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 April 1, 2007

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 April 1, 2007, 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.

AMF BOWLING WORLDWIDE, INC.

TABLE OF CONTENTS

		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	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3	Defaults Upon Senior Securities	37
Item 4.	Submission of Matters to a Vote of Security Holders	37
Item 5.	Other Information	37
Item 6.	Exhibits	37
Signatures		38

2

AMF BOWLING WORLDWIDE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

PART I

ITEM 1. FINANCIAL STATEMENTS

(In thousands, except share data)	April 1, 2007			July 2, 2006
Assets
Current assets:
Cash and cash equivalents	$	57,487		$	57,475
Accounts and notes receivable, net of allowance for doubtful accounts of $125 and $203, respectively		3,704			5,332
Inventories, net		4,745			4,709
Prepaid expenses and other current assets		8,685			10,091
Total current assets		74,621			77,607
Property and equipment, net		228,727			228,865
Investment in equity affiliate		18,758			31,104
Other assets		13,365			19,376
Total assets	$	335,471		$	356,952
Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	9,139		$	8,873
Accrued expenses and other liabilities		59,365			51,921
Current portion of long-term debt		486			794
Total current liabilities		68,990			61,588
Long-term debt, less current portion		172,564			202,708
Liabilities, subject to resolution		103			103
Other liabilities		9,871			10,024
Total liabilities		251,528			274,423
Commitments and contingencies
Stockholder’s equity:
Common stock ($0.01 par value, 1,000 shares authorized and outstanding)		—			—
Paid-in capital		133,860			133,716
Accumulated deficit		(42,335	)		(45,575	)
Accumulated other comprehensive loss		(7,582	)		(5,612	)
Total stockholder’s equity		83,943			82,529
Total liabilities and stockholder’s equity	$	335,471		$	356,952

See accompanying notes to condensed consolidated financial statements.

3

AMF BOWLING WORLDWIDE, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands)	2007 Third Quarter			2006 Third Quarter			2007 Nine Months			2006 Nine Months
Operating revenue	$	151,697		$	147,766		$	382,263		$	397,527
Operating expenses:
Cost of goods sold		12,995			14,013			33,110			61,232
Bowling center operating expenses		88,685			88,897			254,377			249,068
Selling, general and administrative expenses		10,724			9,130			30,661			36,454
Asset impairment		467			—			467			606
Depreciation and amortization		7,979			8,889			29,368			29,029
Total operating expenses		120,850			120,929			347,983			376,389
Operating income		30,847			26,837			34,280			21,138
Non-operating (income) expenses:
Interest expense		5,082			5,718			16,238			16,776
Interest income		(551	)		(487	)		(1,485	)		(1,074	)
Loss on extinguishment of debt		—			—			1,907			—
Loss from equity affiliate		3,146			3,706			5,627			3,706
Impairment of equity method investment		—			—			4,587			—
Other (income) expense, net		5			(41	)		74			(715	)
Total non-operating expenses		7,682			8,896			26,948			18,693
Income from continuing operations before income taxes		23,165			17,941			7,332			2,445
Provision for income taxes		3,293			2,847			3,414			2,183
Income from continuing operations		19,872			15,094			3,918			262
Discontinued operations:
Income (loss) from discontinued operations, net of tax		(143	)		50			(271	)		194
Gain (loss) on disposal, net of tax		(5	)		682			(407	)		(637	)
Income (loss) from discontinued operations		(148	)		732			(678	)		(443	)
Net income (loss)	$	19,724		$	15,826		$	3,240		$	(181	)

See accompanying notes to condensed consolidated financial statements.

4

AMF BOWLING WORLDWIDE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)	2007 Nine Months			2006 Nine Months
Operating activities:
Net income (loss)	$	3,240		$	(181	)
Less: Loss from discontinued operations		(678	)		(443	)
Income from continuing operations		3,918			262
Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation and amortization		29,368			29,029
Asset impairment		467			606
Loss on extinguishment of debt		1,907			—
Gain on the sale of property and equipment, net		(481	)		(280	)
Loss from equity affiliate		5,627			3,706
Impairment of equity method investment		4,587			—
Stock compensation expense		144			—
Changes in assets and liabilities:
Accounts and notes receivable, net		1,867			(2,556	)
Inventories		(36	)		(5,217	)
Other assets		3,317			3,063
Accounts payable and accrued expenses		3,993			2,927
Income taxes payable		4,927			(3,484	)
Other long-term liabilities		(481	)		(670	)
Net cash provided by operating activities from continuing operations		59,124			27,386
Investing activities:
Purchases of property and equipment		(32,670	)		(38,260	)
Return of cash from equity affiliate		—			17,531
Proceeds from sale of property and equipment		4,049			9,546
Net cash used in investing activities from continuing operations		(28,621	)		(11,183	)
Financing activities:
Payments of long-term debt		(30,452	)		(753	)
Payments under capital lease obligations		—			(213	)
Net cash used in financing activities from continuing operations		(30,452	)		(966	)
Effect of exchange rates on cash		(39	)		(1,015	)
Net cash used in operating activities from discontinued operations		(246	)		(28	)
Net cash provided by (used in) investing activities from discontinued operations		246			(149	)
Net increase in cash and cash equivalents		12			14,045
Cash and cash equivalents at beginning of period		57,475			45,254
Cash and cash equivalents at end of period	$	57,487		$	59,299

See accompanying notes to condensed consolidated financial statements.

5

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 April 1, 2007, 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 seven centers to remodel, upgrade and operate as 300 Centers, six 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.

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 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.

6

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”). Third quarters 2007 and 2006 ended on April 1, 2007 and April 2, 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 nine months ended April 1, 2007 and April 2, 2006, we recorded losses from our equity affiliate of $5.6 million and $3.7 million respectively, 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 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. The basis difference as of April 1, 2007 is $4.9 million which will be amortized over the remaining useful life. 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 nine months ended April 1, 2007 were $16.9 million. Total payables to the Joint Venture at April 1, 2007 were $1.4 million. The Joint Venture has a December 31^st year end for financial reporting purposes.

7

Selected financial results of the Joint Venture are as follows:

	December 31, 2006			December 31, 2005
Financial position:
Current assets	$	68,453		$	64,205
Non-current assets		31,753			37,604
Total assets		100,206			101,809
Current liabilities		30,491			26,829
Non-current liabilities		81,931			66,680
Total liabilities		112,422			93,509
Stockholders’ equity (deficit)	$	(12,216	)	$	8,300

The following definitions are used in this report related to the Joint Venture results of operations:

Period	Referred to as
Results from October 1, 2006 through December 31, 2006	“Three Months Ended 12/31/06”
Results from October 8, 2005 through December 31, 2005	“Three Months Ended 12/31/05”
Results from April 1, 2006 through December 31, 2006	“Nine Months Ended 12/31/06”
Results from October 8, 2005 through December 31, 2005	“Nine Months Ended 12/31/05”

	Three Months Ended 12/31/2006		Three Months Ended 12/31/2005		Nine Months Ended 12/31/2006		Nine Months Ended 12/31/2005
Results of Operations:
Revenue	$	45,881	$	41,297	$	135,898	$	41,297
Gross Profit		9,313		9,927		35,313		9,927
Net Loss		6,623		5,390		11,135		5,390

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. The amount of the impairment was determined based on a third party valuation at that time.

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

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 January 1, 2007 through April 1, 2007	“2007 Third Quarter”
Results from January 2, 2006 through April 2, 2006	“2006 Third Quarter”
Results from July 3, 2006 through April 1, 2007	“2007 Nine Months”
Results from July 4, 2005 through April 2, 2006	“2006 Nine 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. During the second quarter of 2007, the Company reclassified the long-term portion of the self insurance reserves 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.

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 Third Quarter primarily related to settlements related to the sale of our billiards division. Results for 2006 Third 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 Third Quarter			2006 Third Quarter			2007 Nine Months			2006 Nine Months
Revenue	$	—		$	—		$	—		$	4,830
Income (loss) from operations, pretax		(143	)		50			(271	)		194
Income (loss) from operations, after tax		(143	)		50			(271	)		194
Gain (loss) on disposal, pretax		(5	)		262			(429	)		(1,057	)
Benefit for income taxes		—			(420	)		(22	)		(420	)
Gain (loss) on disposal, after tax		(5	)		682			(407	)		(637	)
Income (loss) from discontinued operations	$	(148	)	$	732		$	(678	)	$	(443	)

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.

9

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 April 1, 2007, there were 436,888 options outstanding under the Option Plan, of which 104,466 were vested and exercisable. As of April 1, 2007, a total of 599,207 units remained available under the Option Plan. During 2007 Third Quarter, the Company issued 20,000 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 February 8, 2007, Kingpin granted 20,000 options to purchase common units of Kingpin, at an exercise price of $11.27 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 Nine 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 dividend 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 $144 and $74 was recognized for share-based compensation during the 2007 Nine Months and 2007 Third Quarter, respectively, and is included in selling, general and administrative expenses.

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

(options in thousands)	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at July 3, 2006	674		$	11.77
Granted	225			10.38
Exercised	—			—
Forfeited/Canceled	(45	)		10.60
Outstanding at April 1, 2007	854		$	11.46	7.9	$	1,077
Exercisable at April 1, 2007	418		$	11.97	7.2	$	539
Expected to vest in future periods (a)	406		$	10.97	8.6	$	501

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

The weighted average grant-date fair value of options granted during 2007 Third Quarter was $4.70. As of April 1, 2007, $776 of total unrecognized compensation cost related to previously granted stock options is expected to be recorded over a weighted-average period of 2.5 years.

NOTE 5. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) was $18,789 for the 2007 Third Quarter, $1,270 for the 2007 Nine Months, $16,127 for the 2006 Third Quarter and $(70) for the 2006 Nine Months. Accumulated other comprehensive loss of $7,582 at April 1, 2007 and $5,612 at July 2, 2006 is included in stockholder’s equity and consists of a foreign currency translation adjustment and minimum pension liability.

10

NOTE 6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of:

	April 1, 2007			July 2, 2006
Land	$	23,481		$	24,709
Buildings and improvements		129,483			120,432
Equipment, furniture and fixtures		179,787			169,877
Other		13,041			3,208
		345,792			318,226
Less accumulated depreciation		(117,065	)		(89,361	)
Property and equipment, net	$	228,727		$	228,865

Depreciation expense related to property and equipment was $7,949 for the 2007 Third Quarter and $29,256 for the 2007 Nine Months, including the adjustment discussed in Note 2. Depreciation expense related to property and equipment was $8,843 for the 2006 Third Quarter and $28,732 for the 2006 Nine Months.

NOTE 7. SUPPLEMENTAL CASH FLOW INFORMATION

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

	2007 Nine Months		2006 Nine Months
Cash paid during the period for:
Interest	$	17,026	$	16,408
Income taxes		623		2,943

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.

Long-Term Debt Summary

Our long-term debt consisted of:

	April 1, 2007			July 2, 2006
Term Loan	$	47,171		$	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		1,964			1,974
Total debt		173,050			203,502
Current maturities		(486	)		(794	)
Total long-term debt	$	172,564		$	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 April 1, 2007, we owed $47,171 on the Term Loan. No borrowings were outstanding under the Revolver as of the end of the 2007 Third Quarter and outstanding standby letters of credit issued under the Revolver totaled $17,904, leaving $22,096 available for additional borrowings or letters of credit. Our aggregate letter of credit obligations outstanding under the Credit Agreement may

11

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 the second quarter of 2007, 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. As of April 1, 2007, 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 April 1, 2007 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.

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 Third Quarter		2006 Third Quarter			2007 Nine Months		2006 Nine Months
U.S. – Asset Sales
Proceeds	$	453	$	1,954		$	4,046	$	3,771
Gain (loss), net		391		(3	)		478		292
International – Asset Sales
Proceeds		—		—			3		1,998
Gain, net		—		—			3		171

During the 2007 Third Quarter, we sold the land and buildings associated with one closed center in the U.S. for net proceeds of $0.5 million and a net gain of $0.5 million. During the 2006 Third Quarter, we sold the land and buildings associated with three centers in the U.S. for net proceeds of $1.9 million.

For the 2007 Nine Months, we sold the land and buildings associated with five closed centers in the U.S. for net proceeds of $4.0 million and net gains of $0.4 million. During the 2006 Nine Months, we sold the land and buildings associated with five centers in the U.S. for net proceeds of $3.4 million and net gains of $0.4 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.

Financing Commitment

In May 2007, the Company received a financing commitment from Credit Suisse Securities (USA) LLC to refinance its existing indebtedness. The refinancing is expected to consist of a $270 million first-lien credit facility, consisting of a $60 million revolving loan facility and a $210.0 million six-year term loan and a $105.0 million six and a half year second-lien credit facility. The net proceeds are planned to be used to repay existing indebtedness, related prepayment fees, provide for a dividend and growth capital to support the Company’s business plan. The Company expects the refinancing to close during June 2007. Since all of the terms of the credit facilities are currently under negotiation, there can be no assurance that the final terms of the credit facilities will be as described above.

12

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 Company’s portion of results and balances from the Joint Venture. Such amounts are eliminated and not presented in our condensed 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 Third Quarter
(In millions)	Revenue from unaffiliated customers			Intersegment sales			Operating Income (loss)			Total assets			Depreciation and amortization			Capital expenditures
Centers:
U.S	$	145.7		$	—		$	32.0		$	254.4		$	7.8		$	7.6
International		5.1			—			1.0			14.8			0.3			0.2
Subtotal		150.8			—			33.0			269.2			8.1			7.8
Holdings		46.8			4.5			(3.3	)		136.1			1.3			0.4
Equity method eliminations		(45.9	)		(4.5	)		3.3			(100.2	)		(1.3	)		(0.4	)
Subtotal		0.9			—			—			35.9			—			—
Corporate		—			—			(2.3	)		22.8			0.1			—
Eliminations		—			—			0.1			7.6			(0.2	)		—
Total	$	151.7		$	—		$	30.8		$	335.5		$	8.0		$	7.8
	2006 Third Quarter
(In millions)	Revenue from unaffiliated customers			Intersegment sales			Operating Income (loss)			Total assets			Depreciation and amortization			Capital expenditures
Centers:
U.S.	$	142.2		$	—		$	28.8		$	256.0		$	8.6		$	6.5
International		4.9			—			0.8			11.8			0.2			0.2
Subtotal		147.1			—			29.6			267.8			8.8			6.7
Holdings		36.6			5.4			(3.0	)		151.9			2.1			0.3
Equity method eliminations		(35.9	)		(5.4	)		2.9			(101.8	)		(2.1	)		(0.3	)
Subtotal		0.7			—			(0.1	)		50.1			—			—
Corporate		—			—			(2.8	)		36.7			0.2			1.0
Eliminations		—			—			0.1			10.7			(0.1	)		(0.1	)
Total	$	147.8		$	—		$	26.8		$	365.3		$	8.9		$	7.6

13

	2007 Nine Months
(In millions)	Revenue from unaffiliated customers			Intersegment sales			Operating Income (loss)			Total assets			Depreciation and amortization			Capital expenditures
Centers:
U.S.	$	366.0		$	—		$	38.8		$	254.4		$	28.6		$	32.1
International		14.0			—			1.8			14.8			0.7			0.6
Subtotal		380.0			—			40.6			269.2			29.3			32.7
Holdings		138.2			16.4			(3.0	)		136.1			4.4			1.5
Equity method eliminations		(135.9	)		(16.4	)		2.6			(100.2	)		(4.4	)		(1.5	)
Subtotal		2.3			—			(0.4	)		35.9			—			—
Corporate		—			—			(6.3	)		22.8			0.5			—
Eliminations		—			—			0.4			7.6			(0.4	)		—
Total	$	382.3		$	—		$	34.3		$	335.5		$	29.4		$	32.7
	2006 Nine Months
(In millions)	Revenue from unaffiliated customers			Intersegment sales			Operating Income (loss)			Total assets			Depreciation and amortization			Capital expenditures
Centers:
U.S.	$	349.9		$	—		$	29.8		$	256.0		$	26.3		$	36.2
International		14.1			—			2.3			11.8			0.7			0.6
Subtotal		364.0			—			32.1			267.8			27.0			36.8
Products		32.1			7.7			(1.7	)		—			1.6			1.1
Holdings		37.3			5.4			(2.9	)		151.9			2.1			0.3
Equity method eliminations		(35.9	)		(5.4	)		2.9			(101.8	)		(2.1	)		(0.3	)
Subtotal		1.4			—			—			50.1			—			—
Corporate		—			—			(9.1	)		36.7			0.9			1.0
Eliminations		—			(7.7	)		(0.2	)		10.7			(0.5	)		(0.6	)
Total	$	397.5		$	—		$	21.1		$	365.3		$	29.0		$	38.3

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 Quantifying 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 the 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.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“FAS 157”). FAS 157 defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. FAS 157 is applicable whenever another accounting pronouncement requires or permits assets and liabilities to be measured at fair value. FAS 157 does not expand or require any new fair value measures, however the application of this statement may change current practice. The requirements of FAS 157 are effective for our fiscal year beginning June 30, 2008. We are in the process of evaluating this guidance and therefore have not yet determined the impact that FAS 157 will have on our financial statements upon adoption.

14

In September 2006, the FASB issued SFAS 158 (“FAS 158”), Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS 158 requires an employer that sponsors one or more single-employer defined benefit plans to (a) recognize the overfunded or underfunded status of a benefit plan in its statement of financial position, (b) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to SFAS 87, Employers’ Accounting for Pensions, or SFAS 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, (c) measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end, and (d) disclose in the notes to financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. The requirements of FAS 158 are effective for our fiscal year ending July 1, 2007. We are in the process of evaluating this guidance and therefore have not yet determined the impact that FAS 158 will have on our financial statements upon adoption.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115 (“FAS 159”). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Entities that elect the fair value option will report unrealized gains and losses in earnings at each subsequent reporting date. The fair value option may be elected on an instrument-by-instrument basis, with few exceptions. FAS 159 also establishes presentation and disclosure requirements to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities. The requirements of FAS 159 are effective for our fiscal year beginning June 30, 2008. We are in the process of evaluating this guidance and therefore have not yet determined the impact that FAS 159 will have on our financial statements upon adoption.

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 April 1, 2007 and July 2, 2006, condensed consolidating statements of operations for the 2007 Third Quarter, 2007 Nine Months, 2006 Third Quarter and 2006 Nine Months and cash flows for the 2007 Nine Months and 2006 Nine 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.

15

Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Balance Sheet

	April 1, 2007
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	45,994		$	8,794		$	2,699		$	—		$	57,487
Accounts and notes receivable, net		343			2,814			547			—			3,704
Accounts and notes receivable – intercompany		18,234			141,108			(5,435	)		(153,907	)		—
Inventories, net		—			4,338			407			—			4,745
Prepaid expenses and other current assets		(7,996	)		15,859			585			237			8,685
Total current assets		56,575			172,913			(1,197	)		(153,670	)		74,621
Property and equipment, net		8,124			214,063			6,540			—			228,727
Investment in subsidiaries		365,818			(14,040	)		—			(351,778	)		—
Investment in equity affiliate		1,325			17,433			—			—			18,758
Other assets		4,124			86,997			(1,364	)		(76,392	)		13,365
Total assets	$	435,966		$	477,366		$	3,979		$	(581,840	)	$	335,471
Liabilities and Stockholder’s Equity
Current liabilities:
Accounts payable	$	36		$	7,944		$	1,159		$	—		$	9,139
Accrued expenses and other liabilities		5,425			51,659			2,281			—			59,365
Current portion of long-term debt		486			—			—			—			486
Accounts and notes payable – intercompany		153,907			—			—			(153,907	)		—
Total current liabilities		159,854			59,603			3,440			(153,907	)		68,990
Long-term debt, less current portion		170,600			1,964			—			—			172,564
Liabilities, subject to resolution		—			103			—			—			103
Other liabilities		21,569			61,479			2,978			(76,155	)		9,871
Total liabilities		352,023			123,149			6,418			(230,062	)		251,528
Stockholder’s equity:
Common stock		—			—			—			—			—
Paid-in capital		133,860			405,049			10,344			(415,393	)		133,860
Accumulated earnings (deficit)		(42,335	)		(45,035	)		(11,031	)		56,066			(42,335	)
Accumulated other comprehensive income (loss)		(7,582	)		(5,797	)		(1,752	)		7,549			(7,582	)
Total stockholder’s equity		83,943			354,217			(2,439	)		(351,778	)		83,943
Total liabilities and stockholder’s equity	$	435,966		$	477,366		$	3,979		$	(581,840	)	$	335,471

16

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 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 earnings (deficit)		(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

17

Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations

	2007 Third Quarter
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Operating revenue	$	—		$	145,673		$	6,024		$	—		$	151,697
Operating expenses:
Cost of goods sold		—			12,255			740			—			12,995
Bowling center operating expenses		—			85,570			3,115			—			88,685
Selling, general and administrative expenses		2,170			7,768			786			—			10,724
Asset Impairment		—			467			—			—			467
Depreciation and amortization		127			7,767			205			(120	)		7,979
Total operating expenses		2,297			113,827			4,846			(120	)		120,850
Operating income (loss)		(2,297	)		31,846			1,178			120			30,847
Non-operating (income) expenses:
Interest expense		5,039			43			—			—			5,082
Interest income		(383	)		(154	)		(14	)		—			(551	)
(Income) loss from equity affiliate		—			3,530			—			(384	)		3,146
Other (income) expense		(15,143	)		14,714			433			1			5
Total non-operating (income) expenses		(10,487	)		18,133			419			(383	)		7,682
Income from continuing operations before income taxes and equity in income (loss) of subsidiaries		8,190			13,713			759			503			23,165
Provision for income taxes		62			3,115			116			—			3,293
Income from continuing operations		8,128			10,598			643			503			19,872
Discontinued operations:
Loss from discontinued operations, net of tax		—			(143	)		—			—			(143	)
Loss on disposal, net of tax		—			(5	)		—			—			(5	)
Loss from discontinued operations		—			(148	)		—			—			(148	)
Equity in income (loss) of subsidiaries		11,596			—			—			(11,596	)		—
Net income (loss)	$	19,724		$	10,450		$	643		$	(11,093	)	$	19,724

18

Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations

	2007 Nine Months
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Operating revenue	$	—		$	365,538		$	16,725		$	—		$	382,263
Operating expenses:
Cost of goods sold		—			30,957			2,153			—			33,110
Bowling center operating expenses		—			245,648			8,729			—			254,377
Selling, general and administrative expenses		5,842			22,253			2,566			—			30,661
Asset Impairment		—			467			—			—			467
Depreciation and amortization		483			28,657			594			(366	)		29,368
Total operating expenses		6,325			327,982			14,042			(366	)		347,983
Operating income (loss)		(6,325	)		37,556			2,683			366			34,280
Non-operating (income) expenses:
Interest expense		16,108			130			—			—			16,238
Interest income		(1,184	)		(259	)		(42	)		—			(1,485	)
Loss on extinguishment of debt		1,907			—			—			—			1,907
(Income) loss from equity affiliate		—			7,004			—			(1,377	)		5,627
Impairment of equity method investment		—			4,587			—			—			4,587
Other (income) expense		(25,512	)		24,769			802			15			74
Total non-operating (income) expenses		(8,681	)		36,231			760			(1,362	)		26,948
Income from continuing operations before income taxes and equity in income (loss) of subsidiaries		2,356			1,325			1,923			1,728			7,332
Provision for income taxes		145			2,889			380			—			3,414
Income (loss) from continuing operations		2,211			(1,564	)		1,543			1,728			3,918
Discontinued operations:
Loss from discontinued operations, net of tax		—			(271	)		—			—			(271	)
Loss on disposal, net of tax		—			(407	)		—			—			(407	)
Loss from discontinued operations		—			(678	)		—			—			(678	)
Equity in income (loss) of subsidiaries		1,029			—			—			(1,029	)		—
Net income (loss)	$	3,240		$	(2,242	)	$	1,543		$	699		$	3,240

19

Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations

	2006 Third Quarter
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Operating revenue	$	—		$	143,435		$	4,331		$	—		$	147,766
Operating expenses:
Cost of goods sold		—			13,338			675			—			14,013
Bowling center operating expenses		—			86,357			2,540			—			88,897
Selling, general and administrative expenses		2,569			6,126			435			—			9,130
Depreciation and amortization		252			8,564			215			(142	)		8,889
Total operating expenses		2,821			114,385			3,865			(142	)		120,929
Operating income (loss)		(2,821	)		29,050			466			142			26,837
Non-operating (income) expenses:
Interest expense		5,673			13			35			(3	)		5,718
Interest income		(355	)		(101	)		(34	)		3			(487	)
Loss from equity affiliate		—			3,307			—			399			3,706
Other (income) expense, net		(7,860	)		7,632			198			(11	)		(41	)
Total non-operating (income) expenses		(2,542	)		10,851			199			388			8,896
Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries		(279	)		18,199			267			(246	)		17,941
Provision for income taxes		2			2,196			649			—			2,847
Income (loss) from continuing operations before equity in income (loss) of subsidiaries		(281	)		16,003			(382	)		(246	)		15,094
Discontinued operations:
Income from discontinued operations, net of tax		—			50			—			—			50
Gain on disposal, net of tax		—			682			—			—			682
Income from discontinued operations		—			732			—			—			732
Equity in income (loss) of subsidiaries		16,107			—			—			(16,107	)		—
Net income (loss)	$	15,826		$	16,735		$	(382	)	$	(16,353	)	$	15,826

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Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statements of Operations

	2006 Nine Months
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Operating revenue	$	—		$	353,060		$	52,189		$	(7,722	)	$	397,527
Operating expenses:
Cost of goods sold		—			33,221			33,602			(5,591	)		61,232
Bowling center operating expenses		—			242,527			8,072			(1,531	)		249,068
Selling, general and administrative expenses		7,787			19,846			8,821			—			36,454
Asset impairment		—			259			347			—			606
Depreciation and amortization		944			26,361			2,150			(426	)		29,029
Total operating expenses		8,731			322,214			52,992			(7,548	)		376,389
Operating income (loss)		(8,731	)		30,846			(803	)		(174	)		21,138
Non-operating (income) expenses:
Interest expense		16,633			111			273			(241	)		16,776
Interest income		(999	)		(249	)		(67	)		241			(1,074	)
Loss from equity affiliate		—			3,307			—			399			3,706
Other (income) expense, net		(18,762	)		18,135			(77	)		(11	)		(715	)
Total non-operating (income) expenses		(3,128	)		21,304			129			388			18,693
Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries		(5,603	)		9,542			(932	)		(562	)		2,445
Provision for income taxes		73			1,321			789			—			2,183
Income (loss) from continuing operations before equity in income (loss) of subsidiaries		(5,676	)		8,221			(1,721	)		(562	)		262
Discontinued operations:
Income from discontinued operations, net of tax		—			194			—			—			194
Loss on disposal, net of tax		—			(637	)		—			—			(637	)
Loss from discontinued operations		—			(443	)		—			—			(443	)
Equity in income (loss) of subsidiaries		5,495			—			—			(5,495	)		—
Net income (loss)	$	(181	)	$	7,778		$	(1,721	)	$	(6,057	)	$	(181	)

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Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows

	2007 Nine Months
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by operating activities from continuing operations	$	22,790		$	34,346		$	1,949		$	39		$	59,124
Cash flows from investing activities:
Purchases of property and equipment		(4	)		(32,056	)		(610	)		—			(32,670	)
Proceeds from the sale of:
Property and equipment		—			4,046			3			—			4,049
Net cash used in investing activities from continuing operations		(4	)		(28,010	)		(607	)		—			(28,621	)
Cash flows from financing activities:
Payments of long-term debt		(30,442	)		(10	)		—			—			(30,452	)
Net cash used in financing activities from continuing operations		(30,442	)		(10	)		—			—			(30,452	)
Effect of exchange rates on cash		—			—			—			(39	)		(39	)
Net cash used in operating activities from discontinued operations		—			(246	)		—			—			(246	)
Net cash provided by investing activities from discontinued operations		—			246			—			—			246
Net increase (decrease) in cash		(7,656	)		6,326			1,342			—			12
Cash and cash equivalents at beginning of period		53,650			2,468			1,357			—			57,475
Cash and cash equivalents at end of period	$	45,994		$	8,794		$	2,699		$	—		$	57,487

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Condensed Consolidating Financial Statements

AMF Bowling Worldwide, Inc.

Condensed Consolidating Statement of Cash Flows

	2006 Nine Months
	Worldwide			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided by (used in) operating activities from continuing operations	$	(4,502	)	$	30,166		$	1,307		$	415		$	27,386
Cash flows from investing activities:
Purchases of property and equipment		(976	)		(36,167	)		(1,717	)		600			(38,260	)
Proceeds from:
Return of cash from equity affiliate		17,531			—			—			—			17,531
Sale of property and equipment		—			9,525			21			—			9,546
Net cash provided by (used in) investing activities from continuing operations		16,555			(26,642	)		(1,696	)		600			(11,183	)
Cash flows from financing activities:
Payments of long-term debt		(753	)		—			—			—			(753	)
Payments under capital lease obligations		—			(213	)		—			—			(213	)
Net cash used in financing activities from continuing operations		(753	)		(213	)		—			—			(966	)
Effect of exchange rates on cash		—			—			—			(1,015	)		(1,015	)
Net cash used in operating activities from discontinued operations		—			(28	)		—			—			(28	)
Net cash used in investing activities from discontinued operations		—			(149	)		—			—			(149	)
Net increase (decrease) in cash		11,300			3,134			(389	)		—			14,045
Cash and cash equivalents at beginning of period		39,537			4,045			1,672			—			45,254
Cash and cash equivalents at end of period	$	50,837		$	7,179		$	1,283		$	—		$	59,299

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

Contents:

This MD&A includes the following:

• Overview

• Joint Venture

• Fiscal Year

• Accounting for the Joint Venture

• Merger

• Consolidated Results

• 2007 Third Quarter compared with 2006 Third Quarter

• 2007 Nine Months compared with 2006 Nine Months

• Liquidity

• Capital Resources

• Asset Sales

• Capital Expenditures

• Seasonality and Market Development Cycles

• Impact of Inflation

• Critical Accounting Estimates

• 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 April 1, 2007, 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 seven centers to remodel, upgrade and operate as 300 Centers, six 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.

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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.

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. Third quarters 2007 and 2006 ended on April 1, 2007 and April 2, 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 Nine Months and 2006 Nine Months, we recorded losses from our equity affiliate of $5.6 million and $3.7 million respectively, 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.

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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 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. The basis difference as of April 1, 2007 is $4.9 million which will be amortized over the remaining useful life. 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 31^st year end for financial reporting purposes. Audited financial statements for the Joint Venture from January 1, 2006 through December 31, 2006 were filed on AMF’s Form 10-K/A for the year ended July 2, 2006.

Selected financial results of the Joint Venture are as follows:

	December 31, 2006			December 31, 2005
Financial position:
Current assets	$	68,453		$	64,205
Non-current assets		31,753			37,604
Total assets		100,206			101,809
Current liabilities		30,491			26,829
Non-current liabilities		81,931			66,680
Total liabilities		112,422			93,509
Stockholders’ equity (deficit)	$	(12,216	)	$	8,300

The following definitions are used in this report related to the Joint Venture results of operations:

Period	Referred to as
Results from October 1, 2006 through December 31, 2006	“Three Months Ended 12/31/06”
Results from October 8, 2005 through December 31, 2005	“Three Months Ended 12/31/05”
Results from April 1, 2006 through December 31, 2006	“Nine Months Ended 12/31/06”
Results from October 8, 2005 through December 31, 2005	“Nine Months Ended 12/31/05”

	Three Months Ended 12/31/06		Three Months Ended 12/31/05		Nine Months Ended 12/31/06		Nine Months Ended 12/31/05
Results of Operations:
Revenue	$	45,881	$	41,297	$	135,898	$	41,297
Gross Profit		9,313		9,927		35,313		9,927
Net Loss		6,623		5,390		11,135		5,390

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. The amount of the impairment was determined based on a third party valuation at that time.

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.

26

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 January 1, 2007 through April 1, 2007	“2007 Third Quarter”
Results from January 2, 2006 through April 2, 2006	“2006 Third Quarter”
Results from July 3, 2006 through April 1, 2007	“2007 Nine Months”
Results from July 4, 2005 through April 2, 2006	“2006 Nine 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 Third Quarter			2006 Third Quarter		2007 Nine Months			2006 Nine Months
Operating revenue	$	151.7		$	147.8	$	382.3		$	397.5
Operating expenses:
Cost of goods sold		13.0			14.0		33.1			61.2
Bowling center operating expenses		88.7			88.9		254.4			249.1
Selling, general and administrative expenses		10.8			9.2		30.7			36.5
Asset impairment		0.5			—		0.5			0.6
Depreciation and amortization		8.0			8.9		29.4			29.0
Operating income		30.7			26.8		34.2			21.1
Interest expense, net		4.5			5.2		14.8			15.7
Loss on extinguishment of debt		—			—		1.9			—
Loss from equity affiliate		3.1			3.7		5.6			3.7
Impairment of equity method investment		—			—		4.6			—
Other income, net		—			—		—			(0.7	)
Income from continuing operations before income taxes		23.1			17.9		7.3			2.4
Provision for income taxes		3.3			2.8		3.4			2.2
Income from continuing operations		19.8			15.1		3.9			0.2
Discontinued operations:
Income (loss) from discontinued operations, net of tax		(0.1	)		—		(0.3	)		0.2
Gain (loss) on disposal, net of tax		—			0.7		(0.4	)		(0.6	)
Income (loss) from discontinued operations		(0.1	)		0.7		(0.7	)		(0.4	)
Net income (loss)	$	19.7		$	15.8	$	3.2		$	(0.2	)

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Revenue

Consolidated operating revenue was $151.7 million in the 2007 Third Quarter, an increase of $3.9 million, or 2.6%, compared with the 2006 Third Quarter. The increase is primarily due to increased Centers revenue.

Consolidated operating revenue was $382.3 million in the 2007 Nine Months, a decrease of $15.2 million, or 3.8%, compared with the 2006 Nine Months. A decrease of $32.1 million is attributable to Products no longer being fully consolidated during the 2007 Nine Months and offset by an increase of $16.0 million in Centers revenue.

Cost of Goods Sold and Selling, General and Administrative Expenses

Cost of goods sold and selling, general and administrative expenses increased $0.6 million in the 2007 Third Quarter, primarily due to increased payroll expenses.

Cost of goods sold and selling, general and administrative expenses decreased $33.9 million in the 2007 Nine Months, primarily related to Products no longer being fully consolidated during the 2007 Nine Months.

Asset Impairment

Asset impairments for the 2007 Third Quarter total $0.5 million, representing the difference between the fair market value and carrying value of impaired assets in the U.S.

During the 2007 Nine Months we recorded asset impairments of $0.5 million, representing the difference between the fair market value and carrying value of impaired assets in the U.S. During the 2006 Nine 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 $0.9 million, or 10.1% in the 2007 Third Quarter compared with 2006 Third Quarter. This decrease is primarily related to more assets being fully depreciated or amortized in the 2007 Third Quarter as compared with the 2006 Third Quarter.

Depreciation and amortization increased $0.4 million, or 1.4% in the 2007 Nine Months compared with 2006 Nine Months. This increase is primarily attributable to an additional expense of $2.0 million in 2007 Nine 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 Nine Months.

Provision for Income Taxes

Total tax expense for the 2007 Third Quarter included $3.1 million of state tax expense for continuing operations. The increase in state tax expense from the prior quarter is primarily attributable to book/tax timing differences and the seasonality of the earnings cycle.

The total income tax provision increased to $3.4 million in the 2007 Nine Months from $2.2 million in the 2006 Nine Months primarily due to an increase in state income taxes. Total tax expense for 2007 Nine Months included $2.7 million for state taxes and $0.6 million of tax expenses for various international taxes.

Net Income (Loss)

Net income for the 2007 Third Quarter totaled $19.7 million compared with $15.8 million in the 2006 Third Quarter primarily due to increased bowling revenue and the expense variations discussed above. In the 2007 Third Quarter, our losses from our investment in the joint venture were $0.6 million lower as compared to 2006 Third Quarter. Additionally, interest expense was $0.7 million lower in Third Quarter 2007 as compared to Third Quarter 2006.

Net income (loss) for the 2007 Nine Months totaled $3.2 million compared with $(0.2) million for the 2006 Nine Months. During the 2007 Nine Months, bowling revenue increased from the 2006 Nine Months by $16.0 million partially offset by $5.3 million higher bowling center operating expenses. In the 2007 Nine Months, we recorded 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 Nine Months to correct an error in calculating insurance liabilities in prior years and recorded additional depreciation expense of $2.0 million as discussed above.

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Comprehensive Income (Loss)

Comprehensive income for the 2007 Third Quarter totaled $18.8 million, an increase of $2.7 million, compared with comprehensive income of $16.1 million in the 2006 Third Quarter. The increase was attributable to an increase in net income of $3.9 million offset by the change in foreign currency translation compared to the 2006 Third Quarter.

Comprehensive income for the 2007 Nine Months totaled $1.3 million, an increase of $1.4 million, compared with a comprehensive loss of $(0.1) million for the 2006 Nine Months. The increase was primarily attributable to an increase in net income of $3.4 million offset by the change in foreign currency translation compared to 2006 Nine Months.

Centers

Centers results reflect the operations of our bowling centers located in the U.S. and internationally.

(In millions)	2007 Third Quarter		2006 Third Quarter		2007 Nine Months		2006 Nine Months
Operating revenue	$	150.8	$	147.1	$	380.0	$	364.0
Operating expenses:
Cost of goods sold		13.0		13.7		33.1		34.3
Bowling center operating expenses		88.7		88.9		254.4		249.1
Selling, general, and administrative expenses		7.5		6.1		22.1		21.2
Asset impairment		0.5		—		0.5		0.3
Depreciation and amortization		8.1		8.8		29.3		27.0
Operating income	$	33.0	$	29.6	$	40.6	$	32.1

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

	2007 Nine Months		2006 Nine Months
Revenue:
Bowling	56.6	%	57.5	%
Food and beverage	28.9	%	28.1	%
Ancillary sources	14.5	%	14.4	%

2007 Third Quarter compared with 2006 Third Quarter

Centers operating revenue for the 2007 Third Quarter increased $3.7 million, or 2.5%, as compared with the 2006 Third Quarter. Constant Centers (defined as all U.S. and Mexico centers that have been in operation more than fifteen months) revenue increased $5.3 million, or 3.7%. 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 was a decrease in revenue of $1.7 million attributable to the closure of nine bowling centers since July 3, 2005.

Centers operating expenses decreased $0.2 million, or 0.2% in 2007 Third Quarter as compared to 2006 Third Quarter. Closed center operating expenses were $1.7 million lower, partially offset by a $1.6 million increase in Constant Centers operating expenses, primarily the result of a 3.2% increase in payroll expenses. As a percentage of revenue, Centers operating expenses were 58.8% for the 2007 Third Quarter and 60.4% for the 2006 Third Quarter.

Centers selling, general and administrative expenses increased $1.4 million, or 23.0% in 2007 Third Quarter as compared to 2006 Third Quarter. This increase was primarily due to increases in U.S. support center and operations management payroll expenses.

Operating income was $33.0 million in the 2007 Third Quarter versus operating income of $29.6 million in the 2006 Third Quarter, an increase of $3.4 million. This increase was primarily due to increases in revenue offset by increases in operating and selling, general and administrative expenses as discussed above.

29

2007 Nine Months compared with 2006 Nine Months

Centers operating revenue for the 2007 Nine Months increased $16.0 million, or 4.4%, as compared with the 2006 Nine Months. Constant Centers revenue increased $20.5 million, or 5.8%. 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 was a decrease in revenue of $4.8 million attributable to the closure of nine bowling centers since July 3, 2005.

Centers operating expenses increased $5.3 million, or 2.1% in 2007 Third Quarter as compared to 2006 Third Quarter. This increase was primarily due to increases in Constant Centers operating expenses of $7.8 million, or 3.2%, primarily the result of a 4.9% 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 $4.4 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 66.9% for the 2007 Nine Months and 68.8% for the 2006 Nine Months.

Depreciation and amortization increased $2.3 million, or 8.5%, attributable to current year additions and an additional expense of $2.0 million in 2007 First Quarter to correct an error in calculating depreciation.

Centers selling, general and administrative expenses increased $0.9 million, or 4.2%. This increase was primarily due to increases in U.S. support center and operations management payroll expenses.

Operating income was $40.6 million in the 2007 Nine Months versus operating income of $32.1 million in the 2006 Nine Months, an increase of $8.5 million. This increase is primarily due to increases in revenue offset by increases in operating and selling, general and administrative 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 equity affiliate of $5.6 million including amortization of the investment and elimination of intercompany profit on purchases as Centers continue to purchase from the Joint Venture.

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 which is amortized as an adjustment and included in net income (loss) of the Joint Venture over 5 years. The basis difference as of April 1, 2007 is $4.9 million which will be amortized over the remaining useful life. Centers continues to purchase from the Joint Venture, and eliminates its share of the intercompany profit.

Selected financial results of the Joint Venture are as follows:

	Three Months Ended 12/31/06		Three Months Ended 12/31/05		Nine Months Ended 12/31/06		Nine Months Ended 12/31/05
Results of Operations:
Revenue	$	45,881	$	41,297	$	135,898	$	41,297
Gross Profit		9,313		9,927		35,313		9,927
Net Loss		6,623		5,390		11,135		5,390

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.

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Liquidity

As of April 1, 2007, we had $47.2 million in principal outstanding under our Credit Agreement. No borrowings were outstanding under the Revolver as of the end of the 2007 Nine Months and outstanding standby letters of credit issued under the Revolver totaled $17.9 million, leaving $22.1 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 April 1, 2007.

As of April 1, 2007, working capital was $5.6 million compared with working capital of $16.0 million at July 2, 2006. This change was primarily attributable to the use of cash for 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.

In May 2007, the Company received a financing commitment from Credit Suisse Securities (USA) LLC to refinance its existing indebtedness. The refinancing is expected to consist of a $270 million first-lien credit facility, consisting of a $60 million revolving loan facility and a $210.0 million six-year term loan and a $105.0 million six and a half year second-lien credit facility. The net proceeds are planned to be used to repay existing indebtedness, related prepayment fees, provide for a dividend and growth capital to support the Company’s business plan. The Company expects the refinancing to close during June 2007. Since all of the terms of the credit facilities are currently under negotiation, there can be no assurance that the final terms of the credit facilities will be as described above.

Operating Cash Flow

(In millions)	2007 Nine Months		2006 Nine Months
Cash flows from operating activities:
Before changes in operating assets and liabilities	$	42.9	$	32.9
Loss on extinguishment of debt		1.9		—
Working capital		13.6		(5.9	)
Discontinued operations loss		0.7		0.4
Total	$	59.1	$	27.4

Net cash provided by operating activities was $59.1 million in the 2007 Nine Months compared with net cash provided by operating activities of $27.4 million in the 2006 Nine Months, an increase of $31.7 million. The increase is the result of the increase in income from continuing operations. Additionally, Products is included in the 2006 Nine Months results and had more significant working capital requirements compared with Centers.

Investing

(In millions)	2007 Nine Months			2006 Nine Months
Cash flows from investing activities:
Purchases of property and equipment	$	(32.7	)	$	(38.3	)
Return of cash from equity affiliate		—			17.5
Proceeds from the sale of property and equipment		4.1			9.6
Total	$	(28.6	)	$	(11.2	)

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Net cash used in investing activities was $28.6 million in the 2007 Nine Months compared with $11.2 million in the 2006 Nine Months. During 2006 Nine Months we received $17.5 million return of cash from the Joint Venture at the completion of that transaction and an additional $9.6 million for the sale of Billiards and six excess properties and other assets. Purchases of capital expenditures were lower in 2007 Nine Months compared to last year. This is a result of timing as opposed to any change in spending trends.

Financing

(In millions)	2007 Nine Months			2006 Nine Months
Cash flows from financing activities:
Repayments of debt, net	$	(30.5	)	$	(0.8	)
Payments under capital lease obligations		—			(0.2	)
Total	$	(30.5	)	$	(1.0	)

Net cash used in financing activities was $30.5 million in the 2007 Nine Months compared with $1.0 million in the 2006 Nine Months. During 2007 Nine Months, we made two voluntary payments on the Term Loan totaling $30 million. During 2006 Nine 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)	April 1, 2007		July 2, 2006
Term Loan	$	47.2	$	77.6
Subordinated Notes, 10%, due 2010		123.9		123.9
Revolver		—		—
Mortgage note		2.0		2.0
Total debt	$	173.1	$	203.5

As of the end of the 2007 Nine Months, we had approximately $22.1 million available for borrowing under the Revolver, with no amounts outstanding and approximately $17.9 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 April 1, 2007. Although we expect to be in compliance, there can be no assurance that we will continue to be in compliance with these covenants.

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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 Third Quarter		2006 Third Quarter		2007 Nine Months		2006 Nine Months
U.S. – Asset Sales
Proceeds	$	0.5	$	2.0	$	4.0	$	3.8
Gain (loss), net		0.4		—		0.5		0.3
International – Asset Sales
Proceeds		—		—		—		2.0
Gain, net		—		—		—		0.2

During the 2007 Third Quarter, we sold the land and buildings associated with one center in the U.S. for net proceeds of $0.5 million and a net gain of $0.5 million. During the 2006 Third Quarter, we sold the land and buildings associated with three centers in the U.S. for net proceeds of $1.9 million.

For the 2007 Nine Months, we sold the land and buildings associated with five closed centers in the U.S. for net proceeds of $4.0 million and net gains of $0.4 million. During 2006 Nine Months, we sold the land and buildings associated with five centers in the U.S. for net proceeds of $3.4 million and net gains of $0.4 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 Nine Months		2006 Nine Months
Centers	$	32.7	$	36.8
Products		—		1.1
Holdings		—		—
Corporate		—		1.0
Eliminations		—		(0.6	)
Total	$	32.7	$	38.3

Capital expenditures decreased $5.6 million in the 2007 Nine Months compared to the 2006 Nine Months primarily due to the timing of projects. We continue to invest in our high potential 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.

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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 Nine 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 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.

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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.

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.

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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 April 1, 2007, 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 100 basis point increase in our average variable interest rate would result in additional interest expense totaling approximately $0.5 million.

The following table provides information about our fixed and variable-rate debt at April 1, 2007, weighted average interest rates and respective maturity dates (in millions).

Maturity Date	Fixed Rate Debt		Weighted Average Interest Rate		Variable Rate Debt		Weighted Average Interest Rate
March 1, 2010	$	123.9	10.00	%		—	—
August 27, 2009		—	—		$	47.2	8.37	%

The fair value of the Term Loan and the Subordinated Notes at April 1, 2007 was approximately $47.2 million and $129.5 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.

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.

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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.

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

(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).

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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: May 15, 2007

/s/ William A. McDonnell

William A. McDonnell

Vice President and Chief Financial Officer

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