit issued under the Revolver totaled $18,834, leaving $21,166 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 $46,077 due on August 27, 2009. Current scheduled quarterly principal payments are $122 and are due on the last business day of the last month 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. During 2007 Second Quarter, we made a voluntary $30 million payment on the Term Loan and expensed $1.9 million of
deferred finance charges as a result.

Subordinated Notes

As of February 27, 2004, in conjunction with the Merger, we issued the $150,000 Subordinated Notes (the Subordinated Notes) with interest payable semi-annually. Subject to certain exceptions, the
Subordinated Notes may not be redeemed at our option before March 1, 2007. Thereafter, the Subordinated Notes are redeemable 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, we are required to offer to purchase the Subordinated Notes at 101.00% of their principal amount, plus
accrued interest. During fiscal year 2005, we repurchased and cancelled $26,090 of Subordinated Notes. As of December 31, 2006, we owed $123,910 under the Subordinated Notes.

NOTE 9. LIABILITIES SUBJECT TO RESOLUTION

In 2001, Worldwide and certain of its U.S. subsidiaries
filed voluntary petitions for relief under Chapter 11 with the United States Bankruptcy Court in the Eastern District of Virginia, Richmond Division. Liabilities subject to resolution remaining from the Chapter 11 proceeding were $103 at
December 31, 2006 and July 2, 2006. 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.



14



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



NOTE 10. COMMITMENTS AND CONTINGENCIES

Asset Sales

From time to time, we sell assets including excess 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. Centers net gains and losses from asset sales are included in bowling center operating expenses on the
Consolidated Statements of Operations. The following table shows our asset sales for the reported periods:



|                                    |  |                     |       |                     |   |       |                 |  |                 |       |  |   |       |  
|----------------------------------- |  | ------------------- | ----- | ------------------- | - | ----- | --------------- |  | --------------- | ----- |  | - | ----- | -
|                                    |  | 2007 Second Quarter |       | 2006 Second Quarter |   |       | 2007 Six Months |  | 2006 Six Months |      
|                                    |  |                     |      
|U.S. Centers  Asset Sales          |  |                     |       |                     |   |       |                 |  |                 |       |  |   |       |  
|Proceeds                            |  | $                   | 2,180 |                     | $ | 889   |                 |  | $               | 3,593 |  | $ | 1,817 |  
|Gain (loss), net                    |  |                     | 7     |                     |   | (59   | )               |  |                 | 87    |  |   | (295  | )
|                                    |  |                     |       |                    
|International Centers  Asset Sales |  |                     |       |                     |   |       |                 |  |                 |       |  |   |       |  
|Proceeds                            |  |                     |      |                     |   | 1,998 |                 |  |                 |      |  |   | 1,998 |  
|Gain, net                           |  |                     |      |                     |   | 171   |                 |  |                 |      |  |   | 171   |  

During the 2007 Second Quarter, we sold the land and buildings associated with two closed centers
in the U.S. for net proceeds of $2.2 million. During the 2006 Second Quarter, we sold the land and buildings associated with two centers in the U.S. for net proceeds of $1.5 million with net gains of $0.3 million. In addition, we received net
proceeds of $2.0 million and gains of $0.2 million related to the sale of one international center.

For the 2007 Six Months, we sold the
land and buildings associated with four closed centers in the U.S. for net proceeds of $3.5 million and net losses of $0.9 million. During the 2006 Six Months, we sold the land and buildings associated with two centers in the U.S. for net proceeds
of $1.5 million and net gains of $0.3 million. In addition, we received net proceeds of $2.0 million and a net gain of $0.2 million related to the sale of one international center.

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 and employment claims. The Company has insurance to cover general liability and workers compensation claims. The insurance is subject to a self insured
retention. In some actions, plaintiffs request punitive or other damages that may not be covered by insurance. In managements opinion, no claims or actions in which we are involved are expected to have a material adverse impact on our
financial position or results of operations.

In July 2005, the Australian state of Western Australia assessed Worldwide approximately $0.3
million for stamp taxes relating to the Merger. The assessment claims that the Merger was a purchase of a land-rich company, which Western Australian law generally provides is a company whose real estate constitutes greater than 60% of all its
assets (other than excluded assets). We paid and expensed the assessment under protest and filed an objection. The objection is under an internal review by the department of revenue of Western Australia. In March 2006, the Australian state of South
Australia assessed our former subsidiary that operated our bowling centers in Australia (BCO Australia) $405 for stamp tax relating to the Merger. Under the stock purchase agreement (the SPA) by which we sold our interest in
BCO Australia in February 2005, we were responsible for this assessment. We paid and expensed this assessment under protest and filed an objection. The objection is under an internal review by the department of revenue of South Australia. If the
assessments are not reversed, management will consider appeals. In early 2006, the Australian state of New South Wales also made inquiries about the applicability of its land-rich laws to the Merger but has not made an assessment.



15



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



NOTE 11. BUSINESS SEGMENTS

FASB Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are
defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision makers. Beginning October 8, 2005, the Company has two business segments: Centers (the
operation of bowling centers) and Holdings (the manufacture and sale of bowling and related products through our investment in the Joint Venture). Holdings includes the results and balances from the Joint Venture. Such amounts are eliminated and not
presented in our consolidated financial statements as they are accounted for using the equity method. In prior periods, the Company reported Products as a segment. The segment information for prior periods has not been recast to conform to the new
segment structure because the Joint Venture did not exist in prior periods. Information concerning these operations from continuing operations is presented below:



|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|-------------------------- |  | --------------------------------- | ----- | - | ----------------- | - | ---- | --------------------- |  | - | ----------- | - |  | --------------------------- | ------ | - | ------------------- | - | ---- | - |  | - | ---- | -
|                           |  | 2007 Second Quarter               |      
|(In millions)              |  | Revenue fromunaffiliatedcustomers |       |   | Intersegmentsales |   |      | OperatingIncome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |        |   | Capitalexpenditures |  
|Centers:                   |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|U.S                        |  | $                                 | 122.8 |   |                   | $ |     |                       |  | $ | 15.5        |   |  | $                           | 254.5  |   |                     | $ | 9.2  |   |  | $ | 10.1 |  
|International              |  |                                   | 4.5   |   |                   |   |     |                       |  |   | 0.3         |   |  |                             | 14.1   |   |                     |   | 0.2  |   |  |   | 0.2  |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Subtotal                   |  |                                   | 127.3 |   |                   |   |     |                       |  |   | 15.8        |   |  |                             | 268.6  |   |                     |   | 9.4  |   |  |   | 10.3 |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Holdings                   |  |                                   | 54.0  |   |                   |   | 8.3  |                       |  |   | (1.1        | ) |  |                             | 143.3  |   |                     |   | 1.5  |   |  |   |     |  
|Equity method eliminations |  |                                   | (53.3 | ) |                   |   | (8.3 | )                     |  |   | 0.8         |   |  |                             | (102.9 | ) |                     |   | (1.5 | ) |  |   |     |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Subtotal                   |  |                                   | 0.7   |   |                   |   |     |                       |  |   | (0.3        | ) |  |                             | 40.4   |   |                     |   |     |   |  |   |     |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Corporate                  |  |                                   |      |   |                   |   |     |                       |  |   | (1.8        | ) |  |                             | (7.5   | ) |                     |   | 0.2  |   |  |   |     |  
|Eliminations               |  |                                   |      |   |                   |   |     |                       |  |   | 0.1         |   |  |                             | 7.0    |   |                     |   | (0.1 | ) |  |   |     |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Total                      |  | $                                 | 128.0 |   |                   | $ |     |                       |  | $ | 13.8        |   |  | $                           | 308.5  |   |                     | $ | 9.5  |   |  | $ | 10.3 |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|                           | 
|                           |  | 2006 Second Quarter               |      
|(In millions)              |  | Revenue fromunaffiliatedcustomers |       |   | Intersegmentsales |   |      | OperatingIncome(loss) |  |   | Totalassets |   |  | Depreciationandamortization |        |   | Capitalexpenditures |  
|Centers:                   |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|U.S.                       |  | $                                 | 116.7 |   |                   | $ |     |                       |  | $ | 10.9        |   |  | $                           | 257.4  |   |                     | $ | 9.3  |   |  | $ | 12.6 |  
|International              |  |                                   | 4.6   |   |                   |   |     |                       |  |   | 1.0         |   |  |                             | 13.2   |   |                     |   | 0.2  |   |  |   | 0.3  |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Subtotal                   |  |                                   | 121.3 |   |                   |   |     |                       |  |   | 11.9        |   |  |                             | 270.6  |   |                     |   | 9.5  |   |  |   | 12.9 |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Products                   |  |                                   | 5.0   |   |                   |   | 0.4  |                       |  |   | 0.4         |   |  |                             |       |   |                     |   | 0.3  |   |  |   | 0.1  |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Holdings                   |  |                                   | 0.7   |   |                   |   |     |                       |  |   | 0.3         |   |  |                             | 59.5   |   |                     |   |     |   |  |   | (0.2 | )
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Corporate                  |  |                                   |      |   |                   |   |     |                       |  |   | (2.7        | ) |  |                             | 15.9   |   |                     |   | 0.3  |   |  |   | 0.2  |  
|Eliminations               |  |                                   |      |   |                   |   | (0.4 | )                     |  |   | 0.2         |   |  |                             | 5.5    |   |                     |   | (0.3 | ) |  |   | (0.1 | )
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  
|Total                      |  | $                                 | 127.0 |   |                   | $ |     |                       |  | $ | 10.1        |   |  | $                           | 351.5  |   |                     | $ | 9.8  |   |  | $ | 12.9 |  
|                           |  |                                   |       |   |                   |   |      |                       |  |   |             |   |  |                             |        |   |                     |   |      |   |  |   |      |  



16



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|-------------------------- |  | ---------------------------------- | ----- | - | ------------------ | - | ----- | ---------------------- |  | - | ------------ | - |  | ----------------------------- | ------ | - | -------------------- | - | ---- | - |  | - | ---- | -
|                           |  | 2007 Six Months                    |      
|(In millions)              |  | Revenue from unaffiliatedcustomers |       |   | Intersegment sales |   |       | Operating Income(loss) |  |   | Total assets |   |  | Depreciation and amortization |        |   | Capital expenditures |  
|Centers:                   |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|U.S.                       |  | $                                  | 220.3 |   |                    | $ |      |                        |  | $ | 6.8          |   |  | $                             | 254.5  |   |                      | $ | 20.8 |   |  | $ | 24.5 |  
|International              |  |                                    | 8.9   |   |                    |   |      |                        |  |   | 0.8          |   |  |                               | 14.1   |   |                      |   | 0.4  |   |  |   | 0.4  |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Subtotal                   |  |                                    | 229.2 |   |                    |   |      |                        |  |   | 7.6          |   |  |                               | 268.6  |   |                      |   | 21.2 |   |  |   | 24.9 |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Holdings                   |  |                                    | 91.4  |   |                    |   | 11.9  |                        |  |   | 0.3          |   |  |                               | 143.3  |   |                      |   | 3.1  |   |  |   | 1.1  |  
|Equity method eliminations |  |                                    | (90.0 | ) |                    |   | (11.9 | )                      |  |   | (0.7         | ) |  |                               | (102.9 | ) |                      |   | (3.1 | ) |  |   | (1.1 | )
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Subtotal                   |  |                                    | 1.4   |   |                    |   |      |                        |  |   | (0.4         | ) |  |                               | 40.4   |   |                      |   |     |   |  |   |     |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Corporate                  |  |                                    |      |   |                    |   |      |                        |  |   | (4.0         | ) |  |                               | (7.5   | ) |                      |   | 0.4  |   |  |   |     |  
|Eliminations               |  |                                    |      |   |                    |   |      |                        |  |   | 0.2          |   |  |                               | 7.0    |   |                      |   | (0.2 | ) |  |   |     |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Total                      |  | $                                  | 230.6 |   |                    | $ |      |                        |  | $ | 3.4          |   |  | $                             | 308.5  |   |                      | $ | 21.4 |   |  | $ | 24.9 |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|                           | 
|                           |  | 2006 Six Months                    |      
|(In millions)              |  | Revenue fromunaffiliatedcustomers  |       |   | Intersegmentsales  |   |       | OperatingIncome(loss)  |  |   | Totalassets  |   |  | Depreciationandamortization   |        |   | Capitalexpenditures  |  
|Centers:                   |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|U.S.                       |  | $                                  | 207.7 |   |                    | $ |      |                        |  | $ | 1.0          |   |  | $                             | 257.4  |   |                      | $ | 17.7 |   |  | $ | 29.7 |  
|International              |  |                                    | 9.3   |   |                    |   |      |                        |  |   | 1.5          |   |  |                               | 13.2   |   |                      |   | 0.4  |   |  |   | 0.4  |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Subtotal                   |  |                                    | 217.0 |   |                    |   |      |                        |  |   | 2.5          |   |  |                               | 270.6  |   |                      |   | 18.1 |   |  |   | 30.1 |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Products                   |  |                                    | 32.1  |   |                    |   | 7.7   |                        |  |   | (1.7         | ) |  |                               |       |   |                      |   | 1.6  |   |  |   | 1.1  |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Holdings                   |  |                                    | 0.7   |   |                    |   |      |                        |  |   | 0.1          |   |  |                               | 59.5   |   |                      |   |     |   |  |   |     |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Corporate                  |  |                                    |      |   |                    |   |      |                        |  |   | (6.3         | ) |  |                               | 15.9   |   |                      |   | 0.7  |   |  |   |     |  
|Eliminations               |  |                                    |      |   |                    |   | (7.7  | )                      |  |   | (0.3         | ) |  |                               | 5.5    |   |                      |   | (0.3 | ) |  |   | (0.6 | )
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  
|Total                      |  | $                                  | 249.8 |   |                    | $ |      |                        |  | $ | (5.7         | ) |  | $                             | 351.5  |   |                      | $ | 20.1 |   |  | $ | 30.6 |  
|                           |  |                                    |       |   |                    |   |       |                        |  |   |              |   |  |                               |        |   |                      |   |      |   |  |   |      |  

NOTE 12. ACCOUNTING PRONOUNCEMENTS

In June 2006, the FASB issued FASB Interpretation No. 48 (FIN 48 or the Interpretation), Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes (FASB No. 109). FIN 48 clarifies the accounting for uncertainty in income taxes in an enterprises financial statements in
accordance with FASB 109. This Interpretation prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken on a tax return. This Interpretation also provides guidance
on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for the fiscal year beginning July 2, 2007. The Company is still evaluating the impact of this
Interpretation.

In September 2006, the SEC issued Staff Accounting Bulletin 108 (SAB 108), which is codified as SAB Topic 1N,
Considering the Effects of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements. SAB 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to
evaluate whether approach results in an error that is material in light of relevant quantitative and qualitative factors. The Company is required to adopt SAB 108 in the fiscal year ending July 1, 2007. The Company is still evaluating the
requirements of SAB 108 and has not yet determined the impact on its consolidated financial statements.



17



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars 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 31, 2006 and July 2, 2006, condensed consolidating statements of operations for the 2007 Second Quarter, 2007 Six Months, 2006 Second Quarter and 2006 Six Months and cash flows for the 2007 Six Months and 2006
Six Months. The elimination entries presented are necessary to combine the entities. Information presented below for periods in which Products was included as a Guarantor Subsidiary has been recast to present Products as a Non-Guarantor Subsidiary.



18



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Balance Sheet



|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|--------------------------------------------- |  | ----------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                              |  | December 31, 2006 |        
|                                              |  | Worldwide         |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                        |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                               |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                     |  | $                 | 14,740  |   |                        | $ | 7,880   |                            |  | $ | 2,048        |   |  | $     |         |   |  | $ | 24,668  |  
|Accounts and notes receivable, net            |  |                   | 305     |   |                        |   | 3,415   |                            |  |   | 274          |   |  |       |         |   |  |   | 3,994   |  
|Accounts and notes receivable  intercompany  |  |                   | 18,004  |   |                        |   | 117,774 |                            |  |   | (5,181       | ) |  |       | (130,597 | ) |  |   |        |  
|Inventories, net                              |  |                   |        |   |                        |   | 4,369   |                            |  |   | 390          |   |  |       |         |   |  |   | 4,759   |  
|Prepaid expenses and other current assets     |  |                   | (7,892  | ) |                        |   | 15,817  |                            |  |   | 435          |   |  |       | 235      |   |  |   | 8,595   |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                          |  |                   | 25,157  |   |                        |   | 149,255 |                            |  |   | (2,034       | ) |  |       | (130,362 | ) |  |   | 42,016  |  
|                                              |  |                   |         |   |                       
|Property and equipment, net                   |  |                   | 8,131   |   |                        |   | 214,675 |                            |  |   | 6,605        |   |  |       |         |   |  |   | 229,411 |  
|Investment in subsidiaries                    |  |                   | 355,846 |   |                        |   | (14,139 | )                          |  |   |             |   |  |       | (341,707 | ) |  |   |        |  
|Investment in equity affiliate                |  |                   | 941     |   |                        |   | 21,859  |                            |  |   |             |   |  |       |         |   |  |   | 22,800  |  
|Other assets                                  |  |                   | 4,913   |   |                        |   | 87,107  |                            |  |   | (1,387       | ) |  |       | (76,392  | ) |  |   | 14,241  |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total assets                                  |  | $                 | 394,988 |   |                        | $ | 458,757 |                            |  | $ | 3,184        |   |  | $     | (548,461 | ) |  | $ | 308,468 |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Stockholders Equity          |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                          |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Accounts payable                              |  | $                 | 32      |   |                        | $ | 7,362   |                            |  | $ | 1,022        |   |  | $     |         |   |  | $ | 8,416   |  
|Accrued expenses and other liabilities        |  |                   | 6,503   |   |                        |   | 42,469  |                            |  |   | 1,951        |   |  |       |         |   |  |   | 50,923  |  
|Current portion of long-term debt             |  |                   | 486     |   |                        |   |        |                            |  |   |             |   |  |       |         |   |  |   | 486     |  
|Accounts and notes payable  intercompany     |  |                   | 130,598 |   |                        |   |        |                            |  |   |             |   |  |       | (130,598 | ) |  |   |        |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                     |  |                   | 137,619 |   |                        |   | 49,831  |                            |  |   | 2,973        |   |  |       | (130,598 | ) |  |   | 59,825  |  
|                                              |  |                   |         |   |                       
|Long-term debt, less current portion          |  |                   | 170,721 |   |                        |   | 1,968   |                            |  |   |             |   |  |       |         |   |  |   | 172,689 |  
|Liabilities, subject to resolution            |  |                   |        |   |                        |   | 103     |                            |  |   |             |   |  |       |         |   |  |   | 103     |  
|Other long-term liabilities                   |  |                   | 21,569  |   |                        |   | 62,382  |                            |  |   | 2,978        |   |  |       | (76,157  | ) |  |   | 10,772  |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities                             |  |                   | 329,909 |   |                        |   | 114,284 |                            |  |   | 5,951        |   |  |       | (206,755 | ) |  |   | 243,389 |  
|                                              |  |                   |         |   |                       
|Stockholders equity:                         |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock                                  |  |                   |        |   |                        |   |        |                            |  |   |             |   |  |       |         |   |  |   |        |  
|Paid-in capital                               |  |                   | 133,785 |   |                        |   | 404,658 |                            |  |   | 10,246       |   |  |       | (414,904 | ) |  |   | 133,785 |  
|Accumulated earnings (deficit)                |  |                   | (62,059 | ) |                        |   | (55,264 | )                          |  |   | (11,320      | ) |  |       | 66,584   |   |  |   | (62,059 | )
|Accumulated other comprehensive income (loss) |  |                   | (6,647  | ) |                        |   | (4,921  | )                          |  |   | (1,693       | ) |  |       | 6,614    |   |  |   | (6,647  | )
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total stockholders equity                    |  |                   | 65,079  |   |                        |   | 344,473 |                            |  |   | (2,767       | ) |  |       | (341,706 | ) |  |   | 65,079  |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities and stockholders equity    |  | $                 | 394,988 |   |                        | $ | 458,757 |                            |  | $ | 3,184        |   |  | $     | (548,461 | ) |  | $ | 308,468 |  
|                                              |  |                   |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  



19



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Balance Sheet



|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|--------------------------------------------- |  | ------------ | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | -------- | - |  | - | ------- | -
|                                              |  | July 2, 2006 |        
|                                              |  | Worldwide    |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |         
|Assets                                        |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Current assets:                               |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Cash and cash equivalents                     |  | $            | 53,650  |   |                        | $ | 2,468   |                            |  | $ | 1,357        |   |  | $     |         |   |  | $ | 57,475  |  
|Accounts and notes receivable, net            |  |              | 161     |   |                        |   | 4,568   |                            |  |   | 603          |   |  |       |         |   |  |   | 5,332   |  
|Accounts and notes receivable  intercompany  |  |              | 17,800  |   |                        |   | 125,850 |                            |  |   | (5,355       | ) |  |       | (138,295 | ) |  |   |        |  
|Inventories, net                              |  |              |        |   |                        |   | 4,204   |                            |  |   | 505          |   |  |       |         |   |  |   | 4,709   |  
|Prepaid expenses and other current assets     |  |              | (7,817  | ) |                        |   | 17,063  |                            |  |   | 728          |   |  |       | 117      |   |  |   | 10,091  |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total current assets                          |  |              | 63,794  |   |                        |   | 154,153 |                            |  |   | (2,162       | ) |  |       | (138,178 | ) |  |   | 77,607  |  
|                                              |  |              |         |   |                       
|Property and equipment, net                   |  |              | 9,086   |   |                        |   | 213,400 |                            |  |   | 6,379        |   |  |       |         |   |  |   | 228,865 |  
|Investment in subsidiaries                    |  |              | 367,752 |   |                        |   | (14,442 | )                          |  |   |             |   |  |       | (353,310 | ) |  |   |        |  
|Investment in equity affiliate                |  |              |        |   |                        |   | 31,104  |                            |  |   |             |   |  |       |         |   |  |   | 31,104  |  
|Other assets                                  |  |              | 9,826   |   |                        |   | 87,314  |                            |  |   | (1,572       | ) |  |       | (76,192  | ) |  |   | 19,376  |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total assets                                  |  | $            | 450,458 |   |                        | $ | 471,529 |                            |  | $ | 2,645        |   |  | $     | (567,680 | ) |  | $ | 356,952 |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Liabilities and Stockholders Equity          |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Current liabilities:                          |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Accounts payable                              |  | $            | 34      |   |                        | $ | 7,825   |                            |  | $ | 1,014        |   |  | $     |         |   |  | $ | 8,873   |  
|Accrued expenses and other liabilities        |  |              | 6,996   |   |                        |   | 43,224  |                            |  |   | 2,026        |   |  |       | (325     | ) |  |   | 51,921  |  
|Current portion of long-term debt             |  |              | 794     |   |                        |   |        |                            |  |   |             |   |  |       |         |   |  |   | 794     |  
|Accounts and notes payable  intercompany     |  |              | 138,271 |   |                        |   |        |                            |  |   |             |   |  |       | (138,271 | ) |  |   |        |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total current liabilities                     |  |              | 146,095 |   |                        |   | 51,049  |                            |  |   | 3,040        |   |  |       | (138,596 | ) |  |   | 61,588  |  
|                                              |  |              |         |   |                       
|Long-term debt, less current portion          |  |              | 200,734 |   |                        |   | 1,974   |                            |  |   |             |   |  |       |         |   |  |   | 202,708 |  
|Liabilities, subject to resolution            |  |              |        |   |                        |   | 103     |                            |  |   |             |   |  |       |         |   |  |   | 103     |  
|Other long-term liabilities                   |  |              | 21,569  |   |                        |   | 61,632  |                            |  |   | 3,066        |   |  |       | (76,243  | ) |  |   | 10,024  |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities                             |  |              | 368,398 |   |                        |   | 114,758 |                            |  |   | 6,106        |   |  |       | (214,839 | ) |  |   | 274,423 |  
|                                              |  |              |         |   |                       
|Stockholders equity:                         |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Common stock                                  |  |              |        |   |                        |   |        |                            |  |   |             |   |  |       |         |   |  |   |        |  
|Paid-in capital                               |  |              | 133,716 |   |                        |   | 407,109 |                            |  |   | 7,189        |   |  |       | (414,298 | ) |  |   | 133,716 |  
|Accumulated (deficit) earnings                |  |              | (46,044 | ) |                        |   | (46,740 | )                          |  |   | (8,673       | ) |  |       | 55,882   |   |  |   | (45,575 | )
|Accumulated other comprehensive income (loss) |  |              | (5,612  | ) |                        |   | (3,598  | )                          |  |   | (1,977       | ) |  |       | 5,575    |   |  |   | (5,612  | )
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total stockholders equity                    |  |              | 82,060  |   |                        |   | 356,771 |                            |  |   | (3,461       | ) |  |       | (352,841 | ) |  |   | 82,529  |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  
|Total liabilities and stockholders equity    |  | $            | 450,458 |   |                        | $ | 471,529 |                            |  | $ | 2,645        |   |  | $     | (567,680 | ) |  | $ | 356,952 |  
|                                              |  |              |         |   |                        |   |         |                            |  |   |              |   |  |       |          |   |  |   |         |  



20



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------- | ------ | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                         |  | 2007 Second Quarter |       
|                                                                                                         |  | Worldwide           |        |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                                        |  | $                   |       |   |                        | $ | 122,342 |                            |  | $ | 5,696        |   |  | $     |       |   |  | $ | 128,038 |  
|                                                                                                         |  |                     |        |   |                       
|Operating expenses:                                                                                      |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                     |       |   |                        |   | 10,392  |                            |  |   | 776          |   |  |       |       |   |  |   | 11,168  |  
|Bowling center operating expenses                                                                        |  |                     |       |   |                        |   | 80,642  |                            |  |   | 2,991        |   |  |       |       |   |  |   | 83,633  |  
|Selling, general and administrative expenses                                                             |  |                     | 1,661  |   |                        |   | 7,234   |                            |  |   | 1,008        |   |  |       |       |   |  |   | 9,903   |  
|Depreciation and amortization                                                                            |  |                     | 162    |   |                        |   | 9,277   |                            |  |   | 197          |   |  |       | (120   | ) |  |   | 9,516   |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                                 |  |                     | 1,823  |   |                        |   | 107,545 |                            |  |   | 4,972        |   |  |       | (120   | ) |  |   | 114,220 |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                     | (1,823 | ) |                        |   | 14,797  |                            |  |   | 724          |   |  |       | 120    |   |  |   | 13,818  |  
|                                                                                                         |  |                     |        |   |                       
|Non-operating (income) expenses:                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                         |  |                     | 5,295  |   |                        |   | 44      |                            |  |   |             |   |  |       |       |   |  |   | 5,339   |  
|Interest income                                                                                          |  |                     | (263   | ) |                        |   | (52     | )                          |  |   | (19          | ) |  |       |       |   |  |   | (334    | )
|Loss on extinguishment of debt                                                                           |  |                     | 1,907  |   |                        |   |        |                            |  |   |             |   |  |       |       |   |  |   | 1,907   |  
|(Income) loss from equity affiliate                                                                      |  |                     |       |   |                        |   | 580     |                            |  |   |             |   |  |       | (174   | ) |  |   | 406     |  
|Impairment of equity method investment                                                                   |  |                     |       |   |                        |   | 4,587   |                            |  |   |             |   |  |       |       |   |  |   | 4,587   |  
|Other (income) expense                                                                                   |  |                     | (5,241 | ) |                        |   | 5,110   |                            |  |   | 178          |   |  |       | 12     |   |  |   | 59      |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                     | 1,698  |   |                        |   | 10,269  |                            |  |   | 159          |   |  |       | (162   | ) |  |   | 11,964  |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                     | (3,521 | ) |                        |   | 4,528   |                            |  |   | 565          |   |  |       | 282    |   |  |   | 1,854   |  
|                                                                                                         |  |                     |        |   |                       
|Provision for income taxes                                                                               |  |                     | 38     |   |                        |   | 906     |                            |  |   | 119          |   |  |       |       |   |  |   | 1,063   |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                     | (3,559 | ) |                        |   | 3,622   |                            |  |   | 446          |   |  |       | 282    |   |  |   | 791     |  
|Discontinued operations:                                                                                 |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations, net of tax                                                            |  |                     |       |   |                        |   | (128    | )                          |  |   |             |   |  |       |       |   |  |   | (128    | )
|Loss on disposal, net of tax                                                                             |  |                     |       |   |                        |   | (402    | )                          |  |   |             |   |  |       |       |   |  |   | (402    | )
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations                                                                        |  |                     |       |   |                        |   | (530    | )                          |  |   |             |   |  |       |       |   |  |   | (530    | )
|                                                                                                         |  |                     |        |   |                       
|Equity in income (loss) of subsidiaries                                                                  |  |                     | 3,820  |   |                        |   |        |                            |  |   |             |   |  |       | (3,820 | ) |  |   |        |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                   | 261    |   |                        | $ | 3,092   |                            |  | $ | 446          |   |  | $     | (3,538 | ) |  | $ | 261     |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  



21



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                         |  | 2007 Six Months |        
|                                                                                                         |  | Worldwide       |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                                        |  | $               |        |   |                       | $ | 219,865 |                           |  | $ | 10,701       |   |  | $     |       |   |  | $ | 230,566 |  
|                                                                                                         |  |                 |         |   |                      
|Operating expenses:                                                                                      |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                 |        |   |                       |   | 18,702  |                           |  |   | 1,413        |   |  |       |       |   |  |   | 20,115  |  
|Bowling center operating expenses                                                                        |  |                 |        |   |                       |   | 160,078 |                           |  |   | 5,614        |   |  |       |       |   |  |   | 165,692 |  
|Selling, general and administrative expenses                                                             |  |                 | 3,672   |   |                       |   | 14,485  |                           |  |   | 1,780        |   |  |       |       |   |  |   | 19,937  |  
|Depreciation and amortization                                                                            |  |                 | 356     |   |                       |   | 20,890  |                           |  |   | 389          |   |  |       | (246   | ) |  |   | 21,389  |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                                 |  |                 | 4,028   |   |                       |   | 214,155 |                           |  |   | 9,196        |   |  |       | (246   | ) |  |   | 227,133 |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                 | (4,028  | ) |                       |   | 5,710   |                           |  |   | 1,505        |   |  |       | 246    |   |  |   | 3,433   |  
|                                                                                                         |  |                 |         |   |                      
|Non-operating (income) expenses:                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                         |  |                 | 11,069  |   |                       |   | 87      |                           |  |   |             |   |  |       |       |   |  |   | 11,156  |  
|Interest income                                                                                          |  |                 | (801    | ) |                       |   | (105    | )                         |  |   | (28          | ) |  |       |       |   |  |   | (934    | )
|Loss on extinguishment of debt                                                                           |  |                 | 1,907   |   |                       |   |        |                           |  |   |             |   |  |       |       |   |  |   | 1,907   |  
|(Income) loss from equity affiliate                                                                      |  |                 |        |   |                       |   | 3,474   |                           |  |   |             |   |  |       | (993   | ) |  |   | 2,481   |  
|Impairment of equity method investment                                                                   |  |                 |        |   |                       |   | 4,587   |                           |  |   |             |   |  |       |       |   |  |   | 4,587   |  
|Other (income) expense                                                                                   |  |                 | (10,369 | ) |                       |   | 10,055  |                           |  |   | 369          |   |  |       | 14     |   |  |   | 69      |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                 | 1,806   |   |                       |   | 18,098  |                           |  |   | 341          |   |  |       | (979   | ) |  |   | 19,266  |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                 | (5,834  | ) |                       |   | (12,388 | )                         |  |   | 1,164        |   |  |       | 1,225  |   |  |   | (15,833 | )
|                                                                                                         |  |                 |         |   |                      
|Provision (benefit) for income taxes                                                                     |  |                 | 83      |   |                       |   | (226    | )                         |  |   | 264          |   |  |       |       |   |  |   | 121     |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |                 | (5,917  | ) |                       |   | (12,162 | )                         |  |   | 900          |   |  |       | 1,225  |   |  |   | (15,954 | )
|Discontinued operations:                                                                                 |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations, net of tax                                                            |  |                 |        |   |                       |   | (128    | )                         |  |   |             |   |  |       |       |   |  |   | (128    | )
|Loss on disposal, net of tax                                                                             |  |                 |        |   |                       |   | (402    | )                         |  |   |             |   |  |       |       |   |  |   | (402    | )
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations                                                                        |  |                 |        |   |                       |   | (530    | )                         |  |   |             |   |  |       |       |   |  |   | (530    | )
|                                                                                                         |  |                 |         |   |                      
|Equity in income (loss) of subsidiaries                                                                  |  |                 | (10,567 | ) |                       |   |        |                           |  |   |             |   |  |       | 10,567 |   |  |   |        |  
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                                        |  | $               | (16,484 | ) |                       | $ | (12,692 | )                         |  | $ | 900          |   |  | $     | 11,792 |   |  | $ | (16,484 | )
|                                                                                                         |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |        |   |  |   |         |  



22



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------- | ------ | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                         |  | 2006 Second Quarter |       
|                                                                                                         |  | Worldwide           |        |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                                        |  | $                   |       |   |                        | $ | 118,746 |                            |  | $ | 13,112       |   |  | $     | (4,840 | ) |  | $ | 127,018 |  
|                                                                                                         |  |                     |        |   |                       
|Operating expenses:                                                                                      |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                                       |  |                     |       |   |                        |   | 11,594  |                            |  |   | 7,346        |   |  |       | (3,130 | ) |  |   | 15,810  |  
|Bowling center operating expenses                                                                        |  |                     |       |   |                        |   | 78,966  |                            |  |   | 3,552        |   |  |       | (1,455 | ) |  |   | 81,063  |  
|Selling, general and administrative expenses                                                             |  |                     | 2,010  |   |                        |   | 6,883   |                            |  |   | 1,189        |   |  |       |       |   |  |   | 10,082  |  
|Asset impairment                                                                                         |  |                     |       |   |                        |   | 163     |                            |  |   |             |   |  |       |       |   |  |   | 163     |  
|Depreciation and amortization                                                                            |  |                     | 271    |   |                        |   | 9,353   |                            |  |   | 439          |   |  |       | (275   | ) |  |   | 9,788   |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                                 |  |                     | 2,281  |   |                        |   | 106,959 |                            |  |   | 12,526       |   |  |       | (4,860 | ) |  |   | 116,906 |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                                  |  |                     | (2,281 | ) |                        |   | 11,787  |                            |  |   | 586          |   |  |       | 20     |   |  |   | 10,112  |  
|                                                                                                         |  |                     |        |   |                       
|Non-operating (income) expenses:                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                         |  |                     | 5,509  |   |                        |   | 48      |                            |  |   | 6            |   |  |       | (6     | ) |  |   | 5,557   |  
|Interest income                                                                                          |  |                     | (190   | ) |                        |   | (56     | )                          |  |   | (21          | ) |  |       | 6      |   |  |   | (261    | )
|Other expense (income), net                                                                              |  |                     | (6,082 | ) |                        |   | 5,889   |                            |  |   | (677         | ) |  |       |       |   |  |   | (870    | )
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                                    |  |                     | (763   | ) |                        |   | 5,881   |                            |  |   | (692         | ) |  |       |       |   |  |   | 4,426   |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                     | (1,518 | ) |                        |   | 5,906   |                            |  |   | 1,278        |   |  |       | 20     |   |  |   | 5,686   |  
|                                                                                                         |  |                     |        |   |                       
|Provision (benefit) for income taxes                                                                     |  |                     | 58     |   |                        |   | (48     | )                          |  |   | (84          | ) |  |       |       |   |  |   | (74     | )
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Income (loss) from continuing operations before equity in income (loss) of subsidiaries                  |  |                     | (1,576 | ) |                        |   | 5,954   |                            |  |   | 1,362        |   |  |       | 20     |   |  |   | 5,760   |  
|                                                                                                         |  |                     |        |   |                       
|Discontinued operations:                                                                                 |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations, net of tax                                                            |  |                     |       |   |                        |   | (1,238  | )                          |  |   |             |   |  |       |       |   |  |   | (1,238  | )
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations                                                                        |  |                     |       |   |                        |   | (1,238  | )                          |  |   |             |   |  |       |       |   |  |   | (1,238  | )
|                                                                                                         |  |                     |        |   |                       
|Equity in income (loss) of subsidiaries                                                                  |  |                     | 6,098  |   |                        |   |        |                            |  |   |             |   |  |       | (6,098 | ) |  |   |        |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                                        |  | $                   | 4,522  |   |                        | $ | 4,716   |                            |  | $ | 1,362        |   |  | $     | (6,078 | ) |  | $ | 4,522   |  
|                                                                                                         |  |                     |        |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  



23



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations



|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|----------------------------------------------------------------------------------------------- |  | --------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ------ | - |  | - | ------- | -
|                                                                                                |  | 2006 Six Months |        
|                                                                                                |  | Worldwide       |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |       
|Operating revenue                                                                               |  | $               |        |   |                        | $ | 209,625 |                            |  | $ | 47,858       |   |  | $     | (7,722 | ) |  | $ | 249,761 |  
|                                                                                                |  |                 |         |   |                       
|Operating expenses:                                                                             |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Cost of goods sold                                                                              |  |                 |        |   |                        |   | 19,883  |                            |  |   | 32,927       |   |  |       | (5,591 | ) |  |   | 47,219  |  
|Bowling center operating expenses                                                               |  |                 |        |   |                        |   | 156,171 |                            |  |   | 5,532        |   |  |       | (1,531 | ) |  |   | 160,172 |  
|Selling, general and administrative expenses                                                    |  |                 | 5,218   |   |                        |   | 13,719  |                            |  |   | 8,386        |   |  |       |       |   |  |   | 27,323  |  
|Asset impairment                                                                                |  |                 |        |   |                        |   | 259     |                            |  |   | 347          |   |  |       |       |   |  |   | 606     |  
|Depreciation and amortization                                                                   |  |                 | 692     |   |                        |   | 17,797  |                            |  |   | 1,935        |   |  |       | (284   | ) |  |   | 20,140  |  
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total operating expenses                                                                        |  |                 | 5,910   |   |                        |   | 207,829 |                            |  |   | 49,127       |   |  |       | (7,406 | ) |  |   | 255,460 |  
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Operating income (loss)                                                                         |  |                 | (5,910  | ) |                        |   | 1,796   |                            |  |   | (1,269       | ) |  |       | (316   | ) |  |   | (5,699  | )
|                                                                                                |  |                 |         |   |                       
|Non-operating (income) expenses:                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Interest expense                                                                                |  |                 | 10,960  |   |                        |   | 98      |                            |  |   | 238          |   |  |       | (238   | ) |  |   | 11,058  |  
|Interest income                                                                                 |  |                 | (644    | ) |                        |   | (148    | )                          |  |   | (33          | ) |  |       | 238    |   |  |   | (587    | )
|Other expense (income), net                                                                     |  |                 | (10,902 | ) |                        |   | 10,503  |                            |  |   | (275         | ) |  |       |       |   |  |   | (674    | )
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Total non-operating (income) expenses                                                           |  |                 | (586    | ) |                        |   | 10,453  |                            |  |   | (70          | ) |  |       |       |   |  |   | 9,797   |  
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from continuing operations before income taxes and equity in income (loss) of subsidiaries |  |                 | (5,324  | ) |                        |   | (8,657  | )                          |  |   | (1,199       | ) |  |       | (316   | ) |  |   | (15,496 | )
|                                                                                                |  |                 |         |   |                       
|Provision (benefit) for income taxes                                                            |  |                 | 71      |   |                        |   | (875    | )                          |  |   | 140          |   |  |       |       |   |  |   | (664    | )
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from continuing operations before equity in income (loss) of subsidiaries                  |  |                 | (5,395  | ) |                        |   | (7,782  | )                          |  |   | (1,339       | ) |  |       | (316   | ) |  |   | (14,832 | )
|                                                                                                |  |                 |         |   |                       
|Discontinued operations:                                                                        |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations, net of tax                                                   |  |                 |        |   |                        |   | (1,175  | )                          |  |   |             |   |  |       |       |   |  |   | (1,175  | )
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Loss from discontinued operations                                                               |  |                 |        |   |                        |   | (1,175  | )                          |  |   |             |   |  |       |       |   |  |   | (1,175  | )
|                                                                                                |  |                 |         |   |                       
|Equity in income (loss) of subsidiaries                                                         |  |                 | (10,612 | ) |                        |   |        |                            |  |   |             |   |  |       | 10,612 |   |  |   |        |  
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  
|Net income (loss)                                                                               |  | $               | (16,007 | ) |                        | $ | (8,957  | )                          |  | $ | (1,339       | ) |  | $     | 10,296 |   |  | $ | (16,007 | )
|                                                                                                |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |        |   |  |   |         |  



24



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows



|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|------------------------------------------------------------------------------ |  | --------------- | ------- | - | --------------------- | - | ------- | ------------------------- |  | - | ------------ | - |  | ----- | --- | - |  | - | ------- | -
|                                                                               |  | 2007 Six Months |        
|                                                                               |  | Worldwide       |         |   | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |   | Eliminations |   |  | Total |    
|Net cash provided by (used in) operating activities from continuing operations |  | $               | (8,585  | ) |                       | $ | 26,299  |                           |  | $ | 1,108        |   |  | $     | (79 | ) |  | $ | 18,743  |  
|                                                                               |  |                 |         |   |                      
|Cash flows from investing activities:                                          |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Capital expenditures                                                           |  |                 | (4      | ) |                       |   | (24,474 | )                         |  |   | (420         | ) |  |       |    |   |  |   | (24,898 | )
|Proceeds from the sale of:                                                     |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Property and equipment                                                         |  |                 |        |   |                       |   | 3,593   |                           |  |   | 3            |   |  |       |    |   |  |   | 3,596   |  
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Net cash used in investing activities from continuing operations               |  |                 | (4      | ) |                       |   | (20,881 | )                         |  |   | (417         | ) |  |       |    |   |  |   | (21,302 | )
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Cash flows from financing activities:                                          |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Payments of long-term debt                                                     |  |                 | (30,321 | ) |                       |   | (6      | )                         |  |   |             |   |  |       |    |   |  |   | (30,327 | )
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Net cash used in financing activities from continuing operations               |  |                 | (30,321 | ) |                       |   | (6      | )                         |  |   |             |   |  |       |    |   |  |   | (30,327 | )
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Effect of exchange rates on cash                                               |  |                 |        |   |                       |   |        |                           |  |   |             |   |  |       | 79  |   |  |   | 79      |  
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Net increase (decrease) in cash                                                |  |                 | (38,910 | ) |                       |   | 5,412   |                           |  |   | 691          |   |  |       |    |   |  |   | (32,807 | )
|                                                                               |  |                 |         |   |                      
|Cash at beginning of period                                                    |  |                 | 53,650  |   |                       |   | 2,468   |                           |  |   | 1,357        |   |  |       |    |   |  |   | 57,475  |  
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  
|Cash at end of period                                                          |  | $               | 14,740  |   |                       | $ | 7,880   |                           |  | $ | 2,048        |   |  | $     |    |   |  | $ | 24,668  |  
|                                                                               |  |                 |         |   |                       |   |         |                           |  |   |              |   |  |       |     |   |  |   |         |  



25



---

##### Table of Contents

AMF BOWLING WORLDWIDE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in
thousands, except as otherwise noted)

(unaudited)



Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows



|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|------------------------------------------------------------------------------ |  | --------------- | ------- | - | ---------------------- | - | ------- | -------------------------- |  | - | ------------ | - |  | ----- | ---- | - |  | - | ------- | -
|                                                                               |  | 2006 Six Months |        
|                                                                               |  | Worldwide       |         |   | Guarantor Subsidiaries |   |         | Non-Guarantor Subsidiaries |  |   | Eliminations |   |  | Total |     
|Net cash provided by (used in) operating activities from continuing operations |  | $               | (27,881 | ) |                        | $ | 23,503  |                            |  | $ | 856          |   |  | $     | 4    |   |  | $ | (3,518  | )
|                                                                               |  |                 |         |   |                       
|Cash flows from investing activities:                                          |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Capital expenditures                                                           |  |                 | 8       |   |                        |   | (29,697 | )                          |  |   | (1,526       | ) |  |       | 600  |   |  |   | (30,615 | )
|Proceeds from:                                                                 |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Return of cash from equity affiliate                                           |  |                 | 17,531  |   |                        |   |        |                            |  |   |             |   |  |       |     |   |  |   | 17,531  |  
|Sale of property and equipment                                                 |  |                 |        |   |                        |   | 7,595   |                            |  |   | 21           |   |  |       |     |   |  |   | 7,616   |  
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Net cash provided by (used in) investing activities from continuing operations |  |                 | 17,539  |   |                        |   | (22,102 | )                          |  |   | (1,505       | ) |  |       | 600  |   |  |   | (5,468  | )
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Cash flows from financing activities:                                          |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Payments of long-term debt                                                     |  |                 | (554    | ) |                        |   |        |                            |  |   |             |   |  |       |     |   |  |   | (554    | )
|Payments under capital lease obligations                                       |  |                 |        |   |                        |   | (141    | )                          |  |   |             |   |  |       |     |   |  |   | (141    | )
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Net cash used in financing activities from continuing operations               |  |                 | (554    | ) |                        |   | (141    | )                          |  |   |             |   |  |       |     |   |  |   | (695    | )
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Effect of exchange rates on cash                                               |  |                 |        |   |                        |   |        |                            |  |   |             |   |  |       | (604 | ) |  |   | (604    | )
|Net cash used in operating activities from discontinued operations             |  |                 |        |   |                        |   | (498    | )                          |  |   |             |   |  |       |     |   |  |   | (498    | )
|Net cash used in investing activities from discontinued operations             |  |                 |        |   |                        |   | (149    | )                          |  |   |             |   |  |       |     |   |  |   | (149    | )
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Net increase (decrease) in cash                                                |  |                 | (10,896 | ) |                        |   | 613     |                            |  |   | (649         | ) |  |       |     |   |  |   | (10,932 | )
|                                                                               |  |                 |         |   |                       
|Cash at beginning of period                                                    |  |                 | 39,537  |   |                        |   | 4,045   |                            |  |   | 1,672        |   |  |       |     |   |  |   | 45,254  |  
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  
|Cash at end of period                                                          |  | $               | 28,641  |   |                        | $ | 4,658   |                            |  | $ | 1,023        |   |  | $     |     |   |  | $ | 34,322  |  
|                                                                               |  |                 |         |   |                        |   |         |                            |  |   |              |   |  |       |      |   |  |   |         |  



26



---

##### Table of Contents

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

Contents:

This MD&A includes the following:



| |  |  | Overview
| | - |  | --------



| |  |  | Joint Venture
| | - |  | -------------



| |  |  | Accounting for the Joint Venture
| | - |  | --------------------------------



| |  |  | Merger
| | - |  | ------



| |  |  | Consolidated Results
| | - |  | --------------------



| |  |  | 2007 Second Quarter compared with 2006 Second Quarter
| | - |  | -----------------------------------------------------



| |  |  | 2007 Six Months compared with 2006 Six Months
| | - |  | ---------------------------------------------



| |  |  | Financial Condition
| | - |  | -------------------



| |  |  | Liquidity
| | - |  | ---------



| |  |  | Capital Resources
| | - |  | -----------------



| |  |  | Asset Sales
| | - |  | -----------



| |  |  | Capital Expenditures
| | - |  | --------------------



| |  |  | Seasonality
| | - |  | -----------



| |  |  | International Operations
| | - |  | ------------------------



| |  |  | Impact of Inflation
| | - |  | -------------------



| |  |  | Critical Accounting Policies
| | - |  | ----------------------------



| |  |  | Disclosures Regarding Forward-Looking Statements
| | - |  | ------------------------------------------------

Overview

AMF Bowling Worldwide, Inc., a Delaware corporation (Worldwide), and its subsidiaries (Worldwide and
our subsidiaries may be referred to as the Company, AMF, we, us, or our) are engaged in the business of operating bowling centers and have an investment in a business that manufactures and sells bowling equipment. Since October 8, 2005, the
Company has two reportable business segments:



| |  |  | the operation of bowling centers (Centers); and
| | - |  | -------------------------------------------------



| |  |  | Holdings, which holds our investment in the Joint Venture (defined below) and a company that provides technical services exclusively to the Joint
Venture.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

For periods prior to October 8, 2005, AMF was engaged in two business segments:



| |  |  | 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).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

AMF is the largest operator of bowling centers in the world with 358 centers in operation as of December 31, 2006, and is comprised
of 345 centers in the U.S. and 13 bowling centers operating outside the U.S. We have operated our bowling centers under the AMF brand for a number of years. We have recently developed a new brand of centers (300 Centers),
which offer a new entertainment concept with lounge seating in the bowlers area, enhanced food and beverage offerings and customer service for individuals and group events. We have identified six centers to remodel, upgrade and operate as 300
Centers, five of which have been completed and re-opened. We are monitoring results and exploring other opportunities to expand the number of 300 Centers. The results of the 300 Centers are not material to the Centers business segment.

AMF was also one of the largest manufacturers of bowling equipment in the world. We conducted our business of manufacturing and selling bowling
equipment through our Products subsidiaries until October 7, 2005. Until such date, we reported Products as a segment of our business. On October 7, 2005, we entered into the Joint Venture with the shareholder of Italian-based Qubica,
S.p.A. (Qubica), and contributed this business in exchange for a 50% equity interest.



27



---

##### Table of Contents

On December 4, 2005, we sold our billiards division for gross cash proceeds of approximately $4.5
million subject to certain post-closing adjustments. Billiards manufactured and sold billiard tables and accessories. The results of operations for the billiards division have been reported as discontinued operations for all periods presented and
are included within our former Products segment.

Worldwide serves as the corporate headquarters of the Company. Its employees provide
management and administrative services for Centers and Holdings and certain provided administrative services for Products until October 7, 2005.

Joint Venture

On October 7, 2005, we completed transactions to form the Joint Venture. In these transactions, AMF
Holdings, Inc. (AMF Holdings), a subsidiary of Worldwide, contributed the equity of QubicaAMF Worldwide, LLC, formerly known as AMF Bowling Products, LLC (AMF Products), and substantially all of the other subsidiaries that
conducted our Products business to QubicaAMF Worldwide, S.à.R.L. (the Joint Venture), in exchange for a 50% equity interest in the Joint Venture. The shareholder of Qubica also contributed the equity of Qubica and its subsidiaries
to the Joint Venture in exchange for a 50% equity interest in the Joint Venture. The board of managers of the Joint Venture has six members split equally between AMF Holdings and the shareholder of Qubica.

AMF Bowling Products UK Limited (UK BPO), a company organized under the laws of the United Kingdom, was a subsidiary of our Products business
but was not contributed to the Joint Venture. UK BPO is now owned by AMF Holdings and provides technical services exclusively to the Joint Venture under a services agreement. The Joint Venture provides administrative services, such as accounting and
financial services, to UK BPO.

In creating the Joint Venture, Worldwide and certain of its non-Products subsidiaries entered into various
agreements with the Joint Venture and its subsidiaries. These agreements include, but are not limited to, a supply agreement between Centers and the Joint Venture that requires the purchase of bowling products and supplies from the Joint Venture at
prices charged and volumes similar to those in the past, a trademark license agreement between Worldwide and the Joint Venture, AMF Products and Qubica that allows them to use the AMF mark and certain related marks, and various administrative
services and similar agreements that provide for leasing space in certain facilities and support services from and to the Company and the Joint Venture. Management believes these agreements reflect commercial terms.

The Joint Venture and certain of its subsidiaries entered into a credit agreement for a $30.0 million revolving credit facility. Certain assets of the
Joint Venture and certain of its subsidiaries secure the Joint Venture credit agreement. Worldwide and its remaining subsidiaries have no obligation under the Joint Ventures credit agreement. Neither Worldwide nor AMF Holdings has any
obligation to contribute capital or make loans to the Joint Venture. AMF Products is not a guarantor of our obligations under our senior secured credit agreement (the Credit Agreement) and our Subordinated Notes due in 2010 (the
Subordinated Notes).

Fiscal Year

We report on a retail calendar year, with each quarter comprised of one 5-week period and two 4-week periods. Fiscal years 2007 and 2006 have 52 weeks. Second quarters 2007 and 2006 ended on December 31, 2006 and January 1, 2006,
respectively.

Accounting for the Joint Venture

Our investment in the Joint Venture is accounted for using the equity method of accounting. We receive financial information from the Joint Venture on a delayed basis and therefore we record our share of the income or losses in our
investment one quarter in arrears. For the 2007 Six Months, we recorded losses from our investment of $2.5 million including amortization of the basis difference between our investment and our share of the Joint Ventures underlying equity,
elimination of intercompany interest and elimination of intercompany profit on purchases.

Our
investment was recorded initially at cost and is adjusted for our equity share in net income (loss) and any cash contributions and distributions. There have been no such cash transactions since the formation of the Joint Venture. At the time of
formation, there was a difference between the carrying amount of this investment on our balance sheet and the underlying equity in net assets of the Joint Venture of $11.3 million which is amortized as an adjustment to loss from equity affiliate
over five years, the useful life of the underlying assets to which the basis difference is attributed. AMF continues to purchase bowling equipment and supplies from the Joint Venture, and eliminates its share of the intercompany profit. The Joint
Venture has a December 31styear end for financial reporting purposes. The only audited financial statements
available for the Joint venture cover the period from October 8, 2005 (inception) through December 31, 2005.



28



---

##### Table of Contents

Selected financial results of the Joint Venture as of September 30, 2006 and for the periods
July 1, 2006 to September 30, 2006 (Second Quarter) and April 1, 2006 to September are as follows:



|                        |  |   |         |  
|----------------------- |  | - | ------- | -
|Financial position:     |  |   |         |  
|Current assets          |  | $ | 68,891  |  
|Non-current assets      |  |   | 34,024  |  
|                        |  |   |         |  
|Total assets            |  |   | 102,915 |  
|                        |  |   |         |  
|                        | 
|Current liabilities     |  |   | 32,801  |  
|Non-current liabilities |  |   | 73,916  |  
|                        |  |   |         |  
|Total liabilities       |  |   | 106,717 |  
|                        |  |   |         |  
|                        | 
|Stockholders deficit   |  |   | (3,802  | )
|                        |  |   |         |  



|                       |  |                  |        |                 |   |       
|---------------------- |  | ---------------- | ------ | --------------- | - | ------
|                       |  | 2007 2nd Quarter |        | 2007 Six Months
|Results of operations: |  |                  |        |                 |   |       
|Revenue                |  | $                | 49,736 |                 | $ | 90,018
|Gross profit           |  |                  | 14,618 |                 |   | 26,000
|Net loss               |  |                  | 54     |                 |   | 4,512 

Based on a deterioration in the financial results of the Joint Venture during the 2007 Second
Quarter, the Company recorded an impairment charge related to our investment in the Joint Venture of $4,587 because we determined the impairment was other than temporary. The amount of the impairment was determined based on a third party valuation.

Merger

On February 27, 2004, we
were acquired in a merger transaction (the Merger) by a subsidiary of Kingpin Holdings LLC (Kingpin), a Delaware limited liability company formed at the direction of Code Hennessy & Simmons LLC, a Chicago-based
private equity firm (CHS) to effect the Merger. Kingpin Holdings is owned by a fund managed by CHS and other equity investors.



29



---

##### Table of Contents

Consolidated Results

The results of operations of the consolidated group of companies and Centers are discussed below. The business segments 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.

The Company recognized additional depreciation expense of $2.0 million in the 2007 First Quarter to correct a depreciation error from Fiscal Year 2006. The Company also recognized a reduction in the bowling center operating expenses of
$0.7 million in the 2007 First Quarter to correct an error in calculating insurance liabilities in prior years. The Company evaluated the errors, considering both the quantitative and qualitative aspects, and concluded that neither the errors
nor the corrections of such were material to the consolidated financial statements. These errors related to a system generated reduction in depreciation expense and an over accrual in our general liability reserve due to the inclusion of claims
that were not of a general liability nature. We discovered these errors in our closing of the 2007 First Quarter and corrected them.

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 July 2, 2006.



|                                                       |  |                      
|------------------------------------------------------ |  | ---------------------
|Period                                                 |  | Referred to as       
|Results from October 2, 2006 through December 31, 2006 |  | 2007 Second Quarter
|                                                       | 
|Results from October 3, 2005 through January 1, 2006   |  | 2006 Second Quarter
|                                                       | 
|Results from July 3, 2006 through December 31, 2006    |  | 2007 Six Months    
|                                                       | 
|Results from July 4, 2005 through January 1, 2006      |  | 2006 Six Months    
|                                                       | 
|Results from July 3, 2006 through July 1, 2007         |  | Fiscal Year 2007   
|                                                       | 
|Results from July 4, 2005 through July 2, 2006         |  | Fiscal Year 2006   

Consolidated Results



|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|------------------------------------------------------------ |  | ------------------ | ----- | - | ------------------ | - | ----- | -------------- |  | - | -------------- | - |  | - | ----- | -
|(In millions)                                                |  | 2007 SecondQuarter |       |   | 2006 SecondQuarter |   |       | 2007 SixMonths |  |   | 2006 SixMonths |  
|Operating revenue                                            |  | $                  | 128.0 |   |                    | $ | 127.0 |                |  | $ | 230.6          |   |  | $ | 249.8 |  
|                                                             |  |                    |       |  
|Operating expenses:                                          |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Cost of goods sold                                           |  |                    | 11.2  |   |                    |   | 15.8  |                |  |   | 20.1           |   |  |   | 47.2  |  
|Bowling center operating expenses                            |  |                    | 83.6  |   |                    |   | 81.1  |                |  |   | 165.7          |   |  |   | 160.2 |  
|Selling, general and administrative expenses                 |  |                    | 9.8   |   |                    |   | 10.0  |                |  |   | 20.0           |   |  |   | 27.3  |  
|Asset impairment                                             |  |                    |      |   |                    |   | 0.2   |                |  |   |               |   |  |   | 0.6   |  
|Depreciation and amortization                                |  |                    | 9.5   |   |                    |   | 9.8   |                |  |   | 21.4           |   |  |   | 20.2  |  
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Operating income (loss)                                      |  |                    | 13.9  |   |                    |   | 10.1  |                |  |   | 3.4            |   |  |   | (5.7  | )
|                                                             |  |                    |       |  
|Interest expense, net                                        |  |                    | 5.0   |   |                    |   | 5.3   |                |  |   | 10.2           |   |  |   | 10.5  |  
|Loss on extinguishment of debt                               |  |                    | 1.9   |   |                    |   |      |                |  |   | 1.9            |   |  |   |      |  
|Loss from equity affiliate                                   |  |                    | 0.4   |   |                    |   |      |                |  |   | 2.5            |   |  |   |      |  
|Impairment of equity method investment                       |  |                    | 4.6   |   |                    |   |      |                |  |   | 4.6            |   |  |   |      |  
|Other (income) expense, net                                  |  |                    | 0.1   |   |                    |   | (0.9  | )              |  |   | 0.1            |   |  |   | (0.7  | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|                                                             |  |                    |       |  
|Income (loss) from continuing operations before income taxes |  |                    | 1.9   |   |                    |   | 5.7   |                |  |   | (15.9          | ) |  |   | (15.5 | )
|Provision (benefit) for income taxes                         |  |                    | 1.1   |   |                    |   | (0.1  | )              |  |   | 0.1            |   |  |   | (0.7  | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Income (loss) from continuing operations                     |  |                    | 0.8   |   |                    |   | 5.8   |                |  |   | (16.0          | ) |  |   | (14.8 | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|                                                             |  |                    |       |  
|Discontinued operations:                                     |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Income (loss) from discontinued operations, net of tax       |  |                    | (0.1  | ) |                    |   | 0.1   |                |  |   | (0.1           | ) |  |   | 0.1   |  
|Loss on disposal, net of tax                                 |  |                    | (0.4  | ) |                    |   | (1.3  | )              |  |   | (0.4           | ) |  |   | (1.3  | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Loss from discontinued operations                            |  |                    | (0.5  | ) |                    |   | (1.2  | )              |  |   | (0.5           | ) |  |   | (1.2  | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  
|Net income (loss)                                            |  | $                  | 0.3   |   |                    | $ | 4.6   |                |  | $ | (16.5          | ) |  | $ | (16.0 | )
|                                                             |  |                    |       |   |                    |   |       |                |  |   |                |   |  |   |       |  



30



---

##### Table of Contents

Revenue

Consolidated operating revenue was $128.0 million in the 2007 Second Quarter, an increase of $1.0 million, or 0.8%, compared with the 2006 Second Quarter. An increase of $6.0 million is attributable to Centers revenue and offset by a
decrease of $5.0 million attributable to Products no longer being fully consolidated during the 2007 Second Quarter.

Consolidated
operating revenue was $230.6 million in the 2007 Six Months, a decrease of $19.2 million, or 7.7%, compared with the 2006 Six Months. A decrease of $32.1 million is attributable to Products no longer being fully consolidated during the 2007 Six
Months and offset by an increase of $12.2 million increase in Centers revenue.

Cost of Goods Sold and Selling, General and Administrative Expenses

Cost of goods sold and selling, general and administrative expenses decreased $4.9 million in the 2007 Second Quarter, primarily
related to Products no longer being fully consolidated during the 2007 Second Quarter.

Cost of goods sold and selling, general and
administrative expenses decreased $34.5 million in the 2007 Six Months, primarily related to Products no longer being fully consolidated during the 2007 Six Months.

Asset Impairment

Asset impairments for the 2006 Second Quarter total $0.2 million, representing the
difference between the fair market value and carrying value of impaired assets in the U.S.

During the 2006 Six Months we recorded asset
impairments of $0.6 million, representing the difference between the fair market value and carrying value of impaired assets in the U.S primarily related to Products and the impact of transactions related to the formation of the Joint Venture.

Depreciation and Amortization

Depreciation and amortization decreased $0.3 million, or 3.1% in the 2007 Second Quarter compared with 2006 Second Quarter. This decrease is primarily related to Products no longer being fully consolidated during the 2007 Second Quarter.

Depreciation and amortization increased $1.2 million, or 5.9% in the 2007 Six Months compared with 2006 Six Months. This increase is
primarily attributable to an additional expense of $2.0 million in 2007 Six Months to correct an error in calculating depreciation primarily in Fiscal Year 2006. This increase is offset by a decrease of $1.6 million related to Products no longer
being fully consolidated during the 2007 Six Months.

Provision for Income Taxes

Total income tax provision increased to $1.1 million in the 2007 Second Quarter from a $0.1 million benefit in the 2006 Second Quarter. Total tax expense
for 2007 Second Quarter included $0.8 million for state taxes. The net tax expense also includes $0.2 million of tax expenses for various international taxes including income tax withholding on intercompany transactions.

Total income tax provision increased to $0.1 million in the 2007 Six Months from a $0.7 million benefit in the 2006 Six Months. Total tax expense for
2007 Six Months included a benefit of $0.4 million for state taxes. The net tax expense includes $0.4 million of tax expenses for various international taxes including income tax withholding on intercompany transactions.

In the 2007 Second Quarter, $1.5 million of contingency reserve was released related to income taxes payable in the US states and foreign jurisdictions.
The contingency was recorded at the date of merger. Non-current intangibles were reduced by $1.5 million in 2007 Second Quarter and no tax benefit was recorded.

Net Income (Loss)

Net income for the 2007 Second Quarter totaled $0.3 million compared with $4.6 million in the 2006 Second
Quarter. During the 2007 Second Quarter, we recorded a $0.4 million loss related to the operating results from the Joint Venture and an impairment charge of $4.6 million related to our investment in the Joint Venture which the Company determined to
be other than temporary. Additionally, we recorded a $1.9 million loss on the extinguishment of debt related to the voluntary $30.0 million term loan payment in the 2007 Second Quarter. During 2006 Second Quarter, we incurred $1.9 million of
expenses related to strategic initiatives and $0.1 million related to actions alleging violations of federal legislations involving unsolicited communications.



31



---

##### Table of Contents

Net loss for the 2007 Six Months totaled $16.5 million compared with $16.0 million in the 2006 Six
Months. In the 2007 Six Months, we recorded a $2.4 million loss related to the operating results from the Joint Venture and an impairment charge of $4.6 million related to our investment in the Joint Venture. Additionally, we recorded a $1.9 million
loss on the extinguishment of debt related to the voluntary $30 million term loan payment, recognized an additional benefit of $0.7 million in 2007 Six Months to correct an error in calculating insurance liabilities in prior years and recorded
additional depreciation expense of $2.0 million as discussed above. During the 2006 Six Months, we incurred $1.9 million of expenses related to strategic initiatives and $0.1 million related to actions alleging violations of federal legislation
involving unsolicited communications.

Comprehensive Income (Loss)

Comprehensive loss for the 2007 Second Quarter totaled $0.3 million, a decrease of $2.8 million, compared with comprehensive income of $2.5 million in the 2006 Second Quarter. The decrease was attributable to a
decrease in net income of $4.3 million offset by the change in foreign currency translation compared to the 2006 Second Quarter.

Comprehensive loss for the 2007 Six Months totaled $17.5 million, a decrease of $0.4 million, compared with $17.9 million in the 2006 Six Months. The decrease was primarily attributable to the increase in income from continuing operations
of $0.4 million for the 2007 Six Months.

Centers

Centers results reflect the operations of our bowling centers located in the U.S. and internationally. To facilitate a meaningful comparison, the constant center results reflect 358 centers (345 U.S. Centers and 13
international centers). Constant centers include all centers that have been in operation one full fiscal year as of July 2, 2006.



|                                              |  |                     |       |                     |   |                 |  |                 |       |  |   |      
|--------------------------------------------- |  | ------------------- | ----- | ------------------- | - | --------------- |  | --------------- | ----- |  | - | -----
|(In millions)                                 |  | 2007 Second Quarter |       | 2006 Second Quarter |   | 2007 Six Months |  | 2006 Six Months
|                                              |  |                     |      
|Operating revenue                             |  | $                   | 127.3 |                     | $ | 121.3           |  | $               | 229.2 |  | $ | 217.0
|                                              |  |                     |       |                    
|Operating expenses:                           |  |                     |       |                     |   |                 |  |                 |       |  |   |      
|Cost of goods sold                            |  |                     | 11.2  |                     |   | 11.6            |  |                 | 20.1  |  |   | 20.6 
|Bowling center operating expenses             |  |                     | 83.6  |                     |   | 81.1            |  |                 | 165.7 |  |   | 160.2
|Selling, general, and administrative expenses |  |                     | 7.2   |                     |   | 7.0             |  |                 | 14.5  |  |   | 15.2 
|Asset impairment                              |  |                     |      |                     |   | 0.2             |  |                 |      |  |   | 0.3  
|Depreciation and amortization                 |  |                     | 9.5   |                     |   | 9.5             |  |                 | 21.3  |  |   | 18.2 
|                                              |  |                     |       |                     |   |                 |  |                 |       |  |   |      
|Operating income                              |  | $                   | 15.8  |                     | $ | 11.9            |  | $               | 7.6   |  | $ | 2.5  
|                                              |  |                     |       |                     |   |                 |  |                 |       |  |   |      

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



|                  |  |                 |   |  |                 |  
|----------------- |  | --------------- | - |  | --------------- | -
|                  |  | 2007 Six Months |   |  | 2006 Six Months |  
|                  | 
|Revenue:          |  |                 |   |  |                 |  
|Bowling           |  | 56.3            | % |  | 57.4            | %
|Food and beverage |  | 28.7            | % |  | 27.5            | %
|Ancillary sources |  | 15.0            | % |  | 15.1            | %
|                  |  |                 |   |  |                 |  

2007 Second Quarter compared with 2006 Second Quarter

Centers operating revenue for the 2007 Second Quarter increased $6.0 million, or 5.0%, as compared with the 2006 Second Quarter. U.S. constant center
revenue increased $7.8 million, or 6.7%, primarily due to a combination of increased traffic and higher average prices. Open play revenue reflected growth as a result of increased traffic and more than offset declines in league revenue. This growth
in open play contributed to the increases in food, beverage and shoe revenue. Partially offsetting this increase is a decrease in revenue of $2.2 million attributable to the closure of nine bowling centers since July 3, 2005. U.S. constant
center traffic was relatively flat for the quarter.



32



---

##### Table of Contents

Centers operating expenses increased $2.5 million, or 3.1%. This increase was primarily due to increases
in U.S. constant center operating expenses of $3.1 million, or 4.1%, primarily the result of a 6.3% increase in payroll expenses. Also contributing to this increase was an increase in utility costs. Partially offsetting these increases was a
decrease in expenses of $1.8 million due to closed bowling centers. As a percentage of revenue, Centers operating expenses were 65.9% for the 2007 Second Quarter and 66.9% for the 2006 Second Quarter.

Operating income was $15.8 million in the 2007 Second Quarter versus operating income of $11.9 million in the 2006 Second Quarter primarily due to the
increase in revenue offset by the increases in operating expenses as discussed above.

2007 Six Months compared with 2006 Six Months

Centers operating revenue for the 2007 Six Months increased $12.2 million, or 5.6%, as compared with the 2006 Six Months. U.S. constant center revenue
increased $15.2 million, or 7.3%, due to a combination of increased traffic and higher average prices. Open play revenue reflected growth as a result of increased traffic and more than offset declines in league revenue. This growth in open play
contributed to the increases in food, beverage and shoe revenue. Partially offsetting this increase is a decrease in revenue of $3.0 million attributable to the closure of nine bowling centers since July 3, 2005. U.S. constant center traffic
was relatively flat for the Six Months.

Centers operating expenses increased $5.5 million, or 3.4%. This increase was primarily due to
increases in U.S. constant center operating expenses of $7.5 million, or 5.0%, primarily the result of a 5.9% increase in payroll expenses. Also contributing to this increase was an increase in utility costs earlier in the year. Partially offsetting
these increases was a decrease in expenses of $2.9 million due to closed bowling centers. Additionally, we recorded a benefit of $0.7 million in 2007 First Quarter to correct an error in calculating insurance liabilities in prior years. As a
percentage of revenue, Centers operating expenses were 72.4% for the 2007 Six Months and 74.5% for the 2006 Six Months.

Depreciation and
amortization increased $3.1 million, or 17.0%, attributable to an accumulation of increased capital spending during the last year compared to prior periods. Included in this increase is an additional expense of $2.0 million in 2007 First Quarter to
correct an error in calculating depreciation primarily in Fiscal Year 2006.

Operating income was $7.6 million in the 2007 Six Months
versus operating income of $2.5 million in the 2006 Six Months primarily due to the increase in revenue offset by the increases in operating expenses and depreciation and amortization expense as discussed above.

Holdings

Beginning October 8, 2005, Holdings
consists of our investment in the Joint Venture and ownership of UK BPO, a service company for the exclusive benefit of the Joint Venture. The operations of UK BPO are not material. Our investment in the Joint Venture is accounted for using the
equity method of accounting. We receive financial information from the Joint Venture on a delayed basis and therefore record our share of the income or losses of our investment approximately one quarter in arrears. In this report, we recorded losses
from our investment of $2.5 million including amortization of the investment and elimination of intercompany profit on purchases as Centers continue to purchase from the Joint Venture. There are no comparable prior period amounts for Holdings.

Our investment was recorded initially at cost, and subsequently adjusted for our equity share in net income (loss) and any cash
contributions and distributions. At the time of formation, there was a difference between the carrying amount of this investment on our balance sheet and the underlying equity in net assets of the Joint Venture of $11.3 million which is amortized as
an adjustment and included in net income (loss) of the Joint Venture over 5 years. Centers continues to purchase from the Joint Venture, and eliminates its share of the intercompany profit.

Selected financial results of the Joint Venture as of September 30, 2006 and for the periods July 1, 2006 to September 30, 2006
(Second Quarter) and April 1, 2006 to September are as follows:



|                       |  |                  |        |                 |   |       
|---------------------- |  | ---------------- | ------ | --------------- | - | ------
|                       |  | 2007 2nd Quarter |        | 2007 Six Months
|Results of operations: |  |                  |        |                 |   |       
|Revenue                |  | $                | 49,736 |                 | $ | 90,018
|Gross profit           |  |                  | 14,618 |                 |   | 26,000
|Net loss               |  |                  | 54     |                 |   | 4,512 

Based on a deterioration in the financial results of the Joint Venture during the 2007 Second
Quarter, the Company recorded an impairment charge related to our investment in the Joint Venture of $4,587 because we determined the impairment was other than temporary. The amount of the impairment was determined based on a third party valuation.



33



---

##### Table of Contents

Financial Condition

General

As of December 31, 2006, we had $47.3 million in principal outstanding under our Credit Agreement. No
borrowings were outstanding under the Revolver as of the end of the 2007 Six Months and outstanding standby letters of credit issued under the Revolver totaled $18.8 million, leaving $21.2 million available for additional borrowings or letters of
credit.

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 for the foreseeable future.

Both the Credit Agreement and our indenture dated February 27, 2004 relating to our Subordinated Notes (the Indenture) contain certain restrictive covenants, including covenants requiring the
achievement of certain financial covenants and maximum levels of capital expenditures. We are in compliance with the covenants as of December 31, 2006.

Liquidity

As of December 31, 2006, working capital was $(17.8) million compared with working capital of $16.0 million
at July 2, 2006. This change was primarily attributable to the decrease in cash and Term Loan as a result of a voluntary $30 million payment on the Term Loan during 2007 Second Quarter.

In June 2005, we entered into the Second Amendment to the Credit Agreement, that among other things, provided us with the ability to add a synthetic
letter of credit facility that will allow the issuance of up to $20.0 million of letters of credit, amended certain definitions and covenants to permit certain business combinations and amended certain of the existing financial covenants. The Second
Amendment also permitted the investment in the Joint Venture.

Under our Credit Agreement and Indenture, subject to certain restrictions
and conditions, we may distribute up to 35% of the Net Cash Proceeds (as defined in the Indenture and the Credit Agreement) from the sale of certain International Operations (as defined in the Indenture and the Credit Agreement). The payment of a
dividend is prohibited if the announcement or paying of the dividend results in a change in outlook or downgrading of the Subordinated Notes by Moodys or Standard & Poors. As a condition to paying a dividend, the Indenture also
requires us to first make an offer to purchase to the holders of our Subordinated Notes with an aggregated principal amount equal to 35% of such Net Cash Proceeds at a price equal to 102.0% of the aggregate principal amount being purchased.

Operating Cash Flow



|                                                   |  |                |      |                |   |      |  
|-------------------------------------------------- |  | -------------- | ---- | -------------- | - | ---- | -
|(In millions)                                      |  | 2007 SixMonths |      | 2006 SixMonths |  
|Cash flows from operating activities:              |  |                |      |                |   |      |  
|Before changes in operating assets and liabilities |  | $              | 12.0 |                | $ | 4.3  |  
|Loss on extinguishment of debt                     |  |                | 1.9  |                |   |     |  
|Working capital                                    |  |                | 4.3  |                |   | (9.0 | )
|Discontinued operations (income) loss              |  |                | 0.5  |                |   | 1.2  |  
|                                                   |  |                |      |                |   |      |  
|Total                                              |  | $              | 18.7 |                | $ | (3.5 | )
|                                                   |  |                |      |                |   |      |  

Net cash provided by operating activities was $18.7 million in the 2007 Six Months compared with
net cash used in operating activities of $3.5 million in the 2006 Six Months, an increase of $22.2 million. The increase is the result of the increase in income from continuing operations. Products is included in the 2006 Six Months results and has
more significant working capital requirements compared with Centers.

Investing



|                                                 |  |                |       |   |                |   |       |  
|------------------------------------------------ |  | -------------- | ----- | - | -------------- | - | ----- | -
|(In millions)                                    |  | 2007 SixMonths |       |   | 2006 SixMonths |  
|Cash flows from investing activities:            |  |                |       |   |                |   |       |  
|Purchases of property and equipment              |  | $              | (24.9 | ) |                | $ | (30.6 | )
|Return of cash from equity affiliate             |  |                |      |   |                |   | 17.5  |  
|Proceeds from the sale of property and equipment |  |                | 3.6   |   |                |   | 7.6   |  
|                                                 |  |                |       |   |                |   |       |  
|Total                                            |  | $              | (21.3 | ) |                | $ | (5.5  | )
|                                                 |  |                |       |   |                |   |       |  



34



---

##### Table of Contents

Net cash used in investing activities was $21.3 million in the 2007 Six Months compared with $5.5 million
in the 2006 Six Months. During 2006 Six Months we received $17.5 million return of cash from the Joint Venture at the completion of that transaction and an additional $7.6 million for the sale of two excess properties and other assets. Purchases of
capital expenditures were lower in 2007 Six Months compared to last year. This is a result of timing as opposed to any change in spending trends.

Financing



|                                         |  |                |       |   |                |   |      |  
|---------------------------------------- |  | -------------- | ----- | - | -------------- | - | ---- | -
|(In millions)                            |  | 2007 SixMonths |       |   | 2006 SixMonths |  
|Cash flows from financing activities:    |  |                |       |   |                |   |      |  
|Repayments of debt, net                  |  | $              | (30.3 | ) |                | $ | (0.6 | )
|Payments under capital lease obligations |  |                |      |   |                |   | (0.1 | )
|                                         |  |                |       |   |                |   |      |  
|Total                                    |  | $              | (30.3 | ) |                | $ | (0.7 | )
|                                         |  |                |       |   |                |   |      |  

Net cash used in financing activities was $30.3 million in the 2007 Six Months compared with $0.7
million in the 2006 Six Months. During 2007 Six Months, we made two voluntary payments on the Term Loan totaling $30 million. During 2006 Six Months we made the scheduled terms payments. The final capital lease expired in June 2006 and we no longer
have any capital lease obligations. We continue to hold a mortgage for one center.

Capital Resources

The following table shows our debt balances:



|                                  |  |                  |       |             |   |      
|--------------------------------- |  | ---------------- | ----- | ----------- | - | -----
|(In millions)                     |  | December 31,2006 |       | July 2,2006
|Term Loan                         |  | $                | 47.3  |             | $ | 77.6 
|Subordinated Notes, 10%, due 2010 |  |                  | 123.9 |             |   | 123.9
|Revolver                          |  |                  |      |             |   |     
|Mortgage note                     |  |                  | 2.0   |             |   | 2.0  
|                                  |  |                  |       |             |   |      
|Total debt                        |  | $                | 173.2 |             | $ | 203.5
|                                  |  |                  |       |             |   |      

As of the end of the 2007 Six Months, we had approximately $21.2 million available for borrowing
under the Revolver, with no amounts outstanding and approximately $18.8 million of issued but undrawn standby letters of credit. The Revolver continues to be available for our working capital and general corporate needs, subject to customary
borrowing conditions. In addition, the Second Amendment provides us with the ability to add a synthetic letter of credit.

Both the Credit
Agreement and the Indenture contain certain restrictive covenants, including requiring the Company to achieve certain financial covenants and limiting capital expenditures. We are in compliance with the covenants as of December 31, 2006.
Although we expect to be in compliance, there can be no assurance that we will continue to be in compliance with these covenants.

Asset Sales

From time to time, we sell excess assets including 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. Centers net gains and losses from asset sales are included in bowling center operating expenses on the Consolidated Statements of Operations. The following
table shows our asset sales for the reported periods:



|                                    |  |                     |     |                     |   |      |                 |  |                 |     |  |   |    
|----------------------------------- |  | ------------------- | --- | ------------------- | - | ---- | --------------- |  | --------------- | --- |  | - | ---
|(In millions)                       |  | 2007 Second Quarter |     | 2006 Second Quarter |   |      | 2007 Six Months |  | 2006 Six Months
|                                    |  |                     |    
|U.S. Centers  Asset Sales          |  |                     |     |                     |   |      |                 |  |                 |     |  |   |    
|Proceeds                            |  | $                   | 2.2 |                     | $ | 0.9  |                 |  | $               | 3.6 |  | $ | 1.8
|Gain (loss), net                    |  |                     |    |                     |   | (0.1 | )               |  |                 | 0.1 |  |   | 0.3
|                                    |  |                     |     |                    
|International Centers  Asset Sales |  |                     |     |                     |   |      |                 |  |                 |     |  |   |    
|Proceeds                            |  |                     |    |                     |   | 2.0  |                 |  |                 |    |  |   | 2.0
|Gain (loss), net                    |  |                     |    |                     |   | 0.2  |                 |  |                 |    |  |   | 0.2
|                                    |  |                     |     |                     |   |      |                 |  |                 |     |  |   |    



35



---

##### Table of Contents

During the 2007 Second Quarter, we sold the land and buildings associated with two centers in the U.S.
for net proceeds of $2.2 million. During the 2006 Second Quarter, we sold the land and buildings associated with two centers in the U.S. for net proceeds of $1.5 million with net gains of $0.3 million. In addition, we received net proceeds of $2.0
million and gains of $0.2 million related to the sale of one international center.

For the 2007 Six Months, we sold the land and buildings
associated with four closed centers in the U.S. for net proceeds of $3.5 million and net losses of $0.9 million. During 2006 Six Months, we sold the land and buildings associated with two centers in the U.S. for net proceeds of $1.5 million and net
gains of $0.3 million. In addition, we received net proceeds of $2.0 million and gains of $0.2 million related to the sale of one international center.

Capital Expenditures



|              |  |                |      |                |   |      |  
|------------- |  | -------------- | ---- | -------------- | - | ---- | -
|(In millions) |  | 2007 SixMonths |      | 2006 SixMonths |  
|Centers       |  | $              | 24.9 |                | $ | 30.1 |  
|Products      |  |                |     |                |   | 1.1  |  
|Corporate     |  |                |     |                |   |     |  
|Holdings      |  |                |     |                |   |     |  
|Eliminations  |  |                |     |                |   | (0.6 | )
|              |  |                |      |                |   |      |  
|Total         |  | $              | 24.9 |                | $ | 30.6 |  
|              |  |                |      |                |   |      |  

Capital expenditures decreased $5.7 million in the 2007 Six Months compared to the 2006 Six Months
primarily due to the timing of projects. We continue to invest in our high performance centers as well as our conversions to 300 Centers.

Seasonality
and Market Development Cycles

Our 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.

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, actions by foreign
governments, and foreign tax law changes. In addition, local currency devaluation negatively impacts the translation of operating results from our international bowling centers. Since we sold our bowling center operations in the United Kingdom and
Australia, excluding our investment in the Joint Venture, our international operations will be less subject to the risks inherent in operating internationally.

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 2007 Six
Months.

Critical Accounting Estimates

In preparing the consolidated financial statements, GAAP requires management to select and apply accounting policies that involve estimates and judgment. The following accounting estimates may require a higher degree of judgment or involve
amounts that could have a material impact on the consolidated financial statements. The development and selection of the critical accounting estimates, and the related disclosure below have been reviewed with the Audit Committee of the board of
managers of Kingpin Holdings.

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 grouping may not be recoverable. Factors that are considered in
deciding when to perform an impairment review include significant under-performance of a center in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. It is
not uncommon to close centers. Recoverability of an asset that



36



---

##### Table of Contents

will continue to be used in operations is measured by comparing the carrying amount of the asset with the related total future net cash flows. If an
assets carrying value is not recoverable through its 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.

Self Insurance, Litigation and Claims

We self-insure certain risks up to established limits, including general liability, workers compensation and health care. 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. While we believe these estimates are
reasonable based on the information currently available, if actual trends, including the severity or frequency of claims, the development of those claims or fluctuations in premiums or other costs, differ from our estimate, our results of operations
could be impacted.

Deferred Tax Assets

Deferred tax assets and liabilities are recognized for the tax consequences attributable to temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. Management periodically reviews
our gross deferred tax assets to determine if it is more likely than not those 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 SFAS 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 losses and uncertain future
earnings from operations, management concluded that we more likely than not will not realize the benefit of certain 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 first reduce intangibles or increase or decrease income tax expense.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report may 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 SEC 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;
| | - |  | -------------------------------------------------------------------------



| |  |  | the success of our investment in the Joint Venture;
| | - |  | ---------------------------------------------------



| |  |  | 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.
| | - |  | ----------------------------------------------------------------------------------------



37



---

##### Table of Contents

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 historical decline in league traffic and our difficulty in increasing traffic;
| | - |  | ----------------------------------------------------------------------------------



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



| |  |  | 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;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the effect of our prior Chapter 11;
| | - |  | -----------------------------------



| |  |  | 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.



|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 we consider the use of interest rate cap agreements and exchange contracts. At December 31, 2006, no interest rate cap agreements or exchange contracts were outstanding. Management periodically reviews its exposure to
changes in interest rates and may enter into an interest rate cap agreement as it deems appropriate. Foreign currency exchange rates also impact the translation of operating results from the international operations.

Management believes that the foregoing risks are lessened with respect to our on-going Centers business in the future but they will continue to be
applicable to the operations of the Joint Venture.

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. We estimate that a 200 basis point increase in our average variable interest rate would
result in additional interest expense totaling approximately $0.4 million.

The following table provides information about our fixed and
variable-rate debt at December 31, 2006, weighted average interest rates and respective maturity dates (in millions).



38



---

##### Table of Contents

|                |  |                |       |                              |       |   |                   |   |                              |  |      |  
|--------------- |  | -------------- | ----- | ---------------------------- | ----- | - | ----------------- | - | ---------------------------- |  | ---- | -
|Maturity Date   |  | FixedRate Debt |       | WeightedAverageInterest Rate |       |   | VariableRate Debt |   | WeightedAverageInterest Rate | 
|March 1, 2010   |  | $              | 123.9 |                              | 10.00 | % |                   |   |                             |  |     |  
|August 27, 2009 |  |                |      |                              |      |   |                   | $ | 47.3                         |  | 8.41 | %

The fair value of the Term Loan and the Subordinated Notes at December 31, 2006 was
approximately $47.3 million and $128.9 million, respectively.



|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 principal executive officer and the principal financial officer, of the effectiveness of our disclosure
controls and procedures. Based on that evaluation, our management, including the principal executive and 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.

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 and employment claims. The Company has insurance to cover general liability and workers compensation
claims. The insurance is subject to a self insured retention. In some actions, plaintiffs request punitive or other damages that may not be covered by insurance. In managements opinion, no claims or actions in which we are involved are
expected to have a material adverse impact on our financial position or results of operations.

In July 2005, the Australian state of
Western Australia assessed Worldwide approximately $0.3 million for stamp taxes relating to the Merger. The assessment claims that the Merger was a purchase of a land-rich company, which Western Australian law generally provides is a company whose
real estate constitutes greater than 60% of all its assets (other than excluded assets). We paid the assessment under protest and filed an objection. The objection is an internal review process by the department of revenue of Western Australia. In
March 2006, the Australian state of South Australia assessed our former subsidiary that operated our bowling centers in Australia (BCO Australia) $405,000 for stamp tax relating to the Merger. Under the stock purchase agreement by which
we sold our interest in BCO Australia in February 2005, we were responsible for this assessment. We paid this assessment under protest and filed an objection. The objection is an internal review process by the department of revenue of South
Australia. If the assessments are not reversed, management will consider appeals. In early 2006, the Australian state of New South Wales has also made inquiries about the applicability of its land-rich laws to the Merger but has not made an
assessment.

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. From time to time, we are subject to claims relating to the violations of 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.

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 would be involved, are 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 providing our services, or otherwise adversely affect the demand for our services.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

There have been no material changes
with respect to the risk factors previously disclosed in our Form 10-K for the fiscal year ended July 2, 2006.



39



---

##### Table of Contents

|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

None.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K
|------- | --------------------------------



|(a) | Exhibits
|--- | --------



|     |  |                                                                                                                                                                                                                    
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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).



|(b) | Reports on Form 8-K
|--- | -------------------

We did not file Form 8-K during the
second quarter of 2007.



40



---

##### 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)

Date: February 16, 2007



|                                          
|------------------------------------------
|/s/ William A. McDonnell                  
|William A. McDonnell                      
|Vice President and Chief Financial Officer



41