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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

(MarkOne)

|        |                                                                                       |
|--------|---------------------------------------------------------------------------------------|
|   | QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the quarterly period ended March 31,2005

OR

|        |                                                                                        |
|--------|----------------------------------------------------------------------------------------|
|   | TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934 |

For the transition period from                     to                     

Commission file number: 001-12391

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PANAVISION INC.(Exact name of Registrant as specified in itscharter)

|                                                             |  |                                    |  |  |  |  |
|-------------------------------------------------------------|--|------------------------------------|--|--|--|--|
| Delaware                                                    |  | 13-3593063                         |
| (Stateor other jurisdiction ofincorporation ororganization) |  | (I.R.S. EmployerIdentificationNo.) |
|                                                        |  |                               |
| 6219De Soto AvenueWoodland Hills,California                 |  | 91367                              |
| (Address of principalexecutive offices)                     |  | (Zipcode)                          |
|                                                             |

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Registrant'stelephone number including area code: **(818) 316-1000**

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Indicate by check mark whether theregistrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes      No 

Indicate by checkmark whether the registrant isan accelerated filer (as defined in Rule 12b-2 of the SecuritiesExchange Act of 1934). Yes      No 

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicatethe number of shares outstanding of each of the Issuer's classesof common stock, as of the latest practicable date.

As of May12, 2005, there were 39,380,729 shares of Panavision Inc. Common Stock,par value $0.01 per share,outstanding.

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PANAVISIONINC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THEQUARTER ENDED MARCH 31, 2005

|                                                    |  |                                                                                     |  |        |  |  |  |  |  |  |
|----------------------------------------------------|--|-------------------------------------------------------------------------------------|--|--------|--|--|--|--|--|--|
| PartI.    FinancialInformation |
| Item1.                                             |  | FinancialStatements                                                                 |  |   |
|                                               |  | CondensedConsolidated Statements ofOperations                                       |  | 3      |
|                                               |  | Condensed ConsolidatedBalance Sheets                                                |  | 4      |
|                                               |  | Condensed ConsolidatedStatements of Cash Flows                                      |  | 6      |
|                                               |  | Notes to CondensedConsolidated Financial Statements                                 |  | 8      |
| Item 2.                                            |  | Management'sDiscussion and Analysis of Financial Condition and Results ofOperations |  | 16     |
| Item3.                                             |  | Quantitative and Qualitative Disclosures About MarketRisk                           |  | 25     |
| Item4.                                             |  | Controls and Procedures                                                             |  | 25     |
| PartII.    Other Information   |
| Item 1.                                            |  | LegalProceedings                                                                    |  | 26     |
| Item2.                                             |  | Unregistered Sales of Equity Securities and Use ofProceeds                          |  | 26     |
| Item3.                                             |  | Defaults Upon Senior Securities                                                     |  | 26     |
| Item 4.                                            |  | Submission of Mattersto a Vote of Security Holders                                  |  | 26     |
| Item 5.                                            |  | OtherInformation                                                                    |  | 26     |
| Item6.                                             |  | Exhibits                                                                            |  | 26     |
| SIGNATURES                                         |  | 29                                                                                  |
|                                                    |

2

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PART I – FINANCIALINFORMATION

|               |                     |
|---------------|---------------------|
| Item 1.  | FinancialStatements |

The financial information herein andmanagement's discussion thereof include consolidated data forPanavision Inc. ("Registrant" or"Panavision") and its subsidiaries.Registrant and its subsidiaries are sometimes herein referred tocollectively as the "Company".

PANAVISION INC. CONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS (Unaudited) (In thousands, except per shareamounts)

|                                                                                                                          |  |                           |         |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------------------------------------|--|---------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                                                     |  | ThreeMonthsEnded March31, |
|                                                                                                                     |  | 2005                      |         | 2004    |
| Camerarental                                                                                                             |  | $                         | 31,806  |    |  | $      | 30,844  |    |
| Lightingrental                                                                                                           |  |                      | 9,704   |    |  |   | 8,522   |    |
| Sales andother                                                                                                           |  |                      | 10,626  |    |  |   | 9,684   |    |
| Totalrental revenue andsales                                                                                             |  |                      | 52,136  |    |  |   | 49,050  |    |
| Cost of camerarental                                                                                                     |  |                      | 19,466  |    |  |   | 16,399  |    |
| Cost oflighting rental                                                                                                   |  |                      | 8,160   |    |  |   | 8,144   |    |
| Cost ofsales andother                                                                                                    |  |                      | 5,984   |    |  |   | 5,596   |    |
| Grossmargin                                                                                                              |  |                      | 18,526  |    |  |   | 18,911  |    |
| Selling,general and administrativeexpenses                                                                               |  |                      | 19,024  |    |  |   | 16,160  |    |
| Research anddevelopmentexpenses                                                                                          |  |                      | 1,611   |    |  |   | 1,460   |    |
| Operatingincome (loss)                                                                                                   |  |                      | (2,109  | )  |  |   | 1,291   |    |
| Interestincome                                                                                                           |  |                      | 89      |    |  |   | 98      |    |
| Interestexpense                                                                                                          |  |                      | (8,352  | )  |  |   | (7,881  | )  |
| Foreignexchange gain(loss)                                                                                               |  |                      | (396    | )  |  |   | 251     |    |
| Refinancingexpense                                                                                                       |  |                      | (154    | )  |  |   | (6,470  | )  |
| Other income,net                                                                                                         |  |                      | 518     |    |  |   | 92      |    |
| Lossfrom continuing operations before incometaxes                                                                        |  |                      | (10,404 | )  |  |   | (12,619 | )  |
| Income taxprovision                                                                                                      |  |                      | (597    | )  |  |   | (1,412  | )  |
| Netloss from continuingoperations                                                                                        |  |                      | (11,001 | )  |  |   | (14,031 | )  |
| Discontinuedoperations:Income from EFILM (net of income tax provision of $0and $58,    respectively) |  |                      | — |    |  |   | 64      |    |
| Netincome from discontinuedoperations                                                                                    |  |                      | — |    |  |   | 64      |    |
| Netloss                                                                                                                  |  | $                         | (11,001 | )  |  | $      | (13,967 | )  |
| Netloss from continuing operations attributable to commonstockholders                                                    |  | $                         | (11,001 | )  |  | $      | (19,281 | )  |
| Netloss from continuing operations per share – basic anddiluted                                                    |  | $                         | (0.28   | )  |  | $      | (2.20   | )  |
| Netloss per share – basic and diluted                                                                              |  | $                         | (0.28   | )  |  | $      | (2.19   | )  |
| Shares used in computation – basic anddiluted                                                                      |  |                      | 39,381  |    |  |   | 8,770   |    |
|                                                                                                                          |

Seeaccompanying notes.

3

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PANAVISION INC. CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                           |  |               |         |                  |  |        |         |        |  |  |
|---------------------------------------------------------------------------|--|---------------|---------|------------------|--|--------|---------|--------|--|--|
|                                                                      |  | March31, 2005 |         | December 31,2004 |
|                                                                      |  | (Unaudited)   |         | (Note1)          |
| **ASSETS**                                                                |  |
| Currentassets:                                                            |  |          |    |             |  |   |    |   |
| Cash andcashequivalents                                                   |  | $             | 3,974   |             |  | $      | 6,593   |   |
| Accountsreceivable (net of allowance of $1,711 in 2005 and $1,618 in2004) |  |          | 30,373  |             |  |   | 28,897  |   |
| Inventories                                                               |  |          | 15,334  |             |  |   | 14,926  |   |
| Prepaidexpenses                                                           |  |          | 4,615   |             |  |   | 3,912   |   |
| Notereceivable                                                            |  |          | 821     |             |  |   | 826     |   |
| Due from relatedparties                                                   |  |          | — |             |  |   | 106     |   |
| Other currentassets                                                       |  |          | 2,895   |             |  |   | 2,081   |   |
| Totalcurrentassets                                                        |  |          | 58,012  |             |  |   | 57,341  |   |
| Property, plantand equipment,net                                          |  |          | 229,726 |             |  |   | 230,795 |   |
| Goodwill,net                                                              |  |          | 259,800 |             |  |   | 259,909 |   |
| Patents andtrademarks, net                                                |  |          | 66,149  |             |  |   | 66,266  |   |
| Otherassets                                                               |  |          | 6,395   |             |  |   | 6,349   |   |
| Totalassets                                                               |  | $             | 620,082 |             |  | $      | 620,660 |   |
|                                                                           |

Seeaccompanying notes.

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PANAVISION INC. CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                                                                                            |  |               |          |                  |  |        |          |         |  |  |
|--------------------------------------------------------------------------------------------------------------------------------------------|--|---------------|----------|------------------|--|--------|----------|---------|--|--|
|                                                                                                                                       |  | March31, 2005 |          | December 31,2004 |
|                                                                                                                                       |  | (Unaudited)   |          | (Note1)          |
| **LIABILITIES ANDSTOCKHOLDERS' EQUITY**                                                                                                    |  |
| Currentliabilities:                                                                                                                        |  |          |     |             |  |   |     |    |
| Accountspayable                                                                                                                            |  | $             | 13,501   |             |  | $      | 8,634    |    |
| Accruedliabilities                                                                                                                         |  |          | 28,648   |             |  |   | 28,119   |    |
| Currentmaturities of long-termdebt                                                                                                         |  |          | 75,030   |             |  |   | 9,557    |    |
| Totalcurrentliabilities                                                                                                                    |  |          | 117,179  |             |  |   | 46,310   |    |
| Long-termdebt                                                                                                                              |  |          | 222,728  |             |  |   | 290,740  |    |
| Note payable toaffiliate                                                                                                                   |  |          | 18,154   |             |  |   | 9,154    |    |
| Deferred taxliabilities, net                                                                                                               |  |          | 27,775   |             |  |   | 28,201   |    |
| Otherliabilities                                                                                                                           |  |          | 3,353    |             |  |   | 3,323    |    |
|                                                                                                                                       |  |
| Commitmentsandcontingencies                                                                                                                |  |          |     |             |  |   |     |    |
|                                                                                                                                       |  |          |     |             |  |   |     |    |
| Stockholders'equity:                                                                                                                       |  |          |     |             |  |   |     |    |
| Commonstock, $0.01 par value; 50,000,000 shares authorized; 39,380,729shares issued and outstanding at March 31, 2005 and December 31,2004 |  |          | 394      |             |  |   | 394      |    |
| Additional paid-incapital                                                                                                                  |  |          | 374,780  |             |  |   | 374,780  |    |
| Revaluationcapital                                                                                                                         |  |          | 333,199  |             |  |   | 333,199  |    |
| Accumulateddeficit                                                                                                                         |  |          | (482,951 | )           |  |   | (471,950 | )  |
| Accumulatedother comprehensiveincome                                                                                                       |  |          | 5,471    |             |  |   | 6,509    |    |
| Totalstockholders'equity                                                                                                                   |  |          | 230,893  |             |  |   | 242,932  |    |
| Totalliabilities and stockholders'equity                                                                                                   |  | $             | 620,082  |             |  | $      | 620,660  |    |
|                                                                                                                                            |

Seeaccompanying notes.

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PANAVISION INC. CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) (Inthousands)

|                                                                          |  |                           |         |         |  |        |          |         |  |  |
|--------------------------------------------------------------------------|--|---------------------------|---------|---------|--|--------|----------|---------|--|--|
|                                                                     |  | ThreeMonthsEnded March31, |
|                                                                     |  | 2005                      |         | 2004    |
| **Operatingactivities**                                                  |  |                      |    |    |  |   |     |    |
| Net loss fromcontinuingoperations                                        |  | $                         | (11,001 | )  |  | $      | (14,031  | )  |
| Adjustmentsto derive net cash provided by (used in) operatingactivities: |  |                      |    |    |  |   |     |    |
| Depreciationandamortization                                              |  |                      | 10,972  |    |  |   | 10,448   |    |
| Write-offof deferred financingcosts                                      |  |                      | — |    |  |   | 3,436    |    |
| Gain on sale ofproperty andequipment                                     |  |                      | (462    | )  |  |   | (99      | )  |
| Amortization ofdeferred financingcosts                                   |  |                      | 258     |    |  |   | 438      |    |
| Dividends receivedfrom equityinvestments                                 |  |                      | — |    |  |   | 500      |    |
| Deferredincome taxbenefit                                                |  |                      | — |    |  |   | (1,100   | )  |
| Changesin operating assets andliabilities:                               |  |                      |    |    |  |   |     |    |
| Accountsreceivable                                                       |  |                      | (1,476  | )  |  |   | 154      |    |
| Inventories                                                              |  |                      | (408    | )  |  |   | (1,267   | )  |
| Prepaidexpenses and other currentassets                                  |  |                      | (1,512  | )  |  |   | (575     | )  |
| Accountspayable                                                          |  |                      | 1,867   |    |  |   | 2,381    |    |
| Accruedliabilities                                                       |  |                      | 529     |    |  |   | (198     | )  |
| Due to relatedparties                                                    |  |                      | 106     |    |  |   | (306     | )  |
| Other,net                                                                |  |                      | (48     | )  |  |   | (2,822   | )  |
| Netcash used in operatingactivities                                      |  |                      | (1,175  | )  |  |   | (3,041   | )  |
|                                                                     |  |                      |    |    |  |   |     |    |
| **Investingactivities**                                                  |  |                      |    |    |  |   |     |    |
| Capitalexpenditures                                                      |  |                      | (7,766  | )  |  |   | (5,279   | )  |
| Proceedsfrom dispositions of fixedassets                                 |  |                      | 463     |    |  |   | 102      |    |
| Netcash used in investingactivities                                      |  |                      | (7,303  | )  |  |   | (5,177   | )  |
|                                                                     |  |                      |    |    |  |   |     |    |
| **Financingactivities**                                                  |  |                      |    |    |  |   |     |    |
| Borrowings underAmended CreditAgreement                                  |  |                      | — |    |  |   | 135,600  |    |
| Proceedsfrom issuance of SeniorNotes                                     |  |                      | — |    |  |   | 100,000  |    |
| Repayments oflong-termdebt                                               |  |                      | (2,641  | )  |  |   | (252,464 | )  |
| Deferredfinancing costs                                                  |  |                      | (483    | )  |  |   | (452     | )  |
| Capitalcontribution, net of transactioncosts                             |  |                      | — |    |  |   | 22,710   |    |
| Borrowingsunder notes payable toaffiliate                                |  |                      | 9,000   |    |  |   | 2,000    |    |
| Netcash provided by financingactivities                                  |  |                      | 5,876   |    |  |   | 7,394    |    |
| Effect ofexchange rate changes oncash                                    |  |                      | (17     | )  |  |   | 30       |    |
| Netdecrease in cash and cashequivalents                                  |  |                      | (2,619  | )  |  |   | (794     | )  |
| Cash andcash equivalents at beginning ofperiod                           |  |                      | 6,593   |    |  |   | 6,770    |    |
| Cashand cash equivalents at end ofperiod                                 |  | $                         | 3,974   |    |  | $      | 5,976    |    |
|                                                                     |  |                      |    |    |  |   |     |    |
|                                                                     |  |                      |    |    |  |   |     |    |
|                                                                          |

Seeaccompanying notes.

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PANAVISION INC.CONDENSED CONSOLIDATEDSTATEMENTS OF CASHFLOWS(Unaudited)

|                                                     |  |                           |        |        |  |        |        |        |  |  |
|-----------------------------------------------------|--|---------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                                |  | ThreeMonthsEnded March31, |
|                                                |  | 2005                      |        | 2004   |
| **Supplementalcash flow information** (inthousands) |  |                      |   |   |  |   |   |   |
| Interest paid duringtheperiod                       |  | $                         | 9,396  |   |  | $      | 6,103  |   |
| Incometaxes paid during theperiod                   |  | $                         | 79     |   |  | $      | 656    |   |
|                                                     |

Supplementalnon-cash activities

During the three months ended March 31,2005, the Company purchased, received but had not yet paid for rentalassets totaling approximately $3.0 million; this amount was reflectedas a current liability at March 31, 2005 and therefore not included asa cash outflow from investing activities.

As described in Note 4of the Notes to Condensed Consolidated Financial Statements, in January2004, the Company issued to PX Holding Corporation ("PXHolding") 1,381,690 shares of new Series E Non-CumulativePerpetual Participating Preferred Stock, par value $0.01 per share, inexchange for 1,381,690 shares of Series A Non-Cumulative PerpetualParticipating Preferred Stock, par value $0.01 per share, whichconstituted all of the then outstanding Series A Preferred Stock.

As described in Note 4 of the Notes to Condensed ConsolidatedFinancial Statements, in January 2004, the Company issued to PX Holding215,274 shares of new Series D Cumulative Pay-in-Kind Preferred Stock,par value $0.01 per share, in exchange for, among other consideration,159,644 shares of Series C Cumulative Pay-in-Kind Preferred Stock, parvalue $0.01, held by PX Holding, which constituted all of the thenoutstanding Series C Preferred Stock. The other consideration includedthe contribution or retirement of various related party notes andMacAndrews & Forbes Holdings Inc.'s one-third interest in thecommon stock of PANY Rental, Inc. Total book value, which approximatesfair value, of such other non-cash consideration was approximately$19.0 million.

See accompanyingnotes.

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

1.    Basis ofPreparation

The Company is an indirect majority-ownedsubsidiary of MacAndrews and Forbes Holdings Inc.("MacAndrews & Forbes Holdings" or"Parent"), a corporation whose solestockholder is Ronald O. Perelman. The Company's principalbusiness operations are conducted through its subsidiaries.

Theaccompanying condensed consolidated financial statements have beenprepared in accordance with U.S. generally accepted accountingprinciples for interim financial information and with the instructionsfor Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they donot include all of the information and footnotes required by U.S.generally accepted accounting principles for complete financialstatements. In the opinion of management, all adjustments (consistingof normal recurring adjustments) considered necessary for a fairpresentation have been included. The results of operations for interimperiods are not necessarily indicative of the results that may beexpected for the fiscal year. The condensed consolidated financialstatements should be read in conjunction with the consolidatedfinancial statements and accompanying notes included in theCompany's Annual Report on Form 10-K for the year ended December31, 2004. All terms used but not defined elsewhere herein have themeaning ascribed to them in the Company's 2004 Annual Report onForm 10-K.

The balance sheet at December 31, 2004 has beenderived from the audited financial statements at that date but does notinclude all the information and footnotes required by U.S. generallyaccepted accounting principles for complete financial statements.

The condensed consolidated financial statements include the accountsof Panavision and its majority-owned subsidiaries. All significantintercompany amounts and transactions have been eliminated.

Certain amounts in previously issued financial statements have beenreclassified to conform to the 2005 presentation, including, but notlimited to, the presentation of EFILM, LLC("EFILM") and its holding company, LPPI, LLC("LPPI"), as discontinued operations for allperiods presented.

2.    Use of Estimates andAssumptions

The preparation of financial statements inconformity with U.S. generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the amountsreported in the financial statements and accompanying notes, includingthe collectibility of receivables and the realizability of assets suchas fixed assets and deferred taxes. Actual results could differ fromsuch estimates.

3.    Inventories

Inventories consistof the following (inthousands):

|                          |  |               |        |                   |  |        |        |        |  |  |
|--------------------------|--|---------------|--------|-------------------|--|--------|--------|--------|--|--|
|                     |  | March31, 2005 |        | December 31, 2004 |
| Finishedgoods            |  | $             | 2,488  |              |  | $      | 2,476  |   |
| Work-in-process          |  |          | 361    |              |  |   | 315    |   |
| Componentparts           |  |          | 5,136  |              |  |   | 4,664  |   |
| Spare parts andsupplies  |  |          | 1,302  |              |  |   | 1,409  |   |
| Goods purchasedforresale |  |          | 6,047  |              |  |   | 6,062  |   |
|                     |  | $             | 15,334 |              |  | $      | 14,926 |   |
|                          |

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt

Long-term debt, including current maturities, consists ofthe following (inthousands):

|                                                  |  |               |         |                   |  |        |         |        |  |  |
|--------------------------------------------------|--|---------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                             |  | March31, 2005 |         | December 31, 2004 |
| Amended andRestated CreditAgreement              |  | $             | 123,889 |              |  | $      | 125,694 |   |
| 12.50%Senior Notes Due2009                       |  |          | 100,765 |              |  |   | 100,597 |   |
| 9 5/8%Senior Subordinated Discount Notes Due2006 |  |          | 65,016  |              |  |   | 65,084  |   |
| Notes payable toaffiliate                        |  |          | 18,154  |              |  |   | 9,154   |   |
| Other(including capitalized leaseobligations)    |  |          | 8,088   |              |  |   | 8,922   |   |
|                                             |  |          | 315,912 |              |  |   | 309,451 |   |
| Less:Currentmaturities                           |  |          | 75,030  |              |  |   | 9,557   |   |
| TotalLong-TermDebt                               |  | $             | 240,882 |              |  | $      | 299,894 |   |
|                                                  |

Asof March 31, 2005, the Company had lines of credit extended by arelated party totaling $32.0 million, under which approximately $18.2million was drawn. The Company does not have any off-balance sheetfinancing arrangements.

    9 5/8%Notes

The 9 5/8% Notes were issued at adiscount representing a yield to maturity of9 5/8%. There were no periodic or interestpayments through February 1, 2002. Thereafter, they bear interest at arate of 9 5/8% per annum, payable semi-annuallyon February 1 and August 1 of each year, commencing August 1, 2002. The9 5/8% Notes are due February 1, 2006,and are reflected as a component of current maturities.

    MacAndrews Lines

On August 13, 2003, MacAndrews &Forbes Inc., (formerly MacAndrews & Forbes Holdings Inc.) agreed toamend an existing line of credit provided to Panavision to increase theamount available for borrowing from $4.0 million to $10.0 million andextend the maturity date to August 31, 2006 (as amended, the"MacAndrews Line"). In connection with anamendment to Panavision's Prior Credit Agreement (as definedbelow), on November 12, 2003, MacAndrews & Forbes Inc. agreed toprovide a second revolving line of credit (the "SecondMacAndrews Line") in the amount of $10.0 million at a rateequal to 50 basis points above the rate provided for in the revolvingfacility pursuant to the Prior Credit Agreement and a maturity date ofApril 15, 2004. As described below, in connection with the January 2004Refinancing (as defined below), (i) amounts outstanding under theMacAndrews Line were retired in exchange for shares of new Series DCumulative Pay-in-Kind Preferred Stock, par value $0.01 per share (the"Series D Preferred Stock") and (ii)MacAndrews & Forbes Inc. increased the amount of the SecondMacAndrews Line to $20.0 million and extended the maturity date toApril 16, 2009. On March 30, 2005, the Second MacAndrews Line wasamended and restated to increase the amount to $32.0 million. As ofMarch 31, 2005, Panavision had availability under the Second MacAndrewsline of approximately $13.8 million.

    Prior CreditAgreement

On June 4, 1998, Panavision entered into a CreditAgreement with a syndicate of lenders (as subsequently amended onSeptember 30, 1998, June 30, 1999, March 15, 2002, June 14, 2002,September 30, 2002, March 25, 2003 and November 12, 2003, the"Prior Credit Agreement"). Panavision'sobligations under the Prior Credit Agreement were secured bysubstantially all of Panavision's assets. The Prior CreditAgreement comprised two facilities, the Term Facility and the RevolvingFacility. As described below, the Prior Credit Agreement was replacedwith the Amended and Restated Credit Agreement pursuant to the January2004 Refinancing.

9

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt (continued)

    January 2004 Refinancing and12.50% Senior Notes Due 2009

On January 16, 2004,Panavision consummated a series of transactions to refinance itsindebtedness under the Prior Credit Agreement (the"January 2004 Refinancing"). As part of theJanuary 2004 Refinancing, Panavision sold, in a private placement,$104.2 million of senior secured notes (the "SeniorNotes") bearing interest at a rate of 12.50%,payable quarterly, with a maturity date of January 16, 2009. The SeniorNotes were sold at an original issue discount of approximately4% for an aggregate purchase price of $100.0 million. The SeniorNotes are secured by a second-priority lien on substantially all of theCompany's assets. The indenture pursuant to which the SeniorNotes were issued (the "2004 Indenture")requires that, among other provisions, Panavision achieve certainEBITDA levels and abide by certain other restrictive covenants,including limitations on indebtedness, liens, disposition of assets,and certain restricted payments including dividends to stockholders.Upon certain events of default under the 2004 Indenture, the SeniorNotes will bear interest at 2.5% above the rate otherwiseapplicable.

As part of the January 2004 Refinancing, Panavisionissued to PX Holding Corporation ("PXHolding") 215,274 shares of new Series D Preferred Stockin exchange for (a) 159,644 shares of Series C Cumulative Pay-in-kindPreferred Stock, par value $0.01 per share (the "Series CPreferred Stock"), of Panavision, held by PX Holding(together with approximately $13.2 million of accumulated dividendsthereon); (b) $23.0 million in cash; (c) the retirement of allprincipal and interest (an aggregate of $10,180,930) owed as of January16, 2004 under the MacAndrews Line; (d) 33.3 shares of common stock ofPANY Rental Inc. ("PANY Rental") having afair market value of $0.7 million (such that, as of January 16, 2004,Panavision owned 100% of the outstanding shares of PANY Rental);(e) the retirement of all amounts (consisting of $630,780 in principaland $82,913 in accrued and unpaid interest) owed by PANY Rental to PXHolding pursuant to a certain promissory note held by PX Holding; and(f) the retirement of all amounts (consisting of $7.8 million inprincipal and unpaid interest) owed to MacAndrews & Forbes Holdingsunder a certain promissory note in the principal amount of $6.7million, dated July 1, 2002, issued by Panavision to M & FWorldwide Corp. and subsequently acquired by MacAndrews & ForbesHoldings. Panavision also issued to PX Holding 1,381,690 shares of newSeries E Non-Cumulative Perpetual Participating Preferred Stock, parvalue $0.01 per share, (the "Series E PreferredStock") in exchange for 1,381,690 shares of Series ANon-Cumulative Perpetual Participating Preferred Stock, par value $0.01per share (the "Series A Preferred Stock").As a result of the January 2004 Refinancing transactions, all of theoutstanding shares of Series A and Series C Preferred Stock weretransferred to Panavision. In addition, MacAndrews & Forbes Inc.increased the amount of the Second MacAndrews Line to $20.0 million andextended the maturity date to April 16, 2009.

Panavision usedproceeds from the sale of the Senior Notes and the issuance of Series DPreferred Stock to reduce the indebtedness under the Prior CreditAgreement by $115.4 million, and replaced the Prior Credit Agreementwith an Amended and Restated Credit Agreement (the"Amended Credit Agreement") with the lendersunder the Prior Credit Agreement. The Amended Credit Agreement providesfor a single term loan facility in the principal amount of $135.6million repayable in quarterly installments with a final maturity ofJanuary 12, 2007, except that the term facility shall be due onDecember 1, 2005 if any of the 9 5/8% Notesremain outstanding on that date. Panavision is considering variousalternatives with respect to the repayment or refinancing of the9 5/8% Notes. While there can be no assurance,Panavision expects that the 9 5/8% Notes will berefinanced or otherwise repaid by December 1, 2005. PX Holding hascommitted (the "9 5/8% NotesCommitment"), in the event that the9 5/8% Notes are not repaid, retired orrefinanced prior to December 1, 2005, or the applicable provision ofthe Amended Credit Agreement is not amended by such time such thatPanavision's term loans do not become immediately due andpayable, to provide financial support sufficient to allow therepayment, retirement or refinancing of the9 5/8% Notes.

10

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt (continued)

The term facility bears interest at eitherthe ABR or Eurodollar Rate (as defined in the Amended Credit Agreement)plus a margin of 5.25% in the case of ABR loans or 6.25%in the case of Eurodollar Loans. The term facility under the AmendedCredit Agreement is secured on substantially the same basis asindebtedness under the Prior Credit Agreement. In connection with theAmended Credit Agreement Panavision paid fees to lenders andprofessional advisors of approximately $3.5 million, including anoriginal issue discount fee of approximately $2.0 million.Approximately $3.1 million of the fees paid were expensed in 2004.

Under the Amended Credit Agreement, Panavision is required to repay$7.2 million in principal in 2005. In addition, the Amended CreditAgreement revised certain financial tests and other restrictivecovenants set forth in the Prior Credit Agreement, including requiredEBITDA (as defined therein), limitations on indebtedness, and otherprovisions. As defined in the Amended Credit Agreement and 2004Indenture, EBITDA includes adjustments for certain severance expenses,refinancing expenses, foreign exchange (gain) loss, other non-cashcharges and the pro forma effect of acquisitions and dispositions.

    Amendments to Amended Credit Agreement and 2004Indenture

    EFILM Proceeds Amendment

Principally to provide a mechanism for the reinvestment of theproceeds of the sale of EFILM, on August 11, 2004, Panavision and theother parties to the Amended Credit Agreement entered into an amendmentand waiver to the Amended Credit Agreement ("FirstAmendment and Waiver"). To provide a similar mechanism forthe reinvestment of the proceeds of the EFILM Sale under the 2004Indenture, on August 11, 2004, Panavision and Wilmington Trust Company,as Trustee, entered into a supplemental indenture("Supplemental Indenture"). On September 30,2004, in accordance with the terms of the Amended Credit Agreement andthe 2004 Indenture, upon repayment of $1.3 million to Federal FinancialCredit Inc., PANY Rental and TFN Lighting Corp. (each subsidiaries ofPanavision) became guarantors under those debt instruments.

    Preferred Stock Exchange

On November16, 2004, Panavision issued 30,610,810 shares of common stock, parvalue $.01 per share, to PX Holding, in exchange for all Series DPreferred Stock and all Series E Preferred Stock held by PX Holding(the "Exchange"). The Exchange was completedpursuant to a letter agreement, dated November 16, 2004, betweenPanavision and PX Holding (the "LetterAgreement").

In this transaction, Panavisionissued:

|              |                                                                                                                                                                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | 29,229,120 shares of CommonStock in exchange for the 215,274 shares of Series D Preferred Stockheld by PX Holding at an exchange ratio of 125 shares of Common Stockfor each $1,000 of outstanding liquidation preference or accrued andunpaid dividends, valuing the Common Stock at $8.00 per share;and |

|              |                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------|
| •  | 1,381,690 shares of Common Stock inexchange for the 1,381,690 shares of Series E Preferred Stock held byPX Holding. |

This transaction was unanimously approved by anindependent Special Committee of Panavision's Board of Directors.In the Letter Agreement, PX Holding agreed, among other things, tocertain restrictions on its ability to acquire Panavision'sremaining Common Stock or to transfer the shares it holds. After givingeffect to the transaction, PX Holding holds approximately 96.3%of the Common Stock. The transaction follows a May 13, 2004 offer byMacAndrews & Forbes Holdings initially valuing the Common Stock at$7.00 per share.

11

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt (continued)

Following the consummation of theExchange, no shares of Series D Preferred Stock or Series E PreferredStock were outstanding. Accordingly, effective November 16, 2004,Panavision eliminated the certificates of designation for the Series DPreferred Stock and Series E Preferred Stock.

The SpecialCommittee was represented by independent counsel and retained Peter J.Solomon Company L.P. as its independent financial advisor. Inconnection with its recommendation that the Board of Directors approvethe transaction, the Special Committee received an opinion from PeterJ. Solomon Company L.P. that the consideration paid by PX Holding inthe transaction was fair, from a financial point of view, toPanavision.

In addition, in connection with the Exchange,Panavision entered into a Second Amendment and Consent, dated as ofNovember 15, 2004, with respect to Panavision's Amended CreditAgreement.

    WFW Asset Acquisition

In connection with the Panavision acquisition of the WFW camerainventory in Canada (the "WFW Acquisition"),Panavision entered into a Third Amendment, dated as of December 29,2004 with respect to Panavision's Amended CreditAgreement.  In addition, in connection with the WFW Acquisition,Panavision entered into a Fourth Supplemental Indenture, dated as ofDecember 29, 2004, with respect to the 2004 Indenture.

    March 2005 Amendment

Panavisionentered into a Fourth Amendment, dated as of March 30, 2005, to theAmended Credit Agreement and Fifth Supplemental Indenture, dated as ofMarch 30, 2005, with respect to the 2004 Indenture. This amendment andindenture supplement was entered into principally to (a) reducerequired EBITDA levels, as provided in the Amended Credit Agreement, to$52.0 million, $54.0 million, $54.0 million and $58.0 million for thetwelve-month periods ended March 31, 2005, June 30, 2005, September 30,2005 and December 31, 2005, respectively, (b) extend the date on whichthe Term Facility under the Amended Credit Agreement shall be due ifthe 9 5/8% Notes remain outstanding fromSeptember 1, 2005 to December 1, 2005, (c) increase the limitation oncapital expenditure, as defined in the Amended Credit Agreement, from$25.0 million to $37.5 million and (d) permit the increase of theSecond MacAndrews Line to $32.0 million.

5.    PreferredStock Transactions

On January 16, 2004, as part of the January2004 Refinancing, the Company issued to PX Holding 215,274 shares ofnew Series D Preferred Stock. The Series D Preferred Stock wasnon-voting, had a liquidation preference of $1,000 per share plusaccrued and unpaid dividends, and entitled the holder to cumulativedividends at a rate of 10% per annum regardless of whetherdeclared or earned. Additionally, the Series D Preferred Stock wassubject to redemption in certain circumstances upon a change ofcontrol. The Company also issued to PX Holding 1,381,690 shares ofSeries E Preferred Stock in exchange for 1,381,690 shares of Series APreferred Stock. The Series E Preferred Stock was entitled to one voteper share, voting together with the Common Stock as a single class, hada liquidation preference of $1.00 per share plus accrued and unpaiddividends, and provided for non-cumulative cash dividends at an annualrate of $0.05 per share if declared by the Company.

The Series APreferred Stock was voting and was entitled to non-cumulative dividendsat a rate of $0.05 per share per annum payable, if declared, quarterlyon each March 31, June 30, September 30 and December 31. In addition,the Series A Preferred Stock had also participated pro rata on ashare-for-share basis with the common stock, par value $0.01 per share,of the Company ("Common Stock") with respectto any dividends declared or paid on the Common Stock.

12

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

5.    PreferredStock Transactions (continued)

As a result of the January 2004Refinancing transactions, all of the outstanding shares of Series A andSeries C Preferred Stock were transferred to the Company, and aCertificate of Elimination was filed for each series.

As alsodescribed in Note 4 of this Quarterly Report on Form 10-Q and in Notes12 and 13 of the Company's 2004 Annual Report on Form 10-K, inNovember 2004, the Company issued to PX Holding 30,610,810 shares ofcommon stock, par value $0.01 per share, in exchange for all Series Dand Series E Preferred Stock outstanding. A Certificate of Eliminationwas filed for each series. At March 31, 2005, the Company does not haveany preferred stock issued and outstanding.

6.    SegmentInformation

The Company has one reportable segment, the rentalof camera systems, lighting systems and other equipment, and the salesof related products. These activities are conducted through theCompany's owned-and-operated facilities and its network ofindependent distributors in a number of geographic locationsprincipally in the United States and the United Kingdom. The relativerelationship of activity in individual geographic locations has notchanged significantly during the quarter ended March 31, 2005 from thatdisclosed in Note 8 of the Company's 2004 Annual Report on Form10-K.

No one customer accounted for more than 10 percent of theCompany's consolidated net revenues for the three months endedMarch 31, 2005 and March 31, 2004.

7.    ComprehensiveLoss

Components of accumulated other comprehensive loss are asfollows (inthousands):

|                                       |  |                           |         |         |  |        |         |         |  |        |
|---------------------------------------|--|---------------------------|---------|---------|--|--------|---------|---------|--|--------|
|                                  |  | ThreeMonths EndedMarch31, |
|                                  |  | 2005                      |         | 2004    |
| Netloss                               |  | $                         | (11,001 | )  |  | $      | (13,967 | )  |  |   |   |   |
| Foreigncurrency translationadjustment |  |                      | (1,038  | )  |  |   | (365    | )  |
| Totalcomprehensiveloss                |  | $                         | (12,039 | )  |  | $      | (14,332 | )  |
|                                       |

8.    NetLoss Per Share

For the three months ended March 31, 2005 and2004, the basic and diluted per share data is based on theweighted-average number of common shares and dilutive potential commonshares outstanding during the period. Potential common shares,consisting of outstanding stock options and warrants, are not includedin the diluted loss per share calculation since they areantidilutive.

13

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

8.    NetLoss Per Share (continued)

The following table sets forth thecomputation for basic and diluted earnings per share (in thousands,except per shareinformation):

|                                                                                        |  |                            |         |         |  |        |         |         |  |  |
|----------------------------------------------------------------------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                   |  | ThreeMonths Ended March31, |
|                                                                                   |  | 2005                       |         | 2004    |
| Numerators:                                                                            |  |
| Netloss from continuingoperations                                                      |  | $                          | (11,001 | )  |  | $      | (14,031 | )  |
| SeriesC Preferred Stock accumulateddividend                                            |  |                       | — |    |  |   | (765    | )  |
| SeriesD Preferred Stock accumulated dividend                                           |  |                       | — |    |  |   | (4,485  | )  |
| Numeratorsfor basic and diluted loss per share attributable to commonstockholders:     |  |
| Net loss from continuingoperations                                                     |  |                       | (11,001 | )  |  |   | (19,281 | )  |
| Netincome from discontinuedoperations                                                  |  |                       | — |    |  |   | 64      |    |
| Netloss                                                                                |  | $                          | (11,001 | )  |  | $      | (19,217 | )  |
| Denominator:                                                                           |  |
| Denominatorfor basic income (loss) per share — weighted averageshares            |  |                       | 39,381  |    |  |   | 8,770   |    |
| Effect ofdilutive securities — stock options andwarrants                         |  |                       | — |    |  |   | — |    |
| Denominatorfor diluted income (loss) per share – adjusted weighted averageshares |  |                       | 39,381  |    |  |   | 8,770   |    |
| Income(loss) per share — basic anddiluted:                                       |  |                       |    |    |  |   |    |    |
| Continuingoperations                                                                   |  | $                          | (0.28   | )  |  | $      | (2.20   | )  |
| Discontinuedoperations                                                                 |  |                       | — |    |  |   | 0.01    |    |
| Income(loss) per share — basic anddiluted                                        |  | $                          | (0.28   | )  |  | $      | (2.19   | )  |
|                                                                                        |

9.    Stock-BasedBenefits

The Company follows the provisions of Statement ofFinancial Accounting Standards ("SFAS") No.123, "Accounting for Stock-BasedCompensation" ("SFAS 123"),which permits the Company to continue to follow the intrinsic valuemethod set forth in Accounting Principles Board Opinion No. 25,"Accounting for Stock Issued to Employees"("APB 25"), but disclose the pro formaeffects on net income (loss) had the fair value of the options beenexpensed.

In December 2002, the FASB issued SFAS No. 148,"Accounting for Stock-Based Compensation-Transition andDisclosure" ("SFAS 148"), whichamends SFAS 123. SFAS 148 provides alternative methods of transitionfor a voluntary change to the fair value based method of accounting forstock-based employee compensation. In addition, SFAS 148 amends thedisclosure requirements of SFAS 123 to require more prominent and morefrequent disclosures in financial statements about the effects ofstock-based compensation. The Company has complied with the disclosurerequirements of SFAS 148.

Had the Company applied the fair valuerecognition provision of FASB No. 123 to stock-based employeecompensation, there would have been no effect on reported net loss ornet loss per share for the three months ended March 31, 2005 and2004.

14

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PANAVISIONINC.NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

10.    Other Income(Expense), Net

The components of Other Income (Expense), Netfor the three-month periods ended March 31, 2005 and 2004 are asfollows (inthousands):

|                                           |  |                           |         |         |  |        |         |         |  |  |
|-------------------------------------------|--|---------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                      |  | ThreeMonthsEnded March31, |         |    |
|                                      |  | 2005                      |         | 2004    |
| Netgain on sales of property andequipment |  | $                         | 462     |    |  | $      | 99      |    |
| Minorityinterest income                   |  |                      | — |    |  |   | 18      |    |
| Loss ofequity affiliate                   |  |                      | — |    |  |   | (22     | )  |
| Feesfrom relatedparty                     |  |                      | 105     |    |  |   | — |    |
| Other                                     |  |                      | (49     | )  |  |   | (3      | )  |
| Totalother income, net                    |  | $                         | 518     |    |  | $      | 92      |    |
|                                           |

11.    DiscontinuedOperations

In August 2004, the Company disposed of its80% interest in EFILM. Accordingly, both EFILM and its holdingcompany LPPI are presented as discontinued operations in the condensedconsolidated financial statements and the accompanying notes.

Revenue and income before income taxes from discontinued operationsfor the three-month periods ended March 31, 2005 and 2004 were asfollows (inthousands):

|                          |  |                           |                                 |        |  |   |       |        |  |  |
|--------------------------|--|---------------------------|---------------------------------|--------|--|---|-------|--------|--|--|
|                     |  | ThreeMonths EndedMarch31, |
|                     |  | 2005                      |                                 | 2004   |
| Revenue                  |  | $                         |     — |   |  | $ | 5,872 |   |
| Incomebefore incometaxes |  | $                         |     — |   |  | $ | 122   |   |
|                          |

12.    SubsequentEvent

On April 8, 2005, Panavision Europe Limited("PVE"), a subsidiary of the Company, enteredinto an operating lease arrangement with a related party, PX (UK)Limited ("PX (UK)"), a subsidiary of PXHolding, whereby PVE will lease from PX (UK) certain camera andlighting equipment. The Company believes the rental payments called forin the lease are on arms-length terms.

15

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PANAVISIONINC.

Item2.    Management's Discussion and Analysis of FinancialCondition and Results of Operations

Overview

In thefollowing discussion, unless the context requires otherwise, the terms"Panavision," "we,""our," "ours," and"us" refer to Panavision Inc. and itssubsidiaries.

Our revenue is derived from three sources: (i)camera rental operations, (ii) lighting rental operations, and (iii)sales and other revenue. Revenue from camera rental operations consistsof the rental of camera systems, lenses and accessories to the motionpicture and television industries through a network ofowned-and-operated ("O&O") rental officeslocated throughout North America, Europe and the Asia Pacific region,and through a network of independent distributors responsible for therental of our equipment in locations not served by ourO&O's.

Our lighting rental operations generate revenuethrough the rental of lighting, lighting grip, transportation anddistribution equipment, as well as mobile generators, which are allused in the production of feature films, television programs,commercials and other events. We own and operate lighting rentalfacilities in the United States, United Kingdom, Canada, Australia andNew Zealand. Revenue generated by Lee Lighting, our lighting rentalbusiness located in the United Kingdom, comprises the majority of ourlighting rental operations revenue.

Sales and other revenue iscomprised of: (i) the manufacture and sale of lighting filters throughLee Filters in the United Kingdom and the United States; and (ii) salesof various consumable products, such as film stock, light bulbs andgaffer tape, which are used in all types of productions.

Weconsider revenue from international business to be that revenue whichis generated from the rental of our equipment by productions that arelocated at production sites outside of the United States. We record themajority of our non-domestic business in the local currency("LC") of the office initiating thetransaction. When LC-denominated activity is converted into U.S.dollars ("USD") for presentation in theCondensed Consolidated Financial Statements, the change in the value ofLCs relative to the USD will have an impact on both the balance sheetand the revenues and costs analyzed below. While both rental revenuesand costs of rental revenues in any given country will typically beaffected in the same manner, a change in gross margin can be amplifiedor mitigated by the effect of foreign exchange rate changes.

This section should be read in conjunction with the ConsolidatedFinancial Statements and accompanying Notes included in our AnnualReport on Form 10-K for the year ended December 31, 2004 and theCritical Accounting Policies as disclosed under Item 7 in our AnnualReport on Form 10-K for the year ended December 31, 2004.

Results of Operations

The followingdiscussion and analysis includes the Company's consolidatedresults of operations for the first fiscal quarter of 2005 as comparedto the same quarter of 2004.

Quarter EndedMarch 31, 2005 Compared to Quarter Ended March 31, 2004

The USDweakened, comparing the quarter ended March 31, 2005 with the quarterended March 31, 2004, against most major foreign currencies fromcountries in which we do business. The following table presents theaverage exchange rates we used during the respective quarters of 2005and 2004 in translating LC-denominated activity (USD: 1LC)

16

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PANAVISIONINC.

|                        |  |                     |       |                   |  |                   |       |         |  |                |       |         |  |        |       |         |  |        |       |         |  |  |
|------------------------|--|---------------------|-------|-------------------|--|-------------------|-------|---------|--|----------------|-------|---------|--|--------|-------|---------|--|--------|-------|---------|--|--|
| QuarterEnded March 31, |  | U. K. PoundSterling |       | Australian Dollar |  | New ZealandDollar |       | Euro    |  | CanadianDollar |
| 2005                   |  |                | 1.902 |              |  |              | 0.778 |    |  |           | 0.715 |    |  |   | 1.319 |    |  |   | 0.812 |    |
| 2004                   |  |                | 1.831 |              |  |              | 0.763 |    |  |           | 0.672 |    |  |   | 1.243 |    |  |   | 0.756 |    |
| Increasevs.USD         |  |                | 3.9   | %            |  |              | 2.0   | %  |  |           | 6.4   | %  |  |   | 6.1   | %  |  |   | 7.4   | %  |
|                        |

Thesecurrency rate changes have had a significant impact on the amounts ofrental revenues, costs of revenues, and operating costs translated fromLC into USD.

Recent acquisition and divestiture activity alsoimpacted the quarter-to-quarter comparison. In May 2004, we sold ourlighting assets in Canada, thereby exiting the lighting business inthat country. In August 2004, we purchased Technovision France("Technovision"), a film equipment rentalcompany in Paris. Results of Technovision operations have beenconsolidated effective August 14, 2004. On September 16, 2004, wepurchased the outstanding 49% interest in DHD Ventures, LLC("DHD"), making DHD our wholly-ownedsubsidiary, at which point we began consolidating DHD's resultsof operations. Prior to this purchase DHD was reported using the equitymethod of accounting. Additionally, in December, 2004, we purchased allthe film, high definition and video camera equipment of William F.White International Inc. ("WFW") in Canada.Therefore, the quarter ended March 31, 2005 includes revenues and costsfrom Technovision, DHD and the WFW assets but no revenue or costs fromthe Canadian lighting rental operation, whereas the quarter ended March31, 2004 includes revenue and costs from the Canadian lighting rentaloperation but no revenues or costs from Technovision, DHD or WFWassets, other than commission revenue from DHD.

Camera RentalOperations

|                |  |                        |        |                    |  |        |        |         |  |        |        |         |  |        |        |          |  |  |
|----------------|--|------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|----------|--|--|
| (inthousands)  |  | Quarter Ended March31, |        | Increase(Decrease) |
|           |  | 2005                   |        | 2004               |  |   |        | %       |
| Rentalrevenue  |  | $                      | 31,806 |               |  | $      | 30,844 |    |  | $      | 962    |    |  |   | 3.1    | %   |
| Costof rentals |  |                   | 19,466 |               |  |   | 16,399 |    |  |   | 3,067  |    |  |   | 18.7   | %   |
| Grossmargin    |  | $                      | 12,340 |               |  | $      | 14,445 |    |  | $      | (2,105 | )  |  |   | (14.6  | )%  |
| Cost%          |  |                   | 61.2   | %             |  |   | 53.2   | %  |  |   |   |    |  |   |   |     |
|                |

Themain factors underlying the increase in camera rental revenue wereadditional revenue from the acquisitions of Technovision and DHD ofapproximately $1.6 million. and the positive translation effect offoreign exchange rate changes, primarily European currencies, of $0.8million. Excluding the effects of translation and the Technovision andDHD acquisitions, camera rental revenue declined approximately $1.3million. Revenues from the feature film market declined approximately$1.8 million, primarily in Europe, while revenue from the commercialsmarket declined $0.2 million. Partially offsetting these declines wereincreases from the television sector and other revenues (primarilyagents) of $0.3 million and $0.4 million, respectively.

The WFWassets were integrated into our worldwide operations and as such, theimpact of their utilization cannot be directly calculated. However, weestimate the impact in terms of increased revenue to have been of asimilar magnitude as the Technovision and DHD acquisitions

Costof camera rentals increased $1.4 million as the result of theTechnovision and DHD acquisitions and $0.5 million due to thetranslation effect of foreign exchange rate changes. Excluding theseimpacts, cost of camera rentals increased $1.2 million. The majority ofthe increase took place in the U.S. operations, primarily due toincreased depreciation charges on recent capital expenditures, alongwith higher maintenance and costs of subrentals (the cost of our havingto rent additional equipment not currently available in our inventory)and operating costs associated with the WFW assets. Additionally, costof camera rentals for the quarter ended March 31, 2005 includedseverance costs of approximately $0.3 million reflecting personnelreductions in Europe as part of our efforts to reduce fixed operatingcosts.

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PANAVISIONINC.

Excluding the positive effects of currencychanges of $0.3 million and the Technovision and DHD acquisitions $0.1million, camera rental gross margin declined approximately $2.5million. The decline was essentially split between U.S. and Europeanoperations. In the U.S., the increased costs discussed above, primarilydepreciation, eroded gross margin by 8%. In Europe, the declinein rental revenues far outpaced the decline in costs, given arelatively fixed cost structure with a variable, project-based revenuestream.

Lighting Rental Operations

|                |  |                        |       |                    |  |        |       |         |  |        |        |        |  |        |        |         |  |  |
|----------------|--|------------------------|-------|--------------------|--|--------|-------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands)  |  | Quarter Ended March31, |       | Increase(Decrease) |
|           |  | 2005                   |       | 2004               |  |   |       | %       |
| Rentalrevenue  |  | $                      | 9,704 |               |  | $      | 8,522 |    |  | $      | 1,182  |   |  |   | 13.9   | %  |
| Costof rentals |  |                   | 8,160 |               |  |   | 8,144 |    |  |   | 16     |   |  |   | 0.2    | %  |
| Grossmargin    |  | $                      | 1,544 |               |  | $      | 378   |    |  | $      | 1,166  |   |  |   | 308.5  | %  |
| Cost%          |  |                   | 84.1  | %             |  |   | 95.6  | %  |  |   |   |   |  |   |   |    |
|                |

Excluding a $0.3million increase from the positive effects of foreign currency ratechanges, lighting rental revenue increased $0.9 million. Revenue fromLee Lighting in the U.K. improved $1.0 million due to increases in bothmotion picture features and television as compared with the same periodin 2004. Revenues were also up in the Asia Pacific region due to anincrease in major motion picture features, while the Canada and U.S.regions declined approximately $0.3 million each. The Canada declinewas due to the May, 2004 sale of all our lighting assets in thatcountry.

Cost of lighting rentals were flat compared with thecorresponding 2004 quarter, although there were offsetting changes. Theeffect of foreign currency rate changes increased the cost of lightingrentals by $0.2 million, but was offset by cost declines of the sameamount. Cost increases totaling $0.4 million at Lee Lighting and AsiaPacific were offset by $0.6 million of cost declines in the U.S. andCanada. The improvement in gross margin was due to higher marginfeature film projects in the Asia Pacific region in addition toimproved profitability at Lee Lighting.

Sales andOther

|                |  |                        |        |                    |  |        |       |         |  |        |        |        |  |        |        |         |  |  |
|----------------|--|------------------------|--------|--------------------|--|--------|-------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands)  |  | Quarter Ended March31, |        | Increase(Decrease) |
|           |  | 2005                   |        | 2004               |  |   |       | %       |
| Rentalrevenue  |  | $                      | 10,626 |               |  | $      | 9,694 |    |  | $      | 932    |   |  |   | 9.6    | %  |
| Costof rentals |  |                   | 5,984  |               |  |   | 5,596 |    |  |   | 388    |   |  |   | 6.9    | %  |
| Grossmargin    |  | $                      | 4,642  |               |  | $      | 4,098 |    |  | $      | 544    |   |  |   | 13.3   | %  |
| Cost%          |  |                   | 56.3   | %             |  |   | 57.7  | %  |  |   |   |   |  |   |   |    |
|                |

Excludinga $0.3 million increase from the positive effects of foreign currencyrate changes, sales and other revenue increased $0.6 million. Revenuesfrom Lee Filters, with operations in both the U.K and U.S., increased$0.8 million partially offset by small changes at other locations. Theimprovement at Lee Filters was due primarily to several large-volumesales of special effects glasses.

Cost of sales and otherincreased $0.2 million from the positive effects of foreign currencyrate changes, with the remainder of the increase related to theincrease in Lee Filters revenues.

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OperatingCosts

|                                   |  |                        |        |                    |  |        |        |        |  |        |       |        |  |        |      |         |  |  |
|-----------------------------------|--|------------------------|--------|--------------------|--|--------|--------|--------|--|--------|-------|--------|--|--------|------|---------|--|--|
| (inthousands)                     |  | Quarter Ended March31, |        | Increase(Decrease) |
|                              |  | 2005                   |        | 2004               |  |   |        | %      |
| Selling,general andadministrative |  | $                      | 19,024 |               |  | $      | 16,160 |   |  | $      | 2,864 |   |  |   | 17.7 | %  |
| Researchanddevelopment            |  |                   | 1,611  |               |  |   | 1,460  |   |  |   | 151   |   |  |   | 10.3 | %  |
|                                   |

Selling,general and administrative ("SG&A")expenses increased $0.4 million as the result of foreign exchange ratechanges and $0.3 million as the result of the Technovision and DHDacquisitions. Excluding these items, SG&A increased $2.2 millioncompared to the corresponding quarter of 2004. The majority of theincrease related to severance costs of approximately $1.9 million inconnection with the departure of several senior executives as part ofthe Company's effort to reduce operating expenses. The balance ofthe increase related to higher professional fees associated withregulatory compliance requirements and general salary inflationpartially offset by lower incentive compensation expenses.

Research and development expenses related to the Company'scontinuing new product development efforts.

Interest, Taxes andOther

|                             |  |                        |        |         |  |                              |        |         |  |        |       |         |  |        |
|-----------------------------|--|------------------------|--------|---------|--|------------------------------|--------|---------|--|--------|-------|---------|--|--------|
| (inthousands)               |  | Quarter Ended March31, |        |
|                        |  | 2005                   |        | 2004    |  | Favorable(Unfavorable)Change |
| Interestexpense             |  | $                      | (8,352 | )  |  | $                            | (7,881 | )  |  | $      | (471  | )  |  |   |   |   |
| Interest income             |  |                   | 89     |    |  |                         | 98     |    |  |   | (9    | )  |  |   |   |   |
| Foreignexchange gain (loss) |  |                   | (396   | )  |  |                         | 251    |    |  |   | (647  | )  |  |   |   |   |
| Refinancingexpense          |  |                   | (154   | )  |  |                         | (6,470 | )  |  |   | 6,316 |    |  |   |   |   |
| Otherincome, net            |  |                   | 518    |    |  |                         | 92     |    |  |   | 426   |    |  |   |   |   |
| Income taxprovision         |  |                   | (597   | )  |  |                         | (1,412 | )  |  |   | 815   |    |
|                             |

Theincrease in interest expense primarily reflected higher effectiveinterest rates during the 2005 first quarter, partially offset by loweraverage debt balances compared to the corresponding quarter of 2004.The lower average debt balances resulted from the January 2004Refinancing (discussed below in "Long-TermDebt"), as well as scheduled principal payments ofoutstanding debt.

Foreign exchange activity resulted in a lossfor the quarter ended March 31, 2005 as compared with a foreignexchange gain for the quarter ended March 31, 2004. The increase wasprimarily due to the effects of the fluctuating foreign currencies onthe foreign currency-denominated intercompany balances held in theU.S.

Refinancing expense of $6.5 million for the quarter endedMarch 31, 2004 reflects costs incurred in connection with theCompany's January 2004 Refinancing and costs previously incurredin connection with the Company's Prior Credit Agreement(discussed below in "Long-Term Debt"). Thesecosts represent primarily lender and professional fees incurred by theCompany.

The income tax provision for the quarter ended March31, 2005 comprises income taxes on profitable foreign operations andforeign taxes withheld at source. The Company did not recognize any netbenefit from tax losses as uncertainty as to future utilizationresulted in an increase to the allowance against deferred tax assets inthe same amount as additional deferred tax assets generated. For thequarter ended March 31, 2004 the Company recorded a $4.2 million taxbenefit associated with domestic tax losses. In assessing therecoverability of the related increase to deferred tax assets, theCompany increased its valuation allowance by $3.3 million, resulting ina net domestic tax benefit of $0.9 million. This was offset by a $2.4million provision relating to profitable foreign operations, based onapplication of the Company's effective tax rate on full-yearincome, and foreign taxes withheld at source. See Note 7 toConsolidated Financial Statements included in the Company'sAnnual Report on Form 10-K for a discussion of the Company's TaxSharing Agreements.

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Under applicable Internal Revenue Serviceregulations, as a result of the December 3, 2002 settlement of certainshareholder litigation related to the 2001 purchase of shares of theCompany's Common Stock from PX Holding by M&F Worldwide Corp.(the "M&F Settlement"), the Company maynot join in filing a consolidated federal income tax return with eitherMacAndrews & Forbes Holdings or the Company's subsidiariesuntil May 2006 without consent from the Internal Revenue Service.Accordingly, since the December 3, 2002 effective date of the M&FSettlement, the Company files separate federal income tax returns forthe Company and incorporated subsidiaries. The Company does not believethat deconsolidation of its federal income tax returns has had or willhave a material adverse effect on the Company's business orfinancial condition.

Liquidity and Capital Resources

The following table sets forth certain information from theCompany's condensed consolidated statements of cash flows for theperiods indicated (inthousands):

|                               |  |                           |        |         |  |        |        |         |  |  |
|-------------------------------|--|---------------------------|--------|---------|--|--------|--------|---------|--|--|
|                          |  | ThreeMonths EndedMarch31, |
|                          |  | 2005                      |        | 2004    |
| Netcash provided by (usedin): |  |                      |   |    |  |   |   |    |
| Operatingactivities           |  | $                         | (1,175 | )  |  | $      | (3,041 | )  |
| Investingactivities           |  |                      | (7,303 | )  |  |   | (5,177 | )  |
| Financingactivities           |  |                      | 5,876  |    |  |   | 7,394  |    |
|                               |

Cash usedin operating activities for the three months ended March 31, 2005,totaled $1.2 million comprised of the net loss from continuingoperations of $11.0 million, adjusted for depreciation and amortizationof $11.0 million, and the net change in working capital (excludingcash) and other miscellaneous items of $1.2 million. The improvement ascompared with the same period of 2004 was due primarily to a lower netloss from continuing operations and a positive impact of workingcapital changes.

Cash used in investing activities during thethree months ended March 31, 2005 of $7.3 million consisted of capitalexpenditures net of proceeds from asset dispositions. The higher levelof capital expenditures was due primarily to expenditures related tothe GENESISTM digital camera systems and relatedaccessories. Cash provided by financing activities was $5.9 million,consisting of borrowings under the line of credit provided byMacAndrews & Forbes of $9.0 million, net of scheduled repaymentsunder the Amended Credit Agreement (as defined below in"Long-Term Debt") and payments under capitalleases of $2.7 million and deferred financing costs of $0.5 millionrelated to the March 2005 Amendment (defined below).

Cash usedin operating activities for the three months ended March 31, 2004,totaled $3.0 million comprised of the net loss of $14.0 million,adjusted for depreciation and amortization of $10.4 million, and thenet change in working capital (excluding cash) and other miscellaneousitems of $0.6 million. Total investing activities of $5.2 millionconsisted of capital expenditures net of proceeds of dispositions. Themajority of the capital expenditures were used to manufacture camerarental systems and accessories. Cash provided by financing activitieswas $7.4 million, which was comprised of repayments of $251.0 millionunder the Prior Credit Agreement, repayments of other long-term debt of$1.5 million, deferred financing costs of $0.4 million, borrowings of$135.6 million under the Amended Credit Agreement (defined below in"Long-Term Debt"), the issuance of $100.0million of Senior Notes (net of discount), a capital contribution fromMacAndrews & Forbes Holdings of $22.7 million, net of transactioncosts, and borrowing under a line of credit provided by MacAndrews& Forbes of $2.0 million.

As of March 31, 2005, the Companyhad a line of credit provided by MacAndrews & Forbes totaling $32.0million, under which approximately $18.2 million was drawn.

Although there can be no assurance, Panavision expects that cashflows from operations, borrowings under the revolving line of credit,and cash equity contributions and advances from affiliates will besufficient to enable Panavision to meet its anticipated operating,capital spending and debt service requirements through at least thenext twelve months.

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Long-Term Debt

    9 5/8% Notes

The9 5/8% Notes were issued at a discountrepresenting a yield to maturity of 9 5/8%.There were no periodic or interest payments through February 1, 2002.Thereafter, they bear interest at a rate of9 5/8% per annum, payable semi-annually onFebruary 1 and August 1 of each year, commencing August 1, 2002.

    MacAndrews Lines

On August 13, 2003, MacAndrews &Forbes Inc., (formerly MacAndrews & Forbes Holdings Inc.) agreed toamend an existing line of credit provided to Panavision to increase theamount available for borrowing from $4.0 million to $10.0 million andextend the maturity date to August 31, 2006 (as amended, the"MacAndrews Line"). In connection with anamendment to Panavision's Prior Credit Agreement (as definedbelow), on November 12, 2003, MacAndrews & Forbes Inc. agreed toprovide a second revolving line of credit (the "SecondMacAndrews Line") in the amount of $10.0 million at a rateequal to 50 basis points above the rate provided for in the revolvingfacility pursuant to the Prior Credit Agreement and a maturity date ofApril 15, 2004. As described below, in connection with the January 2004Refinancing (as defined below), (i) amounts outstanding under theMacAndrews Line were retired in exchange for shares of new Series DCumulative Pay-in-Kind Preferred Stock, par value $0.01 per share (the"Series D Preferred Stock") and (ii)MacAndrews & Forbes Inc. increased the amount of the SecondMacAndrews Line to $20.0 million and extended the maturity date toApril 16, 2009. On March 30, 2005, the Second MacAndrews Line wasamended and restated to increase the amount to $32.0 million. As ofMarch 31, 2005, Panavision had availability under the Second MacAndrewsline of approximately $13.8 million.

    Prior CreditAgreement

On June 4, 1998, Panavision entered into a CreditAgreement with a syndicate of lenders (as subsequently amended onSeptember 30, 1998, June 30, 1999, March 15, 2002, June 14, 2002,September 30, 2002, March 25, 2003 and November 12, 2003, the"Prior Credit Agreement"). Panavision'sobligations under the Prior Credit Agreement were secured bysubstantially all of Panavision's assets. The Prior CreditAgreement comprised two facilities, the Term Facility and the RevolvingFacility. As described below, the Prior Credit Agreement was replacedwith the Amended and Restated Credit Agreement pursuant to the January2004 Refinancing.

    January 2004 Refinancing and12.50% Senior Notes Due 2009

On January 16, 2004,Panavision consummated a series of transactions to refinance itsindebtedness under the Prior Credit Agreement (the"January 2004 Refinancing"). As part of theJanuary 2004 Refinancing, Panavision sold, in a private placement,$104.2 million of senior secured notes (the "SeniorNotes") bearing interest at a rate of 12.50%,payable quarterly, with a maturity date of January 16, 2009. The SeniorNotes were sold at an original issue discount of approximately4% for an aggregate purchase price of $100.0 million. The SeniorNotes are secured by a second-priority lien on substantially all of theCompany's assets. The indenture pursuant to which the SeniorNotes were issued (the "2004 Indenture")requires that, among other provisions, Panavision achieve certainEBITDA levels and abide by certain other restrictive covenants,including limitations on indebtedness, liens, disposition of assets,and certain restricted payments including dividends to stockholders.Upon certain events of default under the 2004 Indenture, the SeniorNotes will bear interest at 2.5% above the rate otherwiseapplicable.

As part of the January 2004 Refinancing, Panavisionissued to PX Holding Corporation ("PXHolding") 215,274 shares of new Series D Preferred Stockin exchange for (a) 159,644 shares of Series C Cumulative Pay-in-kindPreferred Stock, par value $0.01 per share (the "Series CPreferred Stock"), of Panavision, held by PX Holding(together with approximately $13.2 million of accumulated dividends

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PANAVISIONINC.

thereon); (b) $23.0 million in cash; (c) theretirement of all principal and interest (an aggregate of $10,180,930)owed as of January 16, 2004 under the MacAndrews Line; (d) 33.3 sharesof common stock of PANY Rental Inc. ("PANYRental") having a fair market value of $0.7 million (suchthat, as of January 16, 2004, Panavision owned 100% of theoutstanding shares of PANY Rental); (e) the retirement of all amounts(consisting of $630,780 in principal and $82,913 in accrued and unpaidinterest) owed by PANY Rental to PX Holding pursuant to a certainpromissory note held by PX Holding; and (f) the retirement of allamounts (consisting of $7.8 million in principal and unpaid interest)owed to MacAndrews & Forbes Holdings under a certain promissorynote in the principal amount of $6.7 million, dated July 1, 2002,issued by Panavision to M & F Worldwide and subsequently acquiredby MacAndrews & Forbes Holdings. The Series D Preferred Stock wasnon-voting, had a liquidation preference of $1,000 per share plusaccrued and unpaid dividends, and entitled the holder to cumulativedividends at a rate of 10% per annum regardless of whetherdeclared or earned. Additionally, the Series D Preferred Stock wassubject to redemption in certain circumstances upon a change ofcontrol. Panavision also issued to PX Holding 1,381,690 shares of newSeries E Non-Cumulative Perpetual Participating Preferred Stock, parvalue $0.01 per share, (the "Series E PreferredStock") in exchange for 1,381,690 shares of Series ANon-Cumulative Perpetual Participating Preferred Stock, par value $0.01per share (the "Series A Preferred Stock").The Series E Preferred Stock was entitled to one vote per share, votingtogether with the Common Stock as a single class, had a liquidationpreference of $1.00 per share plus accrued and unpaid dividends, andprovided for non-cumulative cash dividends at an annual rate of $0.05per share if declared by Panavision. As a result of the January 2004Refinancing transactions, all of the outstanding shares of Series A andSeries C Preferred Stock were transferred to Panavision. In addition,MacAndrews & Forbes Inc. increased the amount of the SecondMacAndrews Line to $20.0 million and extended the maturity date toApril 16, 2009.

Panavision used proceeds from the sale of theSenior Notes and the issuance of Series D Preferred Stock to reduce theindebtedness under the Prior Credit Agreement by $115.4 million, andreplaced the Prior Credit Agreement with an Amended and Restated CreditAgreement (the "Amended Credit Agreement")with the lenders under the Prior Credit Agreement. The Amended CreditAgreement provides for a single term loan facility in the principalamount of $135.6 million repayable in quarterly installments with afinal maturity of January 12, 2007, except that the term facility shallbe due on December 1, 2005 if any of the 9 5/8%Notes remain outstanding on that date. Panavision is consideringvarious alternatives with respect to the repayment or refinancing ofthe 9 5/8% Notes. While there can be noassurance, Panavision expects that the 9 5/8%Notes will be refinanced or otherwise repaid by December 1, 2005. PXHolding has committed (the "9 5/8%Notes Commitment"), in the event that the9 5/8% Notes are not repaid, retired orrefinanced prior to December 1, 2005, or the applicable provision ofthe Amended Credit Agreement is not amended by such time such thatPanavision's term loans do not become immediately due andpayable, to provide financial support sufficient to allow therepayment, retirement or refinancing of the9 5/8% Notes.

The term facility bearsinterest at either the ABR or Eurodollar Rate (as defined in theAmended Credit Agreement) plus a margin of 5.25% in the case ofABR loans or 6.25% in the case of Eurodollar Loans. The termfacility under the Amended Credit Agreement is secured on substantiallythe same basis as indebtedness under the Prior Credit Agreement. Inconnection with the Amended Credit Agreement Panavision paid fees tolenders and professional advisors of approximately $3.5 million,including an original issue discount fee of approximately $2.0 million.Approximately $3.1 million of the fees paid were expensed in 2004.

Under the Amended Credit Agreement, Panavision is required to repay$7.2 million in principal in 2005. In addition, the Amended CreditAgreement revised certain financial tests and other restrictivecovenants set forth in the Prior Credit Agreement, including requiredEBITDA (as defined therein), limitations on indebtedness, and otherprovisions. As defined in the Amended Credit Agreement and 2004Indenture, EBITDA includes adjustments for certain severance expenses,refinancing expenses, foreign exchange (gain) loss, other non-cashcharges and the pro forma effect of acquisitions and dispositions.

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The required level of EBITDA, as defined,for the last twelve months in the period ended March 31, 2005, was$52.0 million pursuant to the Amended Credit Agreement and $50.0million pursuant to the 2004 Indenture. The Company met the requiredlevel of EBITDA for the twelve-month period ended March 31, 2005.

    Amendments to Amended Credit Agreement and 2004Indenture

    EFILM Proceeds Amendment

Principally to provide a mechanism for the reinvestment of theproceeds of the sale of EFILM, on August 11, 2004, Panavision and theother parties to the Amended Credit Agreement entered into an amendmentand waiver to the Amended Credit Agreement ("FirstAmendment and Waiver"). To provide a similar mechanism forthe reinvestment of the proceeds of the EFILM Sale under the 2004Indenture, on August 11, 2004, Panavision and Wilmington Trust Company,as Trustee, entered into a supplemental indenture("Supplemental Indenture"). On September 30,2004, in accordance with the terms of the Amended Credit Agreement andthe 2004 Indenture, upon repayment of $1.3 million to Federal FinancialCredit Inc., PANY Rental and TFN Lighting Corp. (each subsidiaries ofPanavision) became guarantors under those debt instruments.

    Preferred Stock Exchange

On November16, 2004, Panavision issued 30,610,810 shares of common stock, parvalue $.01 per share to PX Holding, in exchange for all Series DPreferred Stock and all Series E Preferred Stock held by PX Holding(the "Exchange"). The Exchange was completedpursuant to a letter agreement, dated November 16, 2004, betweenPanavision and PX Holding (the "LetterAgreement").

In this transaction, Panavisionissued:

|              |                                                                                                                                                                                                                                                                                                           |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | 29,229,120 shares of CommonStock in exchange for the 215,274 shares of Series D Preferred Stockheld by PX Holding at an exchange ratio of 125 shares of Common Stockfor each $1,000 of outstanding liquidation preference or accrued andunpaid dividends, valuing the Common Stock at $8.00 per share;and |

|              |                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------|
| •  | 1,381,690 shares of Common Stock inexchange for the 1,381,690 shares of Series E Preferred Stock held byPX Holding. |

This transaction was unanimously approved by anindependent Special Committee of Panavision's Board of Directors.In the Letter Agreement, PX Holding agreed, among other things, tocertain restrictions on its ability to acquire Panavision'sremaining Common Stock or to transfer the shares it holds. After givingeffect to the transaction, PX Holding holds approximately 96.3%of the Common Stock. The transaction follows a May 13, 2004 offer byMacAndrews & Forbes Holdings initially valuing the Common Stock at$7.00 per share.

Following the consummation of the Exchange, noshares of Series D Preferred Stock or Series E Preferred Stock wereoutstanding. Accordingly, effective November 16, 2004, Panavisioneliminated the certificates of designation for the Series D PreferredStock and Series E Preferred Stock.

The Special Committee wasrepresented by independent counsel and retained Peter J. SolomonCompany L.P. as its independent financial advisor. In connection withits recommendation that the Board of Directors approve the transaction,the Special Committee received an opinion from Peter J. Solomon CompanyL.P. that the consideration paid by PX Holding in the transaction wasfair, from a financial point of view, to Panavision.

Inaddition, in connection with the Exchange, Panavision entered into aSecond Amendment and Consent, dated as of November 15, 2004, withrespect to Panavision's Amended Credit Agreement.

    WFW Asset Acquisition

In connectionwith the Panavision acquisition of the WFW camera inventory in Canada(the "WFW Acquisition"), Panavision enteredinto a Third Amendment, dated as of December 29, 2004 with respect

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to Panavision's Amended CreditAgreement.  In addition, in connection with the WFW Acquisition,Panavision entered into a Fourth Supplemental Indenture, dated as ofDecember 29, 2004, with respect to the 2004 Indenture.

    March 2005 Amendment

Panavisionentered into a Fourth Amendment, dated as of March 30, 2005, to theAmended Credit Agreement and Fifth Supplemental Indenture, dated as ofMarch 30, 2005, with respect to the 2004 Indenture. This amendment andindenture supplement was entered into principally to (a) reducerequired EBITDA levels, as provided in the Amended Credit Agreement, to$52.0 million, $54.0 million, $54.0 million and $58.0 million for thetwelve-month periods ended March 31, 2005, June 30, 2005, September 30,2005 and December 31, 2005, respectively, (b) extend the date on whichthe Term Facility under the Amended Credit Agreement shall be due ifthe 9 5/8% Notes remain outstanding fromSeptember 1, 2005 to December 1, 2005, (c) increase the limitation oncapital expenditure, as defined in the Amended Credit Agreement, from$25.0 million to $37.5 million and (d) permit the increase of theSecond MacAndrews Line to $32.0 million.

CapitalExpenditures, Liquidity Requirements and Other

The Companyintends to use cash provided by operating activities and its revolvinglines of credit to make additional capital expenditures primarily tomanufacture camera systems and accessories and purchase other rentalequipment. Based on projected revenues in 2005 and beyond, the Companyanticipates incurring a higher level of capital expenditures in 2005 ascompared to 2004.

Panavision is a holding company whoseprincipal material asset is the ownership interest in its subsidiaries.The Company's principal business operations are conducted by itssubsidiaries. Accordingly, the Company's source of cash to payits obligations is expected to be distributions with respect to itsownership interests in its subsidiaries. There can be no assurance thatits subsidiaries will generate sufficient cash flow to pay dividends ordistribute funds to the Company or that applicable state law andcontractual restrictions, including negative covenants contained in thedebt instruments of such subsidiaries, will permit such dividends ordistributions.

Off-Balance Sheet Arrangements

TheCompany does not have any off-balance sheet financing arrangements.

Seasonality

The Company's revenue and net income aresubject to seasonal fluctuations. In North America, the majority ofepisodic television programs cease filming in the second quarter forseveral months, and typically resume production in August. Feature filmproduction activity typically reaches its peak in the third and fourthquarters.

SFAS No. 142, "Goodwill and OtherIntangible Assets"

We performed an annualimpairment test relating to our goodwill and tradename, most recentlyas of December 31, 2004, and found that the fair values of our goodwilland our tradename are in excess of carrying value. In the absence ofindicators that an earlier assessment would be required, we willperform the annual impairment test of goodwill and tradename during thefourth quarter of fiscal 2005.

Forward-Looking Statements

This quarterly report on Form 10-Q for the quarter ended March 31,2005, as well as certain of our other public documents and electronicand oral disclosures, contains forward-looking statements that reflectmanagement's current assumptions and estimates of futureperformance and economic conditions. 

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Such statements are made in reliance uponthe safe harbor provisions of the Private Securities Litigation ReformAct of 1995. We caution investors that forward-looking statements aresubject to risks and uncertainties that may cause actual results andfuture trends to differ materially from those projected, stated, orimplied by the forward-looking statements and investors are cautionednot to place undue reliance on any forward-looking statements. Further,we encourage investors to read the summary of our critical accountingpolicies included in our Annual Report on Form 10-K for the year endedDecember 31, 2004 under the heading "Management'sDiscussion and Analysis of Financial Condition and Results ofOperations—Critical Accounting Policies," as suchdiscussion may be modified or supplemented by subsequent reports thatwe file with the Securities and Exchange Commission.

In additionto factors described in our Securities and Exchange Commission filingsand elsewhere, the following factors could cause our actual results todiffer materially from those expressed in any forward-lookingstatements made by us: (a) a significant reduction in the number offeature film, commercial or series television productions; (b)competitive pressures arising from changes in technology, changingcustomer requirements, price competition, evolving industry standardsor improvements in and the expansion of product offerings of ourcompetitors; (c) unfavorable foreign currency fluctuations; (d)lower-than-expected cash flows from operations; (e) difficulties ordelays in developing and introducing new products or failure of ourcustomers to accept new product offerings; (f) difficulties or delaysin implementing improvements in operating efficiencies; (g) theinability to secure capital contributions or loans from affiliates,refinance our indebtedness or sell our equity securities; or (h)significant increases in interest rates.

Forward-lookingstatements speak only as of the date they are made, and except for ourongoing obligations under the U.S. federal securities laws, weundertake no obligation to publicly update any forward-lookingstatements whether as a result of new information, future events orotherwise.

Item 3.    Quantitative and Qualitative DisclosuresAbout Market Risk

We have exposure to market risk both as aresult of changing interest rates and movements in foreign currencyexchange rates. We manage our exposure to these market risks throughour regular operating and financing activities. Item 7A of theCompany's Annual Report on Form 10-K for the year ended December31, 2004 presents quantitative and qualitative disclosures about marketrisk as of December 31, 2004. As of March 31, 2005, there have been nomaterial changes in our market risk since December 31, 2004.

Item 4.    Controls and Procedures

(a) DisclosureControls and Procedures. Our management, with the participation of ourChief Executive Officer and Chief Financial Officer, has evaluated theeffectiveness of our disclosure controls and procedures (as such termis defined in Rules 13a-15(e) and 15d-15(e) under the SecuritiesExchange Act of 1934, as amended (the "ExchangeAct"); as of the end of the fiscal period covered by thisQuarterly Report on Form 10-Q. Based upon such evaluation, our ChiefExecutive Officer and Chief Financial Officer have concluded that, asof the end of such period, such disclosure controls and procedures areeffective in accurately recording, processing, summarizing andreporting, on a timely basis, information required to be disclosed byus in the reports we file or submit under the Exchange Act, and areeffective in ensuring that information required to be disclosed by usin the reports that we file or submit under the Exchange Act isaccumulated and communicated to our management, including our ChiefExecutive Office and Chief Financial Officer, as appropriate to allowtimely decisions regarding required disclosure.

(b) Changes inInternal Control Over Financial Reporting. There have not been anychanges in our internal control over financial reporting (as such termis defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)during the fiscal period to which this Quarterly Report on Form 10-Qrelates that have materially affected, or are reasonably likely tomaterially affect, our internal control over financialreporting.

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PART II – OTHER INFORMATION

|                   |                                                                                                                                                                                                                                                                                                               |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Item 1.**  | **LegalProceedings** Panavision is not engaged in any legal proceedingother than ordinary routine litigation incidental to its business.Currently, Panavision is not involved in any legal proceeding that itexpects to have a material effect on its financial condition, resultsof operations, or business. |

|                  |                                                                     |
|------------------|---------------------------------------------------------------------|
| **Item2.**  | **Unregistered Sales of Equity Securitiesand Use of Proceeds** None |

|                  |                                                                                                                                   |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------|
| **Item3.**  | **Defaults Upon Senior Securities**There were no events of default upon senior securities during thequarter ended March 31, 2005. |

|                  |                                                                                                                                                              |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Item4.**  | **Submission of Matters to a Vote ofSecurity Holders** There were no matters submitted to a vote ofsecurity holders during the quarter ended March 31, 2005. |

|                   |                                                                   |
|-------------------|-------------------------------------------------------------------|
| **Item 5.**  | **OtherInformation** No additional information need be presented. |

|                   |              |
|-------------------|--------------|
| **Item 6.**  | **Exhibits** |

|               |  |                                                                                                                                                                                                                                                                                                                                                                                        |  |  |  |  |
|---------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                            |
| 3             |  | Certificateof Incorporation and By-Laws.                                                                                                                                                                                                                                                                                                                                               |
| 3.1           |  | RestatedCertificate of Incorporation of the Company (incorporated herein byreference to Exhibit 3.1 to Panavision's Quarterly Report on Form10-Q for the quarter ended March 31, 1999).**                                                                                                                                                                                              |
| 3.2           |  | Restated By-Laws of the Company(incorporated herein by reference to Exhibit 3.2 to Panavision'sQuarterly Report on Form 10-Q for the quarter ended March 31,1999).**                                                                                                                                                                                                                   |
| 4             |  | InstrumentsDefining the Rights of Security Holders, IncludingIndentures                                                                                                                                                                                                                                                                                                                |
| 4.1           |  | Indenture, dated as ofFebruary 11, 1998, between PX Escrow and The Bank of New York, asTrustee, relating to the Company's 9 5/8%Senior Subordinated Discount Notes Due 2006 (incorporated herein byreference to Exhibit 4.1 to Panavision's Registration Statementon Form S-1, Registration No. 333-59363 filed with the Securities andExchange Commission on July 17,1998).**         |
| 4.2           |  | First Supplemental Indenturedated June 4, 1998, among PX Escrow, Panavision and the Trustee,amending the Indenture identified at Exhibit 4.1 (incorporated hereinby reference to Exhibit 4.2 to Panavision's RegistrationStatement on Form S-1, Registration No. 333-59363 filed with theSecurities and Exchange Commission on July 17,1998).**                                        |
| 4.3           |  | Amended and Restated SeniorSubordinated Line of Credit Agreement dated January 16, 2004, betweenPanavision Inc. and MacAndrews & Forbes Holdings Inc. (incorporatedherein by reference to Exhibit 4.16 to Panavision's Annual Reporton Form 10-K for the year ended December 31,2003).**                                                                                           |
| 4.4           |  | Second Amended and RestatedSenior Subordinated Line of Credit Agreement dated January 16, 2004,amended and restated as of March 30, 2005, between Panavision Inc. andMacAndrews & Forbes Inc. (formerly MacAndrews & ForbesHoldings, Inc.) (incorporated herein by reference to Exhibit 4.4 toPanavision's Annual Report on Form 10-K for the year endedDecember 31, 2004) .** |
|               |

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|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |  |  |  |
|---------------|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 4.5           |  | Indenture, dated as ofJanuary 16, 2004, between Panavision Inc. and Wilmington Trust Company,as Trustee, relating Panavision's 12.50% Senior SecuredNotes due 2009 (incorporated herein by reference to Exhibit 4.17Panavision's Annual Report on Form 10-K for the year endedDecember 31, 2003).**                                                                                                                                                                                               |
| 4.6           |  | Form of12.50% Senior Secured Note due 2009 (incorporated herein byreference from to Exhibit 4.17 to Panavision's Annual Report onForm 10-K for the year ended December 31,2003).**                                                                                                                                                                                                                                                                                                                |
| 4.7           |  | Amended and Restated CreditAgreement, dated as of May 28, 1998, as amended and restated as ofJanuary 6, 2004, among Panavision Inc., the several lenders namedtherein, and JP Morgan Chase Bank, as Administrative Agent(incorporated herein by reference to Exhibit 4.19 to Panavision'sAnnual Report on Form 10-K for the year ended December 31,2003).**                                                                                                                                       |
| 4.8           |  | First Amendment and Waiver,dated as of August 11, 2004, with respect to the Amended and RestatedCredit Agreement, dated as of May 28, 1998, as amended and restated asof January 16, 2004, among Panavision Inc., the several lenders namedtherein, and JP Morgan Chase Bank, as Administrative Agent.(incorporated herein by reference from Exhibit 4.21 fromPanavision's Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2004).**                                              |
| 4.9           |  | FirstSupplemental Indenture and Waiver, dated as of August 11, 2004, withrespect to Indenture, dated as of January 16, 2004, between PanavisionInc. the subsidiary guarantors and Wilmington Trust Company, as Trusteeand Collateral Trustee, relating to Panavision's 12.50%Senior Secured Notes due 2009. (incorporated herein by reference fromExhibit 4.22 from Panavision's Quarterly Report on Form 10-Q forthe quarter ended September 30,2004).**                                         |
| 4.10          |  | Second Amendment and Consent,dated as of November 15, 2004, with respect to the Amended and RestatedCredit Agreement, dated as of May 28, 1998, as amended and restated asof January 16, 2004, among Panavision Inc., the several banks and otherfinancial institutions or entities from time to time parties theretoand JPMorgan Chase Bank, as administrative agent. (incorporated hereinby reference from Exhibit 10.2 to Panavision's Current Report onForm 8-K filed on November 17,2004).** |
| 4.11          |  | Third Amendment, dated as ofDecember 29, 2004, with respect to the Amended and Restated CreditAgreement, dated as of May 28, 1998, as amended and restated as ofJanuary 16, 2004, among Panavision Inc., the several banks and otherfinancial institutions or entities from time to time parties theretoand JPMorgan Chase Bank, as administrative agent. (incorporated hereinby reference from Exhibit 10.1 to Panavision's Current Report onForm 8-K filed on January 4,2005).**                |
| 4.12          |  | Fourth Supplemental Indenture,dated as of December 29, 2004, with respect to the Indenture, dated asof January 16, 2004, among Panavision Inc. the subsidiary guarantorsand Wilmington Trust Company, as Trustee and Collateral Trustee,related to Panavision's 12.50% Senior Secured Notes due2009. (incorporated herein by reference from Exhibit 10.2 toPanavision's Current Report on Form 8-K filed on January 4,2005).**                                                                    |
| 4.13          |  | Fourth Amendment, dated as ofMarch 30, 2005, with respect to the Amended and Restated CreditAgreement, dated as of May 28, 1998, as amended and restated as ofJanuary 16, 2004, among Panavision Inc., the several banks and otherfinancial institutions or entities from time to time parties theretoand JPMorgan Chase Bank, as administrative agent (incorporated hereinby reference to Exhibit 4.13 to Panavision's Annual Report onForm 10-K for the year ended December 31,2004).**         |
|               |

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PANAVISIONINC.

|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |  |  |  |
|---------------|--|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 4.14          |  | Fifth SupplementalIndenture, dated as of March 30, 2005, with respect to the Indenture,dated as of January 16, 2004, among Panavision Inc., the subsidiaryguarantors and Wilmington Trust Company, as Trustee and CollateralTrustee, related to Panavision's 12.50% Senior SecuredNotes due 2009 (incorporated herein by reference to Exhibit 4.14 toPanavision's Annual Report on Form 10-K for the year endedDecember 31, 2004).** |
| 10            |  | MaterialContracts                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.1          |  | Separation Agreement, datedas of January 10, 2005, between Panavision and Eric W. Golden, formerlythe Company's Executive Vice President, General Counsel andSecretary (incorporated herein by reference to Exhibit 10.10 toPanavision's Annual Report on Form 10-K for the year endedDecember 31, 2004).**                                                                                                                          |
| 10.2          |  | 2005 PerformanceObjectives and 2004 Bonus Award (incorporated herein by reference toItem 1.01 of Panavision's Current Report on Form 8-K filed onApril 15, 2005).**                                                                                                                                                                                                                                                                  |
| 31            |  | Section 302Certifications                                                                                                                                                                                                                                                                                                                                                                                                            |
| 31.1          |  | Certification of RobertL. Beitcher, Chief Executive Officer, dated May 13, 2005.*                                                                                                                                                                                                                                                                                                                                                    |
| 31.2          |  | Certification of Bobby G. Jenkins, ChiefFinancial Officer, dated May 13, 2005.*                                                                                                                                                                                                                                                                                                                                                      |
| 32            |  | Section 906Certifications                                                                                                                                                                                                                                                                                                                                                                                                            |
| 32.1          |  | Certifications of RobertL. Beitcher, Chief Executive Officer, and Bobby G. Jenkins, ChiefFinancial Officer, dated May 13, 2005, pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002 (furnished herewith).                                                                                                                                                                         |
| 99            |  | Other Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 99.1          |  | PX Holding Corporation9 5/8% Notes Commitment Letter, dated as ofMarch 30, 2005 (incorporated herein by reference to Exhibit 99.1 toPanavision's Annual Report on Form 10-K for the year endedDecember 31, 2004).**                                                                                                                                                                                                                  |
|               |

* Filed herewith.

** Previously filed.

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PANAVISIONINC.

SIGNATURES

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

|  | PANAVISION INC. |
|--|-----------------|

|                                                                                                                                                                                                                                                                                          |  |        |  |                                                                                                                                                                                                                                                      |  |  |  |  |  |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|
| Date:May 13,2005                                             |  | By:    |  |       /s/  ROBERTL.BEITCHER                                                                    |
|                                                                                                                                                                                                                                                                                     |  |   |  |       RobertL. Beitcher       Presidentand      Chief Executive Officer                                                                                    |
|                                                                                                                                                                                                                                                                                     |  | By:    |  |       /s/  BOBBYG. JENKINS                                       |
|                                                                                                                                                                                                                                                                                     |  |   |  |       Bobby G. Jenkins      Executive Vice President,      Chief Financial Officer and Principal      AccountingOfficer |
|                                                                                                                                                                                                                                                                                          |

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