|  |
|--|
|  |
|  |
|  |
|  |

UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

|  |
|--|
|  |  |  |  |
|  |

FORM 10-Q

(Mark One)

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

**For the quarterly period ended March 31,2004**

**OR**

|        |                                                                                            |
|--------|--------------------------------------------------------------------------------------------|
|   | **TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934** |

For the transition period from                                     to                                    

Commission file number:001-12391

|  |
|--|
|  |  |  |  |
|  |

PANAVISIONINC.

(Exact name of Registrant asspecified in itscharter)

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

(818)316-1000

|  |
|--|
|  |  |  |  |
|  |

Registrant'stelephone number including areacode

|  |
|--|
|  |  |  |  |
|  |

**Indicate by check markwhether the registrant (1) has filed all reports required to be filedby Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrantwas required to file such reports), and (2) has been subject to suchfiling requirements 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:

**Indicate thenumber of shares outstanding of each of the Issuer's classes ofcommon stock, as of the latest practicable date.**

As of May14, 2004, there were 8,769,919 shares of Panavision Inc. Common Stock,par value $0.01 per share,outstanding.

|  |
|--|
|  |
|  |
|  |
|  |

----

PANAVISIONINC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q FORTHE QUARTER ENDED MARCH 31, 2004

|             |  |                                                                                      |    |        |    |        |  |  |  |  |
|-------------|--|--------------------------------------------------------------------------------------|----|--------|----|--------|--|--|--|--|
| **PartI.**  |  | **FinancialInformation**                                                             |    |
| Item 1.     |  | FinancialStatements                                                                  |    |
|        |  | Condensed ConsolidatedStatements of Operations                                       |    |   | 1  |   |
|        |  | Condensed Consolidated BalanceSheets                                                 |    |   | 2  |   |
|        |  | Condensed ConsolidatedStatements of Cash Flows                                       |    |   | 4  |   |
|        |  | Notesto Condensed Consolidated Financial Statements                                  |    |   | 6  |   |
| Item2.      |  | Management's Discussion and Analysis of FinancialCondition and Results of Operations |    |   | 13 |   |
| Item3.      |  | Quantitative and Qualitative Disclosures About MarketRisk                            |    |   | 19 |   |
| Item 4.     |  | Controls andProcedures                                                               |    |   | 19 |   |
|        |  |
| **PartII.** |  | **OtherInformation**                                                                 |    |
| Item 1.     |  | LegalProceedings                                                                     |    |   | 20 |   |
| Item 2.     |  | Changes inSecurities and Use of Proceeds                                             |    |   | 20 |   |
| Item3.      |  | Defaults Upon Senior Securities                                                      |    |   | 20 |   |
| Item 4.     |  | Submission of Matters to a Vote of SecurityHolders                                   |    |   | 20 |   |
| Item 5.     |  | OtherInformation                                                                     |    |   | 20 |   |
| Item 6.     |  | Exhibitsand Reports on Form 8-K                                                      |    |   | 20 |   |
|        |  |
| SIGNATURES  |  |                                                                                 | 23 |   |
|             |

----

PART I – FINANCIALINFORMATION

Item 1.    Financial Statements

Thefinancial information herein and management's discussion thereofinclude consolidated data for Panavision 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)

|                                                    |  |                            |         |         |  |        |         |         |  |  |
|----------------------------------------------------|--|----------------------------|---------|---------|--|--------|---------|---------|--|--|
|                                               |  | FirstQuarter EndedMarch31, |
|                                               |  | 2004                       |         | 2003    |
| Camerarental                                       |  | $                          | 30,844  |    |  | $      | 29,429  |    |
| Lightingrental                                     |  |                       | 8,522   |    |  |   | 6,794   |    |
| Sales andother                                     |  |                       | 15,556  |    |  |   | 10,076  |    |
| Totalrental revenue andsales                       |  |                       | 54,922  |    |  |   | 46,299  |    |
| Cost of camerarental                               |  |                       | 16,399  |    |  |   | 14,868  |    |
| Cost oflighting rental                             |  |                       | 8,144   |    |  |   | 6,830   |    |
| Cost ofsales andother                              |  |                       | 8,576   |    |  |   | 6,220   |    |
| Grossmargin                                        |  |                       | 21,803  |    |  |   | 18,381  |    |
| Selling,general and administrativeexpenses         |  |                       | 18,782  |    |  |   | 18,706  |    |
| Research anddevelopmentexpenses                    |  |                       | 1,460   |    |  |   | 1,228   |    |
| Operatingincome (loss)                             |  |                       | 1,561   |    |  |   | (1,553  | )  |
| Interestincome                                     |  |                       | 18      |    |  |   | 45      |    |
| Interestexpense                                    |  |                       | (7,893  | )  |  |   | (8,182  | )  |
| Foreignexchange gain(loss)                         |  |                       | 99      |    |  |   | (915    | )  |
| Refinancingexpense                                 |  |                       | (6,470  | )  |  |   | — |    |
| Other,net                                          |  |                       | 188     |    |  |   | 258     |    |
| Lossbefore incometaxes                             |  |                       | (12,497 | )  |  |   | (10,347 | )  |
| Income tax(provision)benefit                       |  |                       | (1,470  | )  |  |   | 2,993   |    |
| Netloss                                            |  | $                          | (13,967 | )  |  | $      | (7,354  | )  |
| Netloss attributable to commonstockholders         |  | $                          | (19,217 | )  |  | $      | (8,845  | )  |
| Netloss per share – basic anddiluted         |  | $                          | (2.19   | )  |  | $      | (1.01   | )  |
| Sharesused in computation – basic anddiluted |  |                       | 8,770   |    |  |   | 8,770   |    |
|                                                    |

Seeaccompanying notes.

1

----

PANAVISION INC.

CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                           |  |               |         |                  |  |        |         |        |  |  |
|---------------------------------------------------------------------------|--|---------------|---------|------------------|--|--------|---------|--------|--|--|
|                                                                      |  | March31, 2004 |         | December 31,2003 |
| ASSETS                                                                    |  | (Unaudited)   |         | (Note1)          |
| Currentassets:                                                            |  |          |    |             |  |   |    |   |
| Cash and cashequivalents                                                  |  | $             | 8,912   |             |  | $      | 9,079   |   |
| Accountsreceivable (net of allowance of $1,485 in 2004 and $2,586 in2003) |  |          | 30,938  |             |  |   | 29,255  |   |
| Inventories                                                               |  |          | 13,254  |             |  |   | 11,931  |   |
| Prepaidexpenses                                                           |  |          | 4,743   |             |  |   | 4,330   |   |
| Due fromrelated parties                                                   |  |          | 139     |             |  |   | 628     |   |
| Othercurrentassets                                                        |  |          | 1,579   |             |  |   | 1,248   |   |
| Totalcurrentassets                                                        |  |          | 59,565  |             |  |   | 56,471  |   |
| Property,plant and equipment,net                                          |  |          | 216,716 |             |  |   | 220,704 |   |
| Goodwill,net                                                              |  |          | 264,629 |             |  |   | 264,548 |   |
| Patents andtrademarks, net                                                |  |          | 67,107  |             |  |   | 67,258  |   |
| Otherassets                                                               |  |          | 10,134  |             |  |   | 12,941  |   |
| Totalassets                                                               |  | $             | 618,151 |             |  | $      | 621,922 |   |
|                                                                           |

Seeaccompanying notes.

2

----

PANAVISION INC.

CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                                                                                                                                                                                                    |  |               |          |                  |  |        |          |         |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|---------------|----------|------------------|--|--------|----------|---------|--|--|
|                                                                                                                                                                                                                                               |  | March31, 2004 |          | December 31,2003 |
| LIABILITIESAND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                |  | (Unaudited)   |          | (Note1)          |
| Currentliabilities:                                                                                                                                                                                                                                |  |          |     |             |  |   |     |    |
| Accountspayable                                                                                                                                                                                                                                    |  | $             | 9,379    |             |  | $      | 6,685    |    |
| Accruedliabilities                                                                                                                                                                                                                                 |  |          | 28,636   |             |  |   | 28,955   |    |
| Dueto relatedparties                                                                                                                                                                                                                               |  |          | 2,216    |             |  |   | 2,643    |    |
| Currentmaturities of long-termdebt                                                                                                                                                                                                                 |  |          | 6,672    |             |  |   | 5,885    |    |
| Totalcurrentliabilities                                                                                                                                                                                                                            |  |          | 46,903   |             |  |   | 44,168   |    |
| Long-termdebt                                                                                                                                                                                                                                      |  |          | 295,598  |             |  |   | 312,388  |    |
| Note payable toaffiliate                                                                                                                                                                                                                           |  |          | 5,389    |             |  |   | 21,401   |    |
| Deferred taxliabilities, net                                                                                                                                                                                                                       |  |          | 28,960   |             |  |   | 30,060   |    |
| Otherliabilities                                                                                                                                                                                                                                   |  |          | 7,825    |             |  |   | 7,909    |    |
| Due torelatedparties                                                                                                                                                                                                                               |  |          | 1,358    |             |  |   | 1,326    |    |
| CommitmentsandContingencies                                                                                                                                                                                                                        |  |          |     |             |  |   |     |    |
| Stockholders'equity:                                                                                                                                                                                                                               |  |          |     |             |  |   |     |    |
| Series ANon-Cumulative Perpetual Participating Preferred Stock, $0.01 parvalue; 1,500,000 shares authorized; 1,381,690 shares issued andoutstanding at December 31, 2003 (liquidation preference of $1 pershare plus declared and unpaiddividends) |  |          | —  |             |  |   | 14       |    |
| Series CCumulative Pay-in-Kind Preferred Stock, $0.01 par value; 200,000 sharesauthorized; 159,644 shares issued and outstanding at December 31, 2003(liquidation preference of $1,000 per share plus accrued and unpaiddividends)                 |  |          | —  |             |  |   | 2        |    |
| Series DCumulative Pay-in-Kind Preferred Stock, $0.01 par value; 300,000 sharesauthorized; 215,274 shares issued and outstanding at March 31, 2004(liquidation preference of $1,000 per share plus accrued and unpaiddividends)                    |  |          | 2        |             |  |   | —  |    |
| Series ENon-Cumulative Perpetual Participating Preferred Stock, $0.01 parvalue; 1,500,000 shares authorized; 1,381,690 shares issued andoutstanding at March 31, 2004 (liquidation preference of $1 per shareplus declared and unpaiddividends)    |  |          | 14       |             |  |   | —  |    |
| CommonStock, $0.01 par value; 50,000,000 shares authorized; 8,769,919 sharesissued and outstanding at March 31, 2004 and December 31,2003                                                                                                          |  |          | 88       |             |  |   | 88       |    |
| Additional paid-incapital                                                                                                                                                                                                                          |  |          | 370,907  |             |  |   | 329,127  |    |
| Revaluationcapital                                                                                                                                                                                                                                 |  |          | 333,199  |             |  |   | 333,199  |    |
| Accumulateddeficit                                                                                                                                                                                                                                 |  |          | (475,762 | )           |  |   | (461,795 | )  |
| Accumulatedother comprehensiveincome                                                                                                                                                                                                               |  |          | 3,670    |             |  |   | 4,035    |    |
| Totalstockholders'equity                                                                                                                                                                                                                           |  |          | 232,118  |             |  |   | 204,670  |    |
| Totalliabilities and stockholders'equity                                                                                                                                                                                                           |  | $             | 618,151  |             |  | $      | 621,922  |    |
|                                                                                                                                                                                                                                                    |

Seeaccompanying notes.

3

----

PANAVISION INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS(Unaudited)(Inthousands)

|                                                                          |  |                           |          |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------|--|---------------------------|----------|---------|--|--------|---------|---------|--|--|
|                                                                     |  | ThreeMonths EndedMarch31, |
|                                                                     |  | 2004                      |          | 2003    |
| **Operatingactivities**                                                  |  |                      |     |    |  |   |    |    |
| Netloss                                                                  |  | $                         | (13,967  | )  |  | $      | (7,354  | )  |
| Adjustmentsto derive net cash provided by (used in) operatingactivities: |  |                      |     |    |  |   |    |    |
| Depreciationandamortization                                              |  |                      | 11,449   |    |  |   | 10,911  |    |
| Write-offof deferred financingcosts                                      |  |                      | 3,436    |    |  |   | — |    |
| (Gain) loss onsale of property andequipment                              |  |                      | (99      | )  |  |   | 12      |    |
| Amortization ofdeferred financingcosts                                   |  |                      | 438      |    |  |   | 568     |    |
| Dividends receivedfrom equityinvestments                                 |  |                      | 500      |    |  |   | — |    |
| Deferredincome taxbenefit                                                |  |                      | (1,100   | )  |  |   | (3,452  | )  |
| Changes inoperating assets andliabilities:                               |  |                      |     |    |  |   |    |    |
| Accountsreceivable                                                       |  |                      | (1,683   | )  |  |   | 152     |    |
| Inventories                                                              |  |                      | (1,323   | )  |  |   | (168    | )  |
| Prepaidexpenses and other currentassets                                  |  |                      | (744     | )  |  |   | (1,325  | )  |
| Due fromrelated parties                                                  |  |                      | 489      |    |  |   | (214    | )  |
| Accountspayable                                                          |  |                      | 2,694    |    |  |   | 1,965   |    |
| Accruedliabilities                                                       |  |                      | (319     | )  |  |   | (1,781  | )  |
| Due torelatedparties                                                     |  |                      | (38      | )  |  |   | 790     |    |
| Other,net                                                                |  |                      | (1,550   | )  |  |   | 452     |    |
| Netcash provided by (used in) operatingactivities                        |  |                      | (1,817   | )  |  |   | 556     |    |
| **Investingactivities**                                                  |  |                      |     |    |  |   |    |    |
| Capitalexpenditures                                                      |  |                      | (5,876   | )  |  |   | (7,182  | )  |
| Proceedsfrom dispositions of fixedassets                                 |  |                      | 102      |    |  |   | 10      |    |
| Netcash used in investingactivities                                      |  |                      | (5,774   | )  |  |   | (7,172  | )  |
| **Financingactivities**                                                  |  |                      |     |    |  |   |    |    |
| Borrowings underAmended CreditAgreement                                  |  |                      | 135,600  |    |  |   | — |    |
| Proceedsfrom issuance of SeniorNotes                                     |  |                      | 100,000  |    |  |   | — |    |
| Repayments oflong-termdebt                                               |  |                      | (252,464 | )  |  |   | (3,779  | )  |
| Deferredfinancingcosts                                                   |  |                      | (452     | )  |  |   | (3,155  | )  |
| Proceeds fromissuance of Series B PreferredStock                         |  |                      | —  |    |  |   | 4,372   |    |
| Capitalcontribution, net of transactioncosts                             |  |                      | 22,710   |    |  |   | 9,800   |    |
| Borrowings undernotes payable toaffiliate                                |  |                      | 2,000    |    |  |   | — |    |
| Netcash provided by financingactivities                                  |  |                      | 7,394    |    |  |   | 7,238   |    |
| Effect ofexchange rate changes oncash                                    |  |                      | 30       |    |  |   | 71      |    |
| Netincrease (decrease) in cash and cashequivalents                       |  |                      | (167     | )  |  |   | 693     |    |
| Cash and cashequivalents at beginning ofperiod                           |  |                      | 9,079    |    |  |   | 12,647  |    |
| Cashand cash equivalents at end ofperiod                                 |  | $                         | 8,912    |    |  | $      | 13,340  |    |
|                                                                     |  |                      |     |    |  |   |    |    |
|                                                                     |  |                      |     |    |  |   |    |    |
|                                                                          |

Seeaccompanying notes.

4

----

PANAVISION INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS(Unaudited)(Inthousands)

|                                       |  |                           |        |        |  |        |        |        |  |  |
|---------------------------------------|--|---------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                  |  | ThreeMonths EndedMarch31, |
|                                  |  | 2004                      |        | 2003   |
| **Supplementalcash flow information** |  |                      |   |   |  |   |   |   |
| Interestpaid during theperiod         |  | $                         | 6,103  |   |  | $      | 11,613 |   |
| Incometaxes paid during theperiod     |  | $                         | 656    |   |  | $      | 582    |   |
|                                       |

Supplementalnon-cash financing activities

Asdescribed in Note 4 of the Notes to Condensed Consolidated FinancialStatements, in January 2004, the Company issued to PX Holding 1,381,690shares of new Series E Non-Cumulative Perpetual Participating PreferredStock in exchange for 1,381,690 shares of Series A Non-CumulativePerpetual Participating Preferred Stock, which constituted all of theoutstanding Series A Preferred Stock.

As described in Note 4 ofthe Notes to Condensed Consolidated Financial Statements, in January2004, the Company issued to PX Holding 215,274 shares of new Series DCumulative Pay-in-Kind Preferred Stock in exchange for, among otherconsideration, 159,644 shares of Series C Cumulative Pay-in-KindPreferred Stock held by PX Holding Corporation, which constituted allof the outstanding Series C Preferred Stock. The other considerationincluded the contribution or retirement of various related party notesand Mafco Holdings' one-third interest in the common stock ofPANY Rental, Inc. Total book value, which approximates fair value, ofthe non-cash consideration was approximately $19.0 million.

OnMarch 27, 2003, Mafco Holdings contributed $90.9 million principalamount of the 95/8% SeniorSubordinated Discount Notes Due 2006 (the"95/8%Notes") and $10.0 million in cash to the Company inexchange for 102,220 shares of Series C Cumulative Pay-in-KindPreferred Stock, which it contributed to the capital of PX Holding, andPX Holding contributed to the Company 53,571 shares of Series BPreferred Stock in exchange for 57,424 shares of Series C PreferredStock. As a result of this transaction, all of the outstanding Series BPreferred Stock was transferred to the Company. In connection with thecontribution of 95/8% Notes bythe majority shareholder, deferred tax assets associated with these95/8% Notes of $18.0 million werecharged against additional paid-in capital.

For the quarterended March 31, 2003, the Company recorded an accreted dividend of $1.3million on the Series B Preferred Stock.

See accompanyingnotes.

5

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                     |
|----------|---------------------|
| 1.  | Basisof Preparation |

The Company is an indirect majority-ownedsubsidiary of Mafco Holdings Inc. ("MafcoHoldings" or "Parent"), acorporation whose sole stockholder is Ronald O. Perelman. TheCompany's principal business operations are conducted through itssubsidiaries.

As also described in Note 2 of the Company's2003 Annual Report on Form 10-K/A, on April 19, 2001, M&F WorldwideCorp. ("M&F Worldwide") purchased from PXHolding Corporation ("PX Holding"), a whollyowned subsidiary of Mafco Holdings, all 7,320,225 shares (the"Purchased Shares") of the Company'sCommon Stock held by PX Holding (the "M&FPurchase"). The Purchased Shares constituted approximately83.5% of the Company's then outstanding Common Stock. As aresult of the purchase, Mafco Holdings increased its indirect interestin M&F Worldwide to a majority position.

During 2001,certain shareholders of M&F Worldwide brought lawsuits againstM&F Worldwide and its directors challenging the M&F Purchase asan alleged breach of fiduciary duty and sought, among other things,rescission of the M&F Purchase transaction. One of the shareholdersdismissed his lawsuit pursuant to a settlement. On December 3, 2002,the remaining parties to the litigation consummated a settlement of thelitigation (the "M&F Settlement"),whereby Mafco Holdings acquired, through PX Holding, (1) the shares ofthe Company's Common Stock that M&F Worldwide had purchasedin April 2001, (2) the shares of the Company's Series ANon-Cumulative Perpetual Participating Preferred Stock, par value$0.01, (the "Series A Preferred Stock") thatM&F Worldwide acquired in December 2001, (3) the95/8% Notes that a subsidiary ofM&F Worldwide acquired in November 2001, and (4) the Las PalmasNote in the amount of $6.7 million that the Company issued to M&FWorldwide on its acquisition of the shares of Las Palmas (the"Las Palmas Note") (see Note 14 of theCompany's 2003 Annual Report on Form 10-K/A). In addition, allagreements which M&F Worldwide entered into in connection with theM&F Purchase and the December 2001 issuance of the Series APreferred Stock were terminated.

Thus, after the consummation ofthe M&F Settlement, the Company ceased being a subsidiary ofM&F Worldwide. Mafco Holdings, after giving effect to the M&FSettlement, indirectly controls 85.7% of the voting shares ofthe Company. The M&F Settlement did not have a significant impacton the recorded values of the Company's assets or liabilitiessince the transaction was between parties under common control.

The accompanying condensed consolidated financial statements havebeen prepared in accordance with accounting principles generallyaccepted in the United States for interim financial information andwith the instructions for Form 10-Q and Rule 10-01 of Regulation S-X.Accordingly, they do not include all of the information and footnotesrequired by accounting principles generally accepted in the UnitedStates for complete financial statements. In the opinion of management,all adjustments (consisting of normal recurring adjustments) considerednecessary for a fair presentation have been included. The results ofoperations for interim periods are not necessarily indicative of theresults that may be expected for the fiscal year. The condensedconsolidated financial statements should be read in conjunction withthe consolidated financial statements and accompanying notes includedin the Company's Annual Report on Form 10-K/A for the year endedDecember 31, 2003. All terms used but not defined elsewhere herein havethe meaning ascribed to them in the Company's 2003 Annual Reporton Form 10-K/A.

The balance sheet at December 31, 2003 has beenderived from the audited financial statements at that date but does notinclude all the information and footnotes required by accountingprinciples generally accepted in the United States for completefinancial statements.

The condensed consolidated financialstatements include the accounts of Panavision and its majority-ownedsubsidiaries. All significant intercompany amounts and transactionshave been eliminated.

Certain amounts in previously issuedfinancial statements have been reclassified to conform to the 2004presentation.

6

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |             |
|----------|-------------|
| 2.  | Inventories |

Inventories consist of the following (inthousands):

|                          |  |               |        |                  |  |        |        |        |  |  |
|--------------------------|--|---------------|--------|------------------|--|--------|--------|--------|--|--|
|                     |  | March31, 2004 |        | December 31,2003 |
|                     |  |          |   |             |  |   |   |   |
|                     |  |          |   |             |  |   |   |   |
| Finishedgoods            |  | $             | 2,794  |             |  | $      | 2,601  |   |
| Work-in-process          |  |          | 336    |             |  |   | 302    |   |
| Componentparts           |  |          | 3,120  |             |  |   | 2,048  |   |
| Spare parts andsupplies  |  |          | 1,828  |             |  |   | 1,539  |   |
| Goods purchasedforresale |  |          | 5,176  |             |  |   | 5,441  |   |
|                     |  | $             | 13,254 |             |  | $      | 11,931 |   |
|                          |

|          |                                 |
|----------|---------------------------------|
| 3.  | Useof Estimates and Assumptions |

The preparation of financialstatements in conformity with accounting principles generally acceptedin the United States requires management to make estimates andassumptions that affect the amounts reported in the financialstatements and accompanying notes, including the collectibility ofreceivables and the realizability of assets such as fixed assets anddeferred taxes. Actual results could differ from such estimates.

|          |                |
|----------|----------------|
| 4.  | Long-Term Debt |

Long-term debt, including current maturities, consists of thefollowing (inthousands):

|                                                 |  |               |         |                  |  |        |         |        |  |  |
|-------------------------------------------------|--|---------------|---------|------------------|--|--------|---------|--------|--|--|
|                                            |  | March31, 2004 |         | December 31,2003 |
|                                            |  |          |    |             |  |   |    |   |
| Amendedand Restated CreditAgreement             |  | $             | 134,350 |             |  | $      | — |   |
| 12.50%Senior Notes Due2009                      |  |          | 100,121 |             |  |   | — |   |
| PriorCredit Agreement:                          |  |          |    |             |  |   |    |   |
| RevolvingFacility                               |  |          | — |             |  |   | 99,200  |   |
| TermFacility                                    |  |          | — |             |  |   | 151,792 |   |
| 95/8%Senior Subordinated Discount Notes Due2006 |  |          | 65,286  |             |  |   | 65,353  |   |
| Notes payable toaffiliate                       |  |          | 5,389   |             |  |   | 21,401  |   |
| Other(including capitalized leaseobligations)   |  |          | 2,513   |             |  |   | 1,928   |   |
|                                            |  |          | 307,659 |             |  |   | 339,674 |   |
| Less:Currentmaturities                          |  |          | 6,672   |             |  |   | 5,885   |   |
| TotalLong-TermDebt                              |  | $             | 300,987 |             |  | $      | 333,789 |   |
|                                                 |

Asof March 31, 2004, the Company had lines of credit extended by arelated party totaling approximately $20.0 million, under which $5.4million was drawn. The Company does not have any off-balance sheetfinancing arrangements.

The95/8% Senior SubordinatedDiscount Notes Due 2006("95/8%Notes") were issued at a discount representing a yield tomaturity of 95/8%. There were noperiodic or interest payments through February 1, 2002. Thereafter,they bear interest at a rate of95/8% per annum, payablesemi-annually on February 1 and August 1 of each year, commencingAugust 1, 2002.

7

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                             |
|----------|-----------------------------|
| 4.  | Long-Term Debt  (Continued) |

On August 13, 2003, MacAndrews & Forbesagreed to amend an existing line of credit provided to the Company toincrease the amount available for borrowing from $4.0 million to $10.0million and extend the maturity date to August 31, 2006 (as amended,the "MacAndrews Line"). In connection with anamendment to the Company's Prior Credit Agreement (as definedbelow), on November 12, 2003, MacAndrews & Forbes agreed to providea second revolving line of credit (the "Second MacAndrewsLine") in the amount of $10.0 million at a rate equal to50 basis points above the rate provided for in the revolving facilitypursuant to the Prior Credit Agreement and a maturity of April 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 Series DPreferred Stock (as defined below) and (ii) MacAndrews & Forbesincreased the amount of the Second MacAndrews Line to $20.0 million andextended the maturity to April 16, 2009. As of March 31, 2004, theCompany had availability under the Second MacAndrews line ofapproximately $14.6 million.

On June 4, 1998, the Companyentered into a Credit Agreement with a syndicate of lenders (assubsequently amended on September 30, 1998, June 30, 1999, March 15,2002, June 14, 2002, September 30, 2002, March 25, 2003 and November12, 2003, the "Prior Credit Agreement"). TheCompany's obligations under the Prior Credit Agreement weresecured by substantially all of the Company's assets. The PriorCredit Agreement was comprised of two facilities, the Term Facility andthe Revolving Facility. As of December 31, 2003, amounts outstandingunder the Prior Credit Agreement were $151.8 million and $99.2 millionfor the Term Facility and Revolving Facility, respectively. Asdescribed below, the Prior Credit Agreement was replaced with theAmended and Restated Credit Agreement pursuant to the January 2004Refinancing.

On January 16, 2004, the Company consummated aseries of transactions to refinance its indebtedness under the PriorCredit Agreement (the "January 2004Refinancing"). As part of the January 2004 Refinancing,the Company sold, in a private placement, $104.2 million of seniorsecured notes (the "Senior Notes") bearinginterest at a rate of 12.50%, payable quarterly, with a maturitydate of January 16, 2009. The Senior Notes were sold at an originalissue discount of approximately 4% for an aggregate purchaseprice of $100.0 million. The Senior Notes are secured by asecond-priority lien on substantially all of the Company'sassets. The indenture pursuant to which the Senior Notes were issued(the "2004 Indenture") requires that, amongother provisions, the Company achieve certain EBITDA levels and abideby certain other restrictive covenants, including limitations onindebtedness, liens, disposition of assets, and certain restrictedpayments including dividends to stockholders. Upon certain events ofdefault under the 2004 Indenture, the Senior Notes will bear interestat 2.5% above the rate otherwise applicable.

Also as partof the January 2004 Refinancing, the Company issued to PX Holding215,274 shares of new Series D Cumulative Pay-in-Kind Preferred Stock,par value $0.01 per share (the "Series D PreferredStock") in exchange for (a) 159,644 shares of Series CCumulative Pay-in-kind Preferred Stock, par value $0.01 per share (the"Series C Preferred Stock"), of the Company,held by PX Holding (together with approximately $13.2 million ofaccumulated dividends thereon); (b) $23.0 million in cash; (c) theretirement of of all principal and interest (an aggregate of$10,180,930) owed as of January 16, 2004 under the MacAndrews Line; (d)33.3 shares of common stock of PANY Rental, Inc. ("PANYRental"), having a fair market value of $0.7 million (suchthat, as of January 16, 2004, the Company 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 Mafco Holdings under a certain promissory note in the principalamount of $6.7 million, dated July 1, 2002, issued by the Company toM&F Worldwide and subsequently acquired by Mafco Holdings. TheCompany also issued to PX Holding 1,381,690 shares of new Series ENon-Cumulative Perpetual Participating Preferred Stock, par value $0.01per share, (the "Series E 

8

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                             |
|----------|-----------------------------|
| 4.  | Long-Term Debt  (Continued) |

Preferred Stock") in exchange for1,381,690 shares of Series A Non-Cumulative Perpetual ParticipatingPreferred Stock, par value $0.01 per share (the "Series APreferred Stock"). 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. In addition,MacAndrews & Forbes increased the amount of the Second MacAndrewsLine to $20.0 million and extended the maturity to April 16, 2009.

The Company used proceeds from the sale of the Senior Notes and theissuance of Series D Preferred Stock to reduce the indebtedness underthe Prior Credit Agreement by $115.4 million, and replaced the PriorCredit Agreement with 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 onSeptember 5, 2005 if any of the95/8% Notes remain outstanding onthat date. The term facility bears interest at either the ABR orEurodollar Rate (as defined in the Amended Credit Agreement) plus amargin of 5.25% in the case of ABR loans or 6.25% in thecase of Eurodollar Loans. The term facility under the Amended CreditAgreement is secured on substantially the same basis as indebtednessunder the Prior Credit Agreement. In connection with the Amended CreditAgreement, the Company paid fees to lenders and professional advisorsof approximately $3.5 million, including an original issue discount feeof approximately $2.0 million. Approximately $3.1 million of the feespaid were expensed in 2004.

Under the Amended Credit Agreement,the Company is required to repay $5.0 million in principal in 2004,whereas under the Prior Credit Agreement the Company would have beenrequired to make principal payments of approximately $221.1 million in2004. In addition, the Amended Credit Agreement revised certainfinancial tests and other restrictive covenants set forth in the PriorCredit Agreement, including required EBITDA (as defined), limitationson indebtedness, and other provisions. As defined in the Amended CreditAgreement and 2004 Indenture, EBITDA includes adjustments for severanceexpense, refinancing expense, foreign exchange gain or loss, and othernon-cash charges. As of March 31, 2004, $134.4 million was outstandingunder the Amended Credit Agreement.

As a result of therefinancing, in accordance with Statement of Financial AccountingStandards No. 6, "Classification of Short-Term ObligationsExpected to be Refinanced" ("SFAS6"), the Company reclassified $246.0 million of therefinanced debt to long-term debt as of December 31, 2003.

|          |                             |
|----------|-----------------------------|
| 5.  | Preferred StockTransactions |

In connection with a March 2003 amendment to thePrior Credit Agreement, all the Redeemable Series B CumulativePay-in-Kind Preferred Stock (the "Series B PreferredStock") was contributed back to the Company and 102,220shares of Series C Preferred Stock were issued. The Series C PreferredStock was non-voting; had a liquidation preference of $1,000 per shareplus accrued and unpaid dividends; and entitled the holder tocumulative dividends at a rate of 10% per annum regardless ofwhether declared or earned. In addition, the Series C Preferred Stockwas subject to redemption in certain circumstances upon a change ofcontrol.

On January 16, 2004, as part of the January 2004Refinancing, the Company issued to PX Holding 215,274 shares of newSeries D Preferred Stock. The Series D Preferred Stock is non-voting,has a liquidation preference of $1,000 per share plus accrued andunpaid dividends, and entitles the holder to cumulative dividends at arate of 10% per annum regardless of whether declared or earned.Additionally, the Series D Preferred Stock is subject to redemption incertain circumstances upon a change of control. The Company also issuedto PX Holding 1,381,690 shares of Series E Preferred Stock in exchangefor 1,381,690 shares of Series A Preferred Stock. The Series EPreferred Stock is entitled to one vote per share, voting together withthe Common Stock as a single class, has a liquidation preference of$1.00 per 

9

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                                          |
|----------|------------------------------------------|
| 5.  | Preferred StockTransactions  (Continued) |

share plus accrued and unpaid dividends, andprovides for non-cumulative cash dividends at an annual rate of $0.05per share if declared by the Company.

The Series A PreferredStock was voting and was entitled to non-cumulative dividends at a rateof $0.05 per share per annum payable, if declared, quarterly on eachMarch 31, June 30, September 30 and December 31. In addition, theSeries 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.

As aresult of the January 2004 Refinancing transactions, all of theoutstanding shares of Series A and Series C Preferred Stock weretransferred to the Company.

|          |                              |
|----------|------------------------------|
| 6.  | NewAccounting Pronouncements |

In January 2003, the FinancialAccounting Standards Board ("FASB") issuedInterpretation No. 46 ("FIN 46"),"Consolidation of Variable InterestEntities." FIN 46 requires an investor with a majority ofthe variable interests ("primarybeneficiary") in a variable interest entity("VIE") to consolidate the entity and alsorequires majority and significant variable interest investors toprovide certain disclosures. A VIE is an entity in which the votingequity investors do not have a controlling financial interest, or theequity investment at risk is insufficient to finance the entity'sactivities without receiving additional subordinated financial supportfrom other parties. For arrangements entered into with VIEs createdprior to January 31, 2003, the provisions of FIN 46 were originallyeffective as of the beginning of the three months ended September 30,2003; however, the FASB subsequently delayed the effective date of thisprovision until the first interim or annual period ending afterDecember 15, 2003 for entities that have interests in structures thatare commonly referred to as special-purpose entities and for periodsending after March 15, 2004 for all other types of variable interestentities. The provisions of FIN 46 were effective immediately for allarrangements entered into with new VIEs created after January 31, 2003.The Company identified one VIE but did not consolidate the entity asthe impact on the Company's financial statements was notmaterial.

|          |                    |
|----------|--------------------|
| 7.  | 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 in a number ofgeographic locations through the Company's owned-and-operatedfacilities and its network of independent agents. The geographicoperations are organized in three regions: North America, Europe andAsia Pacific.

10

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                                 |
|----------|---------------------------------|
| 7.  | SegmentInformation  (Continued) |

The following table presents revenue andother financial information for the reportable segment by geographicregion (inthousands):

|                                |  |                |         |        |  |             |        |          |  |        |        |        |  |        |         |        |  |        |        |        |  |        |         |        |  |  |
|--------------------------------|--|----------------|---------|--------|--|-------------|--------|----------|--|--------|--------|--------|--|--------|---------|--------|--|--------|--------|--------|--|--------|---------|--------|--|--|
|                           |  | RentalandSales |         |
| Threemonths endedMarch 31,2004 |  | NorthAmerica   |         | Europe |  | AsiaPacific |        | Subtotal |  | Other  |        | Total  |
|                           |  |           |    |   |  |        |   |     |  |   |   |   |  |   |    |   |  |   |   |   |  |   |    |   |
| Revenuefrom externalcustomers  |  | $              | 24,585  |   |  | $           | 18,675 |     |  | $      | 7,205  |   |  | $      | 50,465  |   |  | $      | 4,457  |   |  | $      | 54,922  |   |
|                           |  |           |    |   |  |        |   |     |  |   |   |   |  |   |    |   |  |   |   |   |  |   |    |   |
| Long-livedassets               |  |           | 507,372 |   |  |        | 29,496 |     |  |   | 11,645 |   |  |   | 548,513 |   |  |   | 10,073 |   |  |   | 558,586 |   |
|                           |  |
|                           |  |
|                           |  | RentalandSales |         |
| Threemonths endedMarch 31,2003 |  | NorthAmerica   |         | Europe |  | AsiaPacific |        | Subtotal |  | Other  |        | Total  |
|                           |  |           |    |   |  |        |   |     |  |   |   |   |  |   |    |   |  |   |   |   |  |   |    |   |
| Revenuefrom externalcustomers  |  | $              | 25,799  |   |  | $           | 15,856 |     |  | $      | 3,461  |   |  | $      | 45,116  |   |  | $      | 1,183  |   |  | $      | 46,299  |   |
|                           |  |
| **December31,2003**            |  |           |    |   |  |        |   |     |  |   |   |   |  |   |    |   |  |   |   |   |  |   |    |   |
|                           |  |
| Long-livedassets               |  |           | 513,201 |   |  |        | 29,680 |     |  |   | 12,086 |   |  |   | 554,967 |   |  |   | 10,484 |   |  |   | 565,451 |   |
|                           |  |           |    |   |  |        |   |     |  |   |   |   |  |   |    |   |  |   |   |   |  |   |    |   |
|                                |

Noone customer accounted for more than 10 percent of the Company'sconsolidated net revenues for the three months ended March 31, 2004 andMarch 31, 2003.

The accounting policies of the geographicregions are the same as those described in Note 1 of the Notes to theConsolidated Financial Statements included in the Company's 2003Annual Report on Form 10-K/A.

|          |                    |
|----------|--------------------|
| 8.  | Comprehensive Loss |

Components ofaccumulated other comprehensive loss are as follows (inthousands):

|                                       |  |                           |         |         |  |        |        |         |  |  |
|---------------------------------------|--|---------------------------|---------|---------|--|--------|--------|---------|--|--|
|                                  |  | ThreeMonths EndedMarch31, |
|                                  |  | 2004                      |         | 2003    |
| Netloss                               |  | $                         | (13,967 | )  |  | $      | (7,354 | )  |
|                                  |  |
| Foreigncurrency translationadjustment |  |                      | (365    | )  |  |   | 1,739  |    |
| Totalcomprehensiveloss                |  | $                         | (14,332 | )  |  | $      | (5,615 | )  |
|                                       |

|          |                   |
|----------|-------------------|
| 9.  | NetLoss Per Share |

For the three months ended March 31, 2004 and2003, the basic and diluted per share data is based on theweighted-average number of common shares and dilutive potential commonshares outstanding 

11

----

PANAVISIONINC.     NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

|          |                                |
|----------|--------------------------------|
| 9.  | NetLoss Per Share  (Continued) |

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.

The following table sets forth the computation forbasic and diluted earnings per share (in thousands, except per shareinformation):

|                                                                                                 |  |                           |         |         |  |        |         |         |  |  |  |  |  |  |
|-------------------------------------------------------------------------------------------------|--|---------------------------|---------|---------|--|--------|---------|---------|--|--|--|--|--|--|
|                                                                                            |  | ThreeMonths EndedMarch31, |         |
|                                                                                            |  | 2004                      |         | 2003    |  |
| Numerator:                                                                                      |  |                      |    |    |  |   |    |    |  |
| Netloss                                                                                         |  | $                         | (13,967 | )  |  | $      | (7,354  | )  |  |
| Accreteddividends on Redeemable Series BPreferredStock                                          |  |                      | — |    |  |   | (1,319  | )  |  |
| Series CPreferred Stock accumulateddividend                                                     |  |                      | (765    | )  |  |   | (172    | )  |  |
| Series DPreferred Stock accumulateddividend                                                     |  |                      | (4,485  | )  |  |   | — |    |  |
| Numeratorfor basic and diluted loss per share –net loss attributableto commonstockholders |  | $                         | (19,217 | )  |  | $      | (8,845  | )  |  |
|                                                                                            |  |
|                                                                                            |  | ThreeMonths EndedMarch31, |         |
|                                                                                            |  | 2004                      |         | 2003    |  |
| Denominator:                                                                                    |  |                      |    |    |  |   |    |    |  |
| Denominatorfor basic loss per share –weighted averageshares                               |  |                      | 8,770   |    |  |   | 8,770   |    |  |
| Effect ofdilutive securities – stock options andwarrants                                  |  |                      | — |    |  |   | — |    |  |
| Denominatorfor diluted loss per share –adjusted weighted averageshares                    |  |                      | 8,770   |    |  |   | 8,770   |    |  |
| Basic loss pershare                                                                             |  | $                         | (2.19   | )  |  | $      | (1.01   | )  |  |
| Dilutedloss pershare                                                                            |  | $                         | (2.19   | )  |  | $      | (1.01   | )  |  |
|                                                                                                 |

|           |                     |
|-----------|---------------------|
| 10.  | 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—Transitionand Disclosure" ("SFAS 148"),which amends SFAS 123. SFAS 148 provides alternative methods oftransition for a voluntary change to the fair value based method ofaccounting for stock-based employee compensation. In addition, SFAS 148amends the disclosure requirements of SFAS 123 to require moreprominent and more frequent disclosures in financial statements aboutthe effects of stock-based compensation. The Company has complied withthe disclosure requirements of SFAS 148.

Had the Company appliedthe fair value recognition provision of FASB No. 123 to stock-basedemployee compensation, there would have been no effect on reported netloss or net loss per share for the three months ended March 31, 2004and 2003.

12

----

PANAVISIONINC.

Item 2.    Management'sDiscussion and Analysis of Financial Condition and Results ofOperations

Overview

The Company's revenue isderived from three sources: (i) camera rental operations, (ii) lightingrental operations, and (iii) sales and other revenue. Revenue fromcamera rental operations consists of the rental of camera systems,lenses and accessories to the motion picture and television industriesthrough a network of rental offices located throughout North America,Europe and the Asia Pacific region.

The Company's lightingrental operations generate revenue through the rental of lighting,lighting grip, transportation and distribution equipment, as well asmobile generators, which are all used in the production of featurefilms, television programs, commercials and other events. The Companyowns and operates lighting rental facilities in the United States,United Kingdom, Canada and Australia. Revenue generated by LeeLighting, the Company's lighting rental facility located in theUnited Kingdom, generates the majority of the Company's lightingrental operations revenue.

Sales and other revenue is comprisedof: (i) the manufacture and sale of lighting filters through LeeFilters in the United Kingdom and the United States; (ii) operations ofEFILM, LLC ("EFILM"), which providehigh-resolution scanning of film, digital color timing, laser filmrecording of digital video and high definition images to film, anddigital mastering services to the motion picture and televisionindustries; and (iii) sales of various consumable products, such asfilm stock, light bulbs and gaffer tape, which are used in all types ofproductions.

The Company considers revenue from internationalbusiness to be that revenue which is generated from the rental of itsequipment by productions that are located at production sites outsideof the United States.

This section should be read in conjunctionwith the Consolidated Financial Statements and accompanying Notesincluded in the Company's Annual Report on Form 10-K/A for theyear ended December 31, 2003 and the Critical Accounting Policies asdisclosed under item 7 in the Company's Annual Report on Form10-K/A for the year ended December 31, 2003.

Results ofOperations

The following discussion and analysis includes theCompany's consolidated results of operations for 2004 as comparedto 2003.

Quarter Ended March 31, 2004 Compared toQuarter Ended March 31, 2003

Camera Rental Operations

Camera rental revenue for the quarter ended March 31, 2004 was $30.8million. Revenue increased $1.4 million, or 4.8%, compared tothe quarter ended March 31, 2003. The increase principally reflects apositive translation effect of foreign exchange rate changes ofapproximately $2 million and, to a lesser degree, the inclusion ofrevenue from PANY Rental, Inc. ("PANYRental") as a result of the Company's consolidationof PANY Rental's results of operations from the date it increasedits ownership of PANY Rental to 67% in May 2003. Decreasedrevenues in the U.S. and Asia Pacific region, principally feature filmrevenues, partially offset the increase.

Cost of camera rentalfor the quarter ended March 31, 2004 was $16.4 million, as compared to$14.9 million for the quarter ended March 31, 2003. The increase inexpense occurred due to higher international expenses attributable toforeign exchange rate changes and the inclusion of expenses from PANYRental as a result of the Company's consolidation of PANYRental's results of operations, as well as higher personnel andother costs to enhance customer service consistent with theCompany's strategy. As a percentage of camera rental revenues,cost of camera rental increased from 50.7% for the quarter endedMarch 31, 2003 to 53.2% for the quarter ended March 31, 2004.Gross Margin from camera rental was $14.4 million for the quarter endedMarch 31, 2004 compared to $14.5 million for the quarter ended March31, 2003.

13

----

PANAVISIONINC.

Lighting Rental Operations

Lighting rental revenue for the quarter ended March 31, 2004 was$8.5 million, an increase of $1.7 million, or 25.4%, compared tothe quarter ended March 31, 2003. The primary driver was inclusion oflighting rental revenues of $1.8 million from PANY Rental as a resultof the Company's consolidation of PANY Rental's results ofoperations, and the positive translation effect of foreign exchangerates, partially offset by decreased revenues at Lee Lighting in theU.K.

Cost of lighting rental for the quarter ended March 31,2004 was $8.1 million, an increase of $1.3 million, or 19.2%.The increase was primarily due to increased expense of $1.2 millionrelated to consolidation of PANY Rental's lighting business andinclusion of the translation effect of foreign exchange rates,partially offset by decreased activity at Lee Lighting in the U.K. Thedecreased expense at Lee Lighting relates to the decreased revenuesdiscussed above. Gross margin from lighting rental increased by $0.4million for the quarter ended March 31, 2004 as compared to the quarterended March 31, 2003.

Sales and Other

Sales and otherfor the quarter ended March 31, 2004 was $15.6 million, an increase of$5.5 million, or 54.4%, from the quarter ended March 31, 2003.The increase was primarily due to continued growth in EFILM revenue of$3.6 million. The balance of the change was primarily due tointernational operations, principally attributable to foreign exchangerate changes.

Cost of sales and other for the quarter endedMarch 31, 2004 was $8.6 million, an increase of $2.4 million, or37.9%. Costs increased $1.2 million due to the continued growthin revenue at EFILM, with the remaining increase due to highertranslated expenses associated with the higher international revenues.Gross margin for sales and other increased by $3.1 million to $7.0million for the quarter ended March 31, 2004 as compared to the quarterended March 31, 2003.

Operating Costs

Selling, generaland administrative expenses for the quarter ended March 31, 2004 were$18.8 million, an increase of $0.1 million compared to the quarterended March 31, 2003. While selling, general and administrativeexpenses were comparable for the quarters ended March 31, 2004 andMarch 31, 2003, there were several significant changes in thecomposition of these expenses. Activity for the quarter ended March 31,2003 included severance expense of $4.0 million in connection with thedeparture of the Company's former Chief Executive Officer andChief Financial Officer. Activity for the quarter ended March 31, 2004included increased expenses at EFILM of $0.5 million related toexpansion since the prior year, $1.0 million for expenses at PANYRental which was not consolidated prior to June 2003, and approximately$0.9 million related to increased infrastructure expenses, primarilypersonnel related, to support future growth initiatives. The balance ofthe increase related principally to foreign exchange rate changes,consistent with the increase in international revenues as discussedearlier, and incentive compensation accruals.

Research anddevelopment expenses for the quarter ended March 31, 2004 were $1.5million, an increase of $0.2 million, or 18.9 %, from thequarter ended March 31, 2003. The change related to the Company'sstrategy to increase new product development efforts.

Interest,Taxes and Other

Net interest expense for the quarter endedMarch 31, 2004 was $7.9 million, a decrease of $0.3 million, or3.5%, as compared to the quarter ended March 31, 2003. Thedecrease in expense primarily reflects lower debt balances compared tothe prior quarter, offset in part by higher effective interest rates in2004. The lower debt balances result from the contribution in 2003 of$90.9 million principal amount of the95/8% Senior SubordinatedDiscount Notes due 2006("95/8%Notes") owned by Mafco Holdings Inc. ("MafcoHoldings") in exchange for equity and lower debt balancesas a result of the January 2004 Refinancing (defined below in"Long-Term Debt"), as well as payments ofscheduled amortization.

14

----

PANAVISIONINC.

Foreign exchange gain for the quarterended March 31, 2004 was $0.1 million as compared to a $0.9 millionforeign exchange loss for the quarter ended March 31, 2003. Theincrease was primarily due to the effects of the fluctuating foreigncurrencies on the foreign currency denominated intercompany balancesheld in the U.S.

Refinancing expense of $6.5 million for thequarter ended March 31, 2004 reflects costs incurred in connection withthe Company's January 2004 Refinancing and costs previouslyincurred in connection with the Company's Prior Credit Agreement(defined below in "Long-Term Debt"). Thesecosts represent primarily lender and professional fees incurred by theCompany.

The tax provision for the quarter ended March 31, 2004was $1.5 million, as compared to a tax benefit of $3.0 million for thequarter ended March 31, 2003. For the quarter ended March 31, 2004 theCompany recorded a $4.2 million tax benefit associated with domestictax losses. In assessing the recoverability of the related increase todeferred tax assets, the Company increased its valuation allowance by$3.3 million, resulting in a net domestic tax benefit of $0.9 million.This was offset by a $2.4 million provision relating to profitableforeign operations, based on application of the Company'seffective tax rate on full-year income, and foreign taxes withheld atsource. See Note 6 to Consolidated Financial Statements included in theForm 10-K/A for a discussion of the Company's Tax SharingAgreements.

Under applicable Internal Revenue Serviceregulations, as a result of the M&F Settlement (defined in Note 1of Notes to Condensed Consolidated Financial Statements included inthis Quarterly Report on Form 10-Q), the Company may not join in filinga consolidated federal income tax return with either Mafco Holdings orthe Company's subsidiaries until May 2006 without consent fromthe Internal Revenue Service. Accordingly, from the effective date ofthe M&F Settlement of March 3, 2002, the Company will file separatefederal income tax returns for the Company and incorporatedsubsidiaries. The Company does not believe that deconsolidation of itsfederal income tax returns will have a material adverse effect on theCompany's business or financial condition.

Liquidity andCapital Resources

The following table sets forth certaininformation from the Company's condensed consolidated statementsof cash flows for the periods indicated (inthousands):

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |
|                          |  | ThreeMonthsEnded March31, |
|                          |  | 2004 |  | 2003 |
| Netcash provided by (usedin): |  |   |   |   |  |   |   |   |
| Operatingactivities           |  | $ | (1,817 | )  |  | $ | 556 |   |
| Investingactivities           |  |   | (5,774 | )  |  |   | (7,172 | )  |
| Financingactivities           |  |   | 7,394 |   |  |   | 7,238 |   |
|                               |

Cash usedin operating activities for the three months ended March 31, 2004,totaled $1.8 million comprised of the net loss of $14.0 million,adjusted for depreciation and amortization of $11.4 million, and thenet change in working capital (excluding cash) and other miscellaneousitems of $0.8 million. Total investing activities of $5.8 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 fromMafco Holdings of $22.7 million, net of transaction costs, andborrowing under a line of credit provided by Mafco Holdings of $2.0million.

Cash provided by operating activities for the threemonths ended March 31, 2003, totaled $0.6 million comprised of the netloss of $7.4 million, adjusted for depreciation and amortization of$10.9 million, offset by the net change in working capital (excludingcash) and other miscellaneous items totaling $2.9 million. Totalinvesting activities of $7.2 million consisted of capital expenditures.The majority of the capital expenditures were used to manufacturecamera rental systems and accessories.

15

----

PANAVISIONINC.

Cash provided by financing activities was$7.2 million, which was comprised of repayments of $3.8 million underthe Prior Credit Agreement, deferred financing costs of $3.2 million,proceeds from the issuance of Series B Preferred Stock of $4.4 millionand a capital contribution from Mafco Holdings of $9.8 million, net oftransaction costs.

Long-Term Debt

The95/8% Senior SubordinatedDiscount Notes Due 2006("95/8%Notes") were issued at a discount representing a yield tomaturity of 95/8%. There were noperiodic or interest payments through February 1, 2002. Thereafter,they bear interest at a rate of95/8% per annum, payablesemi-annually on February 1 and August 1 of each year, commencingAugust 1, 2002.

On August 13, 2003, MacAndrews & Forbesagreed to amend an existing line of credit provided to the Company toincrease the amount available for borrowing from $4.0 million to $10.0million and extend the maturity date to August 31, 2006 (as amended,the "MacAndrews Line"). In connection with anamendment to the Company's Prior Credit Agreement (as definedbelow), on November 12, 2003, MacAndrews & Forbes agreed to providea second revolving line of credit (the "Second MacAndrewsLine") in the amount of $10.0 million at a rate equal to50 basis points above the rate provided for in the revolving facilitypursuant to the Prior Credit Agreement and a maturity of April 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 Series DPreferred Stock (as defined below) and (ii) MacAndrews & Forbesincreased the amount of the Second MacAndrews Line to $20.0 million andextended the maturity to April 16, 2009. As of March 31, 2004, theCompany had availability under the Second MacAndrews line ofapproximately $14.6 million.

On June 4, 1998, the Companyentered into a Credit Agreement with a syndicate of lenders (assubsequently amended on September 30, 1998, June 30, 1999, March 15,2002, June 14, 2002, September 30, 2002, March 25, 2003 and November12, 2003, the "Prior Credit Agreement"). TheCompany's obligations under the Prior Credit Agreement weresecured by substantially all of the Company's assets. The PriorCredit Agreement was comprised of two facilities, the Term Facility andthe Revolving Facility. As of December 31, 2003, amounts outstandingunder the Prior Credit Agreement were $151.8 million and $99.2 millionfor the Term Facility and Revolving Facility, respectively. Asdescribed below, the Prior Credit Agreement was replaced with theAmended and Restated Credit Agreement pursuant to the January 2004Refinancing.

On January 16, 2004, the Company consummated aseries of transactions to refinance its indebtedness under the PriorCredit Agreement (the "January 2004Refinancing"). As part of the January 2004 Refinancing,the Company sold, in a private placement, $104.2 million of seniorsecured notes (the "Senior Notes") bearinginterest at a rate of 12.50%, payable quarterly, with a maturitydate of January 16, 2009. The Senior Notes were sold at an originalissue discount of approximately 4% for an aggregate purchaseprice of $100.0 million. The Senior Notes are secured by asecond-priority lien on substantially all of the Company'sassets. The indenture pursuant to which the Senior Notes were issued(the "2004 Indenture") requires that, amongother provisions, the Company achieve certain EBITDA levels and abideby certain other restrictive covenants, including limitations onindebtedness, liens, disposition of assets, and certain restrictedpayments including dividends to stockholders. Upon certain events ofdefault under the 2004 Indenture, the Senior Notes will bear interestat 2.5% above the rate otherwise applicable.

Also as partof the January 2004 Refinancing, the Company issued to PX Holding215,274 shares of new Series D Cumulative Pay-in-Kind Preferred Stock,par value $0.01 per share (the "Series D PreferredStock") in exchange for (a) 159,644 shares of Series CCumulative Pay-in-kind Preferred Stock, par value $0.01 per share (the"Series C Preferred Stock"), of the Company,held by PX Holding (together with approximately $13.2 million ofaccumulated dividends 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, the Company owned 100% of the

16

----

PANAVISIONINC.

outstanding shares of PANY Rental); (e) theretirement of all amounts (consisting of $630,780 in principal and$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 Mafco Holdings under a certainpromissory note in the principal amount of $6.7 million, dated July 1,2002, issued by the Company to M & F Worldwide and subsequentlyacquired by Mafco Holdings. The Series D Preferred Stock is non-voting,has a liquidation preference of $1,000 per share plus accrued andunpaid dividends, and entitles the holder to cumulative dividends at arate of 10% per annum regardless of whether declared or earned.Additionally, the Series D Preferred Stock is subject to redemption incertain circumstances upon a change of control. The Company also issuedto PX Holding 1,381,690 shares of new Series E Non-Cumulative PerpetualParticipating Preferred Stock, par value $0.01 per share, (the"Series E Preferred Stock") in exchange for1,381,690 shares of Series A Non-Cumulative Perpetual ParticipatingPreferred Stock, par value $0.01 per share (the "Series APreferred Stock"). The Series E Preferred Stock isentitled to one vote per share, voting together with the Common Stockas a single class, has a liquidation preference of $1.00 per share plusaccrued and unpaid dividends, and provides for non-cumulative cashdividends at an annual rate of $0.05 per share if declared by theCompany. As a result of the January 2004 Refinancing transactions, allof the outstanding shares of Series A and Series C Preferred Stock weretransferred to the Company. In addition, MacAndrews & Forbesincreased the amount of the Second MacAndrews Line to $20.0 million andextended the maturity to April 16, 2009.

The Company 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 onSeptember 5, 2005 if any of the95/8% Notes remain outstanding onthat date. The term facility bears interest at either the ABR orEurodollar Rate (as defined in the Amended Credit Agreement) plus amargin of 5.25% in the case of ABR loans or 6.25% in thecase of Eurodollar Loans. The term facility under the Amended CreditAgreement is secured on substantially the same basis as indebtednessunder the Prior Credit Agreement. In connection with the Amended CreditAgreement, the Company paid fees to lenders and professional advisorsof approximately $3.5 million, including an original issue discount feeof approximately $2.0 million. Approximately $3.1 million of the feespaid were expensed in 2004.

Under the Amended Credit Agreement,the Company is required to repay $5.0 million in principal in 2004,whereas under the Prior Credit Agreement the Company would have beenrequired to make principal payments of approximately $221.1 million in2004. In addition, the Amended Credit Agreement revised certainfinancial tests and other restrictive covenants set forth in the PriorCredit Agreement, including required EBITDA (as defined), limitationson indebtedness, and other provisions. As defined in the Amended CreditAgreement and 2004 Indenture, EBITDA includes adjustments for severanceexpense, refinancing expense, foreign exchange gain or loss, and othernon-cash charges. As of March 31, 2004, $134.4 million was outstandingunder the Amended Credit Agreement.

As a result of the January2004 Refinancing, in accordance with Statement of Financial AccountingStandards No. 6, "Classification of Short-Term ObligationsExpected to be Refinanced" ("SFAS6"), the Company reclassified $246.0 million of therefinanced debt to long-term debt as of December 31, 2003.

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

Capital Expenditures, LiquidityRequirements and Other

The Company intends to use cash providedby operating activities and its revolving lines of credit to makeadditional capital expenditures primarily to manufacture camera systemsand accessories and 

17

----

PANAVISIONINC.

purchase other rental equipment. Based onprojected revenues in 2004 and beyond, the Company anticipatesincurring a higher level of capital expenditures in 2004 as compared to2003. Consistent with the Company's view of the market and itsrelated strategy, a higher percentage of such spending will pertain tothe Company's core film business as compared to recent years. Inaddition, a higher level of spending for new products for the core filmbusiness is projected relative to recent years.

Off-BalanceSheet Arrangements

The Company does not have any off-balancesheet financing arrangements.

Contractual Obligations

The Company has certain cash obligations and other commercialcommitments that will affect its short and long-term liquidity. AtMarch 31, 2004, such obligations and commitments were as follows (inthousands):

|                        |  |                       |         |                 |  |                   |        |                   |  |              |         |        |  |        |         |        |  |        |         |        |  |  |
|------------------------|--|-----------------------|---------|-----------------|--|-------------------|--------|-------------------|--|--------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                   |  | PaymentsDue by Period |
| ContractualObligations |  | Total                 |         | Less than 1Year |  | Between 1-3 Years |        | Between 4-5 Years |  | After5 Years |
| Long-termdebt          |  | $                     | 307,659 |            |  | $                 | 6,672  |              |  | $            | 195,166 |   |  | $      | 105,821 |   |  | $      | — |   |
| Operatingleases        |  |                  | 36,087  |            |  |              | 10,348 |              |  |         | 14,791  |   |  |   | 7,505   |   |  |   | 3,443   |   |
| Total                  |  | $                     | 343,746 |            |  | $                 | 17,020 |              |  | $            | 209,957 |   |  | $      | 113,326 |   |  | $      | 3,443   |   |
|                        |

Panavisionis a holding company whose principal material asset is the ownershipinterest in its subsidiaries. The Company's principal businessoperations are conducted by its subsidiaries. Accordingly, theCompany's source of cash to pay its obligations is expected to bedistributions with respect to its ownership interests in itssubsidiaries. There can be no assurance that its subsidiaries willgenerate sufficient cash flow to pay dividends or distribute funds tothe Company or that applicable state law and contractual restrictions,including negative covenants contained in the debt instruments of suchsubsidiaries, will permit such dividends or distributions.

Seasonality

The Company's revenue and net income aresubject to seasonal fluctuations. In North America, episodic televisionprograms cease filming in the second quarter for several months, andtypically resume production in August. Feature film production activitytypically reaches its peak in the third and fourth quarters.

SFAS No. 142, "Goodwill and Other IntangibleAssets"

The Company adopted SFAS No. 142"Goodwill and Other Intangible Assets,"("SFAS 142") on January 1, 2002. SFAS 142requires that goodwill and indefinite-lived intangible assets not beamortized but, instead, tested at least annually for impairment whileintangible assets that have finite useful lives continue to beamortized over their respective useful lives. Accordingly, the Companyceased amortization of goodwill and tradename on January 1, 2002, andwill continue to amortize intangible assets with finite useful livesover their respective useful lives. SFAS 142 requires that goodwill betested for impairment using a two-step process. The first step is todetermine the fair value of the reporting unit, which may be calculatedusing a discounted cash flow methodology, and compare this value to itscarrying value. If the fair value exceeds the carrying value, nofurther work is required and no impairment loss would be recognized.The second step is an allocation of the fair value of the reportingunit to all of the reporting unit's assets and liabilities undera hypothetical purchase price allocation.

The Company performedan impairment test relating to its goodwill and tradename as of January1, 2002, December 31, 2002 and December 31, 2003, and found that thefair values of its goodwill and its tradename are in excess of carryingvalue.

The Company believes that there have been no materialchanges in the fair values of its goodwill and tradename as of March31, 2004.

18

----

PANAVISIONINC.

Forward-Looking Statements

Thisquarterly report on Form 10-Q for the quarter ended March 31, 2004, aswell as certain of the Company's other public documents andstatements and oral statements, contain forward-looking statements thatreflect management's current assumptions and estimates of futureperformance and economic conditions. Such statements are made inreliance upon safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995. The Company cautions investors thatforward-looking statements are subject to risks and uncertainties thatmay cause actual results and future trends to differ materially fromthose projected, stated, or implied by the forward-looking statements.In addition, estimates of cost savings included in this Form 10-Q arebased on various assumptions that are subject to inherent uncertaintyand actual cost savings could vary from these estimates. Further, theCompany encourages investors to read the summary of its criticalaccounting policies included in the Company's Annual Report onForm 10-K/A for the year ended December 31, 2003.

In addition tofactors described in the Company's Securities and ExchangeCommission filings and others, the following factors could cause theCompany's actual results to differ materially from thoseexpressed in any forward-looking statements made by the Company: (a) asignificant reduction in the number of feature film, commercial orseries television productions; (b) competitive pressures arising fromchanges in technology, customer requirements, price competition andindustry standards; (c) an increase in expenses related to new productinitiatives and product development efforts; (d) unfavorable foreigncurrency fluctuations; (e) significant increases in interest rates; (f)lower-than-expected cash flows from operations; (g) difficulties ordelays in developing and introducing new products or failure of theCompany's customers to accept new product offerings; (h)difficulties or delays in implementing improvements in operatingefficiencies; (i) delays in customer acceptance of digital laboratoryservices; or (j) the inability to secure capital contributions or loansfrom affiliates, refinance its indebtedness or sell its equitysecurities. The Company assumes no responsibility to update theforward-looking statements contained in this filing.

Item3.    Quantitative and Qualitative Disclosures About Market Risk

The Company has exposure to market risk both as a result of changinginterest rates and movements in foreign currency exchange rates. TheCompany manages its exposure to these market risks through its regularoperating and financing activities. Item 7A of the Company'sAnnual Report on Form 10-K/A for the year ended December 31, 2003presents quantitative and qualitative disclosures about market risk asof December 31, 2003. As of March 31, 2004, there have been no materialchanges in the Company's market risk since December 31, 2003.

Item 4.    Controls and Procedures

(a) DisclosureControls and Procedures. The Company's management, with theparticipation of the Company's Chief Executive Officer and ChiefFinancial Officer, has evaluated the effectiveness of theCompany's disclosure controls and procedures (as such term isdefined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as ofthe end of the fiscal period covered by this Quarterly Report on Form10-Q. Based upon such evaluation, the Chief Executive Officer and ChiefFinancial Officer have concluded that, as of the end of such period,the Company's disclosure controls and procedures are effective inrecording, processing, summarizing and reporting, on a timely basis,information required to be disclosed by the Company in the reports itfiles or submits under the Exchange Act.

(b) Changes in InternalControl Over Financial Reporting. There have not been any changes inthe Company's internal control over financial reporting (as suchterm is defined in Rules 13a-15(f) and 15d-15(f) under the ExchangeAct) during the fiscal period to which this Quarterly Report on Form10-Q relates that have materially affected, or are reasonably likely tomaterially affect, the Company's internal control over financialreporting.

19

----

PANAVISIONINC.

PART II – OTHER INFORMATION

|              |                   |
|--------------|-------------------|
| Item1.  | Legal Proceedings |

|        |                                           |
|--------|-------------------------------------------|
|   | No material legal proceedings arepending. |

|               |                       |
|---------------|-----------------------|
| Item 2.  | Changes in Securities |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In connection with the January 2004Refinancing, on January 16, 2004, the Company issued to PX Holding215,274 shares of Series D Preferred Stock and 1,381,690 shares ofSeries E Preferred Stock, each in private transactions pursuant toSection 4(2) of the Securities Act. The purchaser was an"accredited investor" as defined in Rule 501of Regulation D. For a description of the consideration received by theCompany in the issuance, see "Management'sDiscussion and Analysis of Financial Condition and Results ofOperations — Liquidity and Capital Resources — Long-TermDebt." |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Series D PreferredStock is non-voting, has a liquidation preference of $1,000 per shareplus accrued and unpaid dividends, and entitles the holder tocumulative dividends at a rate of 10% per annum regardless ofwhether declared or earned. The Series E Preferred Stock is entitled toone vote per share, voting together with the Common Stock as a singleclass, has a liquidation preference of $1.00 per share plus accrued andunpaid dividends, and provides for non-cumulative cash dividends at anannual rate of $0.05 per share if declared by the Company. |

|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Series D and Series E Preferred Stock rankahead of the Company's Common Stock with respect to the paymentof distributions and, accordingly, unless all dividends due on theSeries D and Series E have been paid in full, there are restrictions onthe payment or declaration of any dividends or other distributions uponthe Common Stock of the Company. In addition, the indenture governingthe Senior Notes provides for certain restrictions on the Companymaking any "restricted payments" which aredefined to include, among other things, dividends on theCompany's capital stock. |

|        |                                                                                                                                                                                                                                                          |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As a resultof the January 2004 Refinancing, all of the outstanding shares ofSeries A Non-Cumulative Participating Preferred Stock, $0.01 par value,and Series C Cumulative Pay-in-Kind Preferred Stock, $0.01 par value,were transferred to the Company. |

|              |                                 |
|--------------|---------------------------------|
| Item3.  | Defaults Upon Senior Securities |

|        |                                                                                                |
|--------|------------------------------------------------------------------------------------------------|
|   | There were no events of default uponsenior securities during the quarter ended March 31, 2004. |

|        |                                                                                                                                                                                                                                                                                                                                        |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | As of May 14, 2004, the Company has accumulatedapproximately $4.5 million of unpaid dividends on the Series DPreferred Stock with the agreement of the holders thereof. Dividends onthe Series D Preferred Stock are cumulative and payable, at the optionof the Company, in cash and/or additional shares of Series D PreferredStock. |

|               |                                                    |
|---------------|----------------------------------------------------|
| Item 4.  | Submission of Matters to aVote of Security Holders |

|        |                                                                                                      |
|--------|------------------------------------------------------------------------------------------------------|
|   | Therewere no matters submitted to a vote of security holders during thequarter ended March 31, 2004. |

|               |                  |
|---------------|------------------|
| Item 5.  | OtherInformation |

|        |                                             |
|--------|---------------------------------------------|
|   | No additional information needbe presented. |

|               |                                |
|---------------|--------------------------------|
| Item 6.  | Exhibits and Reportson Form8-K |

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

|             |                                             |
|-------------|---------------------------------------------|
| **3**  | **Certificateof Incorporation and By-Laws** |

20

----

|           |                                                                                                                                                                                                                |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1  | RestatedCertificate of Incorporation of the Company (incorporated herein byreference to the identically numbered exhibit to the Company'sQuarterly Report on Form 10-Q for the quarter ended March 31,1999).** |

|           |                                                                                                                                                                                           |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.2  | Restated By-Laws of theCompany (incorporated herein by reference to the identically numberedexhibit to the Company's Quarterly Report on Form 10-Q for thequarter ended March 31,1999).** |

|           |                                                                                                                                                                                                                                                                         |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.3  | Certificate of theDesignations, Powers, Preferences and Rights of Series D CumulativePay-in-Kind Preferred Stock of Panavision Inc. (incorporated herein byreference to Exhibit 3.6 to the Company's Annual Report on Form10-K for the year ended December 31, 2003).** |

|           |                                                                                                                                                                                                                                                                                        |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.4  | Certificate of the Designations,Powers, Preferences and Rights of Series E Non-Cumulative PerpetualParticipating Preferred Stock of Panavision Inc. (incorporated hereinby reference to Exhibit 3.7 to the Company's Annual Report onForm 10-K for the year ended December 31,2003).** |

|         |                                                                         |
|---------|-------------------------------------------------------------------------|
| 4  | Instruments Defining the Rightsof Security Holders, IncludingIndentures |

|           |                                                                                                                                                                                                                                                                                              |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1  | Amended andRestated Senior Subordinated Line of Credit Agreement dated January 16,2004, between Panavision Inc. and MacAndrews & Forbes Holdings Inc.(incorporated herein by reference to Exhibit 4.1 to the Company'sAnnual Report on Form 10-K for the year ended December 31,2003).** |

|           |                                                                                                                                                                                                                                                                                                             |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.2  | Indenture, dated as ofJanuary 16, 2004, between Panavision Inc. and Wilmington Trust Company,as Trustee, relating to the Company's 12.50% SeniorSecured Notes due 2009 (incorporated herein by reference to Exhibit4.17 to the Company's Annual Report on Form 10-K for the yearended December 31, 2003).** |

|           |                                                                                                                                                                                |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.3  | Formof 12.50% Senior Secured Note due 2009 (incorporated herein byreference to Exhibit 4.17 to the Company's Annual Report on Form10-K for the year ended December 31,2003).** |

|           |                                                                                                                                                                                                                                                                                                                                                               |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.4  | 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 to Exhibit 4.19 to theCompany's Annual Report on Form 10-K for the year ended December31, 2003).** |

|          |                   |
|----------|-------------------|
| 10  | MaterialContracts |

|            |                                                                                                                                                                                                                                                                                              |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1  | LetterAgreement dated as of January 16, 2004, among Mafco Holdings Inc.,MacAndrews & Forbes Holdings Inc., PX Holding Corporation andPanavision Inc.(incorporated herein by reference to Exhibit 4.20 to theCompany's Annual Report on Form 10-K for the year ended December31, 2003).** |

|          |                           |
|----------|---------------------------|
| 31  | Section 302Certifications |

|            |                                                                                   |
|------------|-----------------------------------------------------------------------------------|
| 31.1  | Certification of Robert L.Beitcher, Chief Executive Officer, dated May 14, 2004.* |

|            |                                                                                 |
|------------|---------------------------------------------------------------------------------|
| 31.2  | Certification of Bobby G. Jenkins,Chief Financial Officer, dated May 14, 2004.* |

|          |                           |
|----------|---------------------------|
| 32  | Section 906Certifications |

|            |                                                                                                                                                                                                                                                               |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 32.1  | Certificationsof Robert L. Beitcher, Chief Executive Officer, and Bobby G. Jenkins,Chief Financial Officer, dated May 14, 2004, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002 (furnished herewith).* |

| * | Filed herewith. |
|---|-----------------|

| ** | Previously filed. |
|----|-------------------|

21

----

|               |                         |
|---------------|-------------------------|
| **(b)**  | **Reportson Form 8-K.** |

|        |                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | On January 20,2004, the Company filed a Current Report on Form 8-K dated January 20,2004. The Form 8-K reported at Item 5 that the Company issued a pressrelease announcing completion of the Company's refinancingactivities. |

22

----

PANAVISION

SIGNATURES

**Pursuant to the requirements of theSecurities Exchange Act of 1934, the Registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto dulyauthorized.**

|  | **PANAVISIONINC.** |
|--|--------------------|

|        |  |             |  |        |  |                                                                                                 |  |  |  |  |  |  |  |  |
|--------|--|-------------|--|--------|--|-------------------------------------------------------------------------------------------------|--|--|--|--|--|--|--|--|
| Date:  |  | May 14,2004 |  | By:    |  | /s/ROBERT L. BEITCHER                                                                           |
|   |  |        |  |   |  | Robert L.BeitcherPresident and Chief ExecutiveOfficer                                           |
|   |  |        |  | By:    |  | /s/BOBBY G. JENKINS                                                                             |
|   |  |        |  |   |  | BobbyG. JenkinsExecutive Vice President, Chief FinancialOfficer and Principal AccountingOfficer |
|        |

23

----