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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.20549

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FORM10-Q

**(Mark One)**

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

**For the quarterly period ended June 30, 2004**

**OR**

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

**For the transition period from                                                   to                                                   **

Commission file number:001-12391

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PANAVISIONINC.(Exact name of Registrant as specified initscharter)

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

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Registrant's telephonenumber including area code

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**Indicateby check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period thatthe registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90days.    Yes   **    **No**   

**Indicate by checkmark whether the registrant is an acceleratedfiler (as defined in Rule 12b-2 of the Securities Exchange Act of1934).    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 ofAugust 12, 2004, there were 8,769,919 shares of Panavision Inc. CommonStock, par value $0.01 per share,outstanding.

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PANAVISION INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDEDJUNE 30,2004

|             |  |                                                                                      |    |        |    |        |  |  |  |  |
|-------------|--|--------------------------------------------------------------------------------------|----|--------|----|--------|--|--|--|--|
| **PartI.**  |  | **FinancialInformation**                                                             |    |
| Item 1.     |  | FinancialStatements                                                                  |    |
|        |  | Condensed ConsolidatedStatements ofOperations                                        |    |   | 3  |   |
|        |  | Condensed Consolidated BalanceSheets                                                 |    |   | 4  |   |
|        |  | Condensed ConsolidatedStatements of Cash Flows                                       |    |   | 6  |   |
|        |  | Notesto Condensed Consolidated Financial Statements                                  |    |   | 8  |   |
| Item 2.     |  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations |    |   | 17 |   |
| Item 3.     |  | Quantitative and Qualitative Disclosures AboutMarket Risk                            |    |   | 26 |   |
| Item 4.     |  | Controls andProcedures                                                               |    |   | 27 |   |
| **PartII.** |  | **OtherInformation**                                                                 |    |
| Item1.      |  | LegalProceedings                                                                     |    |   | 28 |   |
| Item 2.     |  | Changes inSecurities, Use of Proceeds and Issuer Purchases of EquitySecurities       |    |   | 28 |   |
| Item 3.     |  | Defaults UponSenior Securities                                                       |    |   | 28 |   |
| Item4.      |  | Submission of Matters to a Vote of SecurityHolders                                   |    |   | 28 |   |
| Item 5.     |  | OtherInformation                                                                     |    |   | 28 |   |
| Item 6.     |  | Exhibitsand Reports on Form 8-K                                                      |    |   | 29 |   |
| SIGNATURES  |  |                                                                                 | 30 |   |
|             |

2

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PART I –FINANCIAL INFORMATION

Item 1.    Financial Statements

The financial information herein and management's discussionthereof include 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 STATEMENTSOF OPERATIONS (Unaudited) (In thousands, except per shareamounts)

|                                                    |  |                                   |         |                                 |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------|--|-----------------------------------|---------|---------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                               |  | Forthe Three MonthsEnded June 30, |         | For the SixMonths Ended June30, |
|                                               |  | 2004                              |         | 2003                            |  | 2004   |         | 2003    |
| Camerarental                                       |  | $                                 | 26,755  |                            |  | $      | 26,098  |    |  | $      | 57,599  |    |  | $      | 55,527  |    |
| Lightingrental                                     |  |                              | 10,955  |                            |  |   | 9,470   |    |  |   | 19,477  |    |  |   | 16,264  |    |
| Salesandother                                      |  |                              | 16,249  |                            |  |   | 12,866  |    |  |   | 31,805  |    |  |   | 22,942  |    |
| Totalrental revenue andsales                       |  |                              | 53,959  |                            |  |   | 48,434  |    |  |   | 108,881 |    |  |   | 94,733  |    |
| Costof camerarental                                |  |                              | 16,125  |                            |  |   | 15,441  |    |  |   | 32,524  |    |  |   | 30,309  |    |
| Costof lightingrental                              |  |                              | 9,837   |                            |  |   | 8,685   |    |  |   | 17,981  |    |  |   | 15,515  |    |
| Costof sales andother                              |  |                              | 8,563   |                            |  |   | 7,265   |    |  |   | 17,139  |    |  |   | 13,485  |    |
| Grossmargin                                        |  |                              | 19,434  |                            |  |   | 17,043  |    |  |   | 41,237  |    |  |   | 35,424  |    |
| Selling,general and administrativeexpenses         |  |                              | 19,039  |                            |  |   | 15,716  |    |  |   | 37,821  |    |  |   | 34,422  |    |
| Researchand developmentexpenses                    |  |                              | 1,460   |                            |  |   | 1,330   |    |  |   | 2,920   |    |  |   | 2,558   |    |
| Operatingincome(loss)                              |  |                              | (1,065  | )                          |  |   | (3      | )  |  |   | 496     |    |  |   | (1,556  | )  |
| Interestincome                                     |  |                              | 30      |                            |  |   | 67      |    |  |   | 48      |    |  |   | 112     |    |
| Interestexpense                                    |  |                              | (7,907  | )                          |  |   | (7,280  | )  |  |   | (15,800 | )  |  |   | (15,462 | )  |
| Foreignexchange gain(loss)                         |  |                              | 234     |                            |  |   | 211     |    |  |   | 485     |    |  |   | (752    | )  |
| Refinancingexpense                                 |  |                              | — |                            |  |   | — |    |  |   | (6,470  | )  |  |   | — |    |
| Otherincome,net                                    |  |                              | 1,441   |                            |  |   | 796     |    |  |   | 1,477   |    |  |   | 1,102   |    |
| Lossbefore incometaxes                             |  |                              | (7,267  | )                          |  |   | (6,209  | )  |  |   | (19,764 | )  |  |   | (16,556 | )  |
| Incometax (provision)benefit                       |  |                              | (280    | )                          |  |   | 2,527   |    |  |   | (1,750  | )  |  |   | 5,520   |    |
| Netloss                                            |  | $                                 | (7,547  | )                          |  | $      | (3,682  | )  |  | $      | (21,514 | )  |  | $      | (11,036 | )  |
| Netloss attributable to commonstockholders         |  | $                                 | (13,041 | )                          |  | $      | (7,683  | )  |  | $      | (32,258 | )  |  | $      | (16,528 | )  |
| Netloss per share – basic anddiluted         |  | $                                 | (1.49   | )                          |  | $      | (0.87   | )  |  | $      | (3.68   | )  |  | $      | (1.88   | )  |
| Sharesused in computation – basic anddiluted |  |                              | 8,770   |                            |  |   | 8,770   |    |  |   | 8,770   |    |  |   | 8,770   |    |
|                                                    |

Seeaccompanying notes.

3

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PANAVISION INC.

CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                           |  |              |         |                  |  |        |         |        |  |  |
|---------------------------------------------------------------------------|--|--------------|---------|------------------|--|--------|---------|--------|--|--|
|                                                                      |  | June30, 2004 |         | December 31,2003 |
|                                                                      |  | (Unaudited)  |         | (Note1)          |
| **ASSETS**                                                                |  |
| Currentassets:                                                            |  |         |    |             |  |   |    |   |
| Cash and cashequivalents                                                  |  | $            | 10,593  |             |  | $      | 9,079   |   |
| Accountsreceivable (net of allowance of $1,512 in 2004 and $2,586 in2003) |  |         | 30,184  |             |  |   | 29,255  |   |
| Inventories                                                               |  |         | 13,704  |             |  |   | 11,931  |   |
| Prepaidexpenses                                                           |  |         | 4,437   |             |  |   | 4,330   |   |
| Due fromrelated parties                                                   |  |         | 161     |             |  |   | 628     |   |
| Othercurrentassets                                                        |  |         | 2,584   |             |  |   | 1,248   |   |
| Totalcurrentassets                                                        |  |         | 61,663  |             |  |   | 56,471  |   |
| Property,plant and equipment,net                                          |  |         | 211,633 |             |  |   | 220,704 |   |
| Goodwill,net                                                              |  |         | 264,417 |             |  |   | 264,548 |   |
| Patents andtrademarks, net                                                |  |         | 66,992  |             |  |   | 67,258  |   |
| Otherassets                                                               |  |         | 9,709   |             |  |   | 12,941  |   |
| Totalassets                                                               |  | $            | 614,414 |             |  | $      | 621,922 |   |
|                                                                           |

Seeaccompanying notes.

4

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PANAVISION INC.

CONDENSEDCONSOLIDATED BALANCE SHEETS(In thousands, except sharedata)

|                                                                                                                                                                                                                                                    |  |              |          |                  |  |        |          |         |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------------|----------|------------------|--|--------|----------|---------|--|--|
|                                                                                                                                                                                                                                               |  | June30, 2004 |          | December 31,2003 |
|                                                                                                                                                                                                                                               |  | (Unaudited)  |          | (Note1)          |
| **LIABILITIES ANDSTOCKHOLDERS'EQUITY**                                                                                                                                                                                                             |  |
| Currentliabilities:                                                                                                                                                                                                                                |  |         |     |             |  |   |     |    |
| Accountspayable                                                                                                                                                                                                                                    |  | $            | 11,093   |             |  | $      | 6,685    |    |
| Accruedliabilities                                                                                                                                                                                                                                 |  |         | 30,361   |             |  |   | 28,955   |    |
| Dueto relatedparties                                                                                                                                                                                                                               |  |         | 2,835    |             |  |   | 2,643    |    |
| Currentmaturities of long-termdebt                                                                                                                                                                                                                 |  |         | 7,668    |             |  |   | 5,885    |    |
| Totalcurrentliabilities                                                                                                                                                                                                                            |  |         | 51,957   |             |  |   | 44,168   |    |
| Long-termdebt                                                                                                                                                                                                                                      |  |         | 294,791  |             |  |   | 312,388  |    |
| Note payable toaffiliate                                                                                                                                                                                                                           |  |         | 7,889    |             |  |   | 21,401   |    |
| Deferred taxliabilities, net                                                                                                                                                                                                                       |  |         | 28,189   |             |  |   | 30,060   |    |
| Otherliabilities                                                                                                                                                                                                                                   |  |         | 7,666    |             |  |   | 7,909    |    |
| Due torelatedparties                                                                                                                                                                                                                               |  |         | 1,389    |             |  |   | 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       |    |
| SeriesC Cumulative Pay-in-Kind Preferred Stock, $0.01 par value; 200,000shares authorized; 159,644 shares issued and outstanding at December31, 2003 (liquidation preference of $1,000 per share plus accrued andunpaiddividends)                  |  |         | —  |             |  |   | 2        |    |
| Series DCumulative Pay-in-Kind Preferred Stock, $0.01 par value; 300,000 sharesauthorized; 215,274 shares issued and outstanding at June 30, 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 June 30, 2004 (liquidation preference of $1 per shareplus declared and unpaiddividends)     |  |         | 14       |             |  |   | —  |    |
| CommonStock, $0.01 par value; 50,000,000 shares authorized; 8,769,919shares issued and outstanding at June 30, 2004 and December 31,2003                                                                                                           |  |         | 88       |             |  |   | 88       |    |
| Additional paid-incapital                                                                                                                                                                                                                          |  |         | 370,945  |             |  |   | 329,127  |    |
| Revaluationcapital                                                                                                                                                                                                                                 |  |         | 333,199  |             |  |   | 333,199  |    |
| Accumulateddeficit                                                                                                                                                                                                                                 |  |         | (483,309 | )           |  |   | (461,795 | )  |
| Accumulatedother comprehensiveincome                                                                                                                                                                                                               |  |         | 1,594    |             |  |   | 4,035    |    |
| Totalstockholders'equity                                                                                                                                                                                                                           |  |         | 222,533  |             |  |   | 204,670  |    |
| Totalliabilities and stockholders'equity                                                                                                                                                                                                           |  | $            | 614,414  |             |  | $      | 621,922  |    |
|                                                                                                                                                                                                                                                    |

Seeaccompanying notes.

5

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PANAVISIONINC.

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS(Unaudited) (Inthousands)

|                                                                          |  |                         |          |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------|--|-------------------------|----------|---------|--|--------|---------|---------|--|--|
|                                                                     |  | SixMonths Ended June30, |
|                                                                     |  | 2004                    |          | 2003    |
| **Operatingactivities**                                                  |  |                    |     |    |  |   |    |    |
| Netloss                                                                  |  | $                       | (21,514  | )  |  | $      | (11,036 | )  |
| Adjustmentsto derive net cash provided by (used in) operatingactivities: |  |                    |     |    |  |   |    |    |
| Depreciationandamortization                                              |  |                    | 22,290   |    |  |   | 21,440  |    |
| Write-offof deferred financingcosts                                      |  |                    | 3,436    |    |  |   | — |    |
| Gain ondispositions of property andequipment                             |  |                    | (1,824   | )  |  |   | (622    | )  |
| Amortizationof deferred financingcosts                                   |  |                    | 646      |    |  |   | 1,869   |    |
| Dividendsreceived from equityinvestments                                 |  |                    | 1,112    |    |  |   | — |    |
| Deferredincome tax benefit                                               |  |                    | (1,871   | )  |  |   | (6,524  | )  |
| Changesin operating assets andliabilities:                               |  |                    |     |    |  |   |    |    |
| Accountsreceivable                                                       |  |                    | (929     | )  |  |   | 1,310   |    |
| Inventories                                                              |  |                    | (1,773   | )  |  |   | (820    | )  |
| Prepaidexpenses and other currentassets                                  |  |                    | (2,187   | )  |  |   | (702    | )  |
| Due fromrelatedparties                                                   |  |                    | 467      |    |  |   | 2,861   |    |
| Accountspayable                                                          |  |                    | 4,408    |    |  |   | 2,048   |    |
| Accruedliabilities                                                       |  |                    | 1,406    |    |  |   | (3,256  | )  |
| Dueto relatedparties                                                     |  |                    | 581      |    |  |   | 763     |    |
| Other,net                                                                |  |                    | (177     | )  |  |   | 357     |    |
| Netcash provided by operatingactivities                                  |  |                    | 4,071    |    |  |   | 7,688   |    |
| **Investingactivities**                                                  |  |                    |     |    |  |   |    |    |
| Capitalexpenditures                                                      |  |                    | (12,893  | )  |  |   | (13,438 | )  |
| Proceedsfrom dispositions of property andequipment                       |  |                    | 2,462    |    |  |   | 774     |    |
| Other                                                                    |  |                    | —  |    |  |   | 9       |    |
| Netcash used in investingactivities                                      |  |                    | (10,431  | )  |  |   | (12,655 | )  |
| **Financingactivities**                                                  |  |                    |     |    |  |   |    |    |
| Borrowings underAmended CreditAgreement                                  |  |                    | 135,600  |    |  |   | — |    |
| Proceedsfrom issuance of SeniorNotes                                     |  |                    | 100,000  |    |  |   | — |    |
| Repayments oflong-termdebt                                               |  |                    | (254,172 | )  |  |   | (10,130 | )  |
| Deferredfinancingcosts                                                   |  |                    | (938     | )  |  |   | (3,155  | )  |
| Proceeds fromissuance of Series B Preferred Stock*                       |  |                    | —  |    |  |   | 4,372   |    |
| Proceeds fromissuance of Series C Preferred Stock*                       |  |                    | —  |    |  |   | 9,800   |    |
| Capital contribution*                                                    |  |                    | 22,730   |    |  |   | — |    |
| Borrowings undernotes payable toaffiliate                                |  |                    | 4,500    |    |  |   | — |    |
| Netcash provided by financingactivities                                  |  |                    | 7,720    |    |  |   | 887     |    |
| Effect ofexchange rate changes oncash                                    |  |                    | 154      |    |  |   | 354     |    |
| Netincrease (decrease) in cash and cashequivalents                       |  |                    | 1,514    |    |  |   | (3,726  | )  |
| Cash andcash equivalents at beginning ofperiod                           |  |                    | 9,079    |    |  |   | 12,647  |    |
| Cashand cash equivalents at end ofperiod                                 |  | $                       | 10,593   |    |  | $      | 8,921   |    |
|                                                                          |

|   |                         |
|---|-------------------------|
| * | netof transaction costs |

See accompanyingnotes.

6

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PANAVISION INC.

CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) (Inthousands)

|                                       |  |                         |        |        |  |        |        |        |  |  |
|---------------------------------------|--|-------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                  |  | SixMonths Ended June30, |
|                                  |  | 2004                    |        | 2003   |
| **Supplementalcash flow information** |  |                    |   |   |  |   |   |   |
| Interestpaid during theperiod         |  | $                       | 14,882 |   |  | $      | 15,639 |   |
| Incometaxes paid during theperiod     |  | $                       | 1,036  |   |  | $      | 1,562  |   |
|                                       |

Supplementalnon-cash financing activities

As described in Note 4 of theNotes to Condensed Consolidated Financial Statements, in January, 2004the Company issued to PX Holding Corporation ("PXHolding") 1,381,690 shares of new Series E Non-CumulativePerpetual Participating Preferred Stock ("Series EPreferred Stock") in exchange for 1,381,690 shares ofSeries A Non-Cumulative Perpetual Participating Preferred Stock("Series A Preferred Stock"), whichconstituted all of the outstanding Series A Preferred Stock.

Asdescribed in Note 4 of the Notes to Condensed Consolidated FinancialStatements, in January, 2004 the Company issued to PX Holding 215,274shares of new Series D Cumulative Pay-in-Kind Preferred Stock("Series D Preferred Stock") in exchange for,among other consideration, 159,644 shares of Series C CumulativePay-in-Kind Preferred Stock ("Series C PreferredStock") held by PX Holding, which constituted all of theoutstanding Series C Preferred Stock. The other consideration includedthe contribution or retirement of various related party notes and MafcoHoldings Inc.'s one-third interest in the common stock of PANYRental, Inc. Total book value, which approximates fair value, of thenon-cash consideration was approximately $19.0 million.

Inconnection with a May, 2004 sale of certain property and equipment, theCompany received, in addition to cash proceeds, promissory notestotaling approximately $1.5 million.

During the six months endedJune 30, 2004, the Company acquired rental equipment by entering intocapital leases totaling approximately $2.4 million.

On March 27,2003, Mafco Holdings Inc. contributed $90.9 million principal amount of9 5/8% Senior Subordinated Discount Notes Due2006 (the "9 5/8%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 BCumulative Pay-in-Kind Preferred Stock ("the Series BPreferred Stock") in exchange for 57,424 shares of SeriesC Preferred Stock. As a result of this transaction, all of theoutstanding Series B Preferred Stock was transferred to the Company. Inconnection with the contribution of the 9 5/8%Notes by the majority shareholder, deferred tax assets associated withthese 9 5/8% Notes of $18.0 million were chargedagainst additional paid-in capital.

For the six months endedJune 30, 2003, the Company recorded an accreted dividend of $1.3million on the Series B Preferred Stock.

See accompanyingnotes.

7

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

1.    Basis ofPreparation

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 theCompany's 2003 Annual Report on Form 10-K/A, on April 19, 2001,M&F Worldwide Corp. ("M&F Worldwide")purchased from PX Holding, a wholly owned subsidiary of Mafco Holdings,all 7,320,225 shares (the "Purchased Shares")of the Company's Common Stock held by PX Holding (the"M&F Purchase"). The Purchased Sharesconstituted approximately 83.5% of the Company's thenoutstanding Common Stock. As a result of the purchase, Mafco Holdingsincreased its indirect interest in M&F Worldwide to a majorityposition.

During 2001, certain shareholders of M&FWorldwide brought lawsuits against M&F Worldwide and its directorschallenging the M&F Purchase as an alleged breach of fiduciary dutyand sought, among other things, rescission of the M&F Purchasetransaction. One of the shareholders dismissed his lawsuit pursuant toa settlement. On December 3, 2002, the remaining parties to thelitigation consummated a settlement of the litigation (the"M&F Settlement"), whereby Mafco Holdingsacquired, through PX Holding, (1) the shares of the Company'sCommon Stock that M&F Worldwide had purchased in April 2001, (2)the shares of the Company's Series A Non-Cumulative PerpetualParticipating Preferred Stock, par value $0.01, (the"Series A Preferred Stock") that M&FWorldwide acquired in December 2001, (3) the9 5/8% Notes that a subsidiary of M&FWorldwide acquired in November 2001, and (4) the Las Palmas Note in theamount of $6.7 million that the Company issued to M&F Worldwide onits acquisition of the shares of Las Palmas (the "LasPalmas Note") (see Note 14 of the Company's 2003Annual Report on Form 10-K/A). In addition, all agreements whichM&F Worldwide entered into in connection with the M&F Purchaseand the December 2001 issuance of the Series A Preferred Stock wereterminated.

Thus, after the consummation of the M&FSettlement, the Company ceased being a subsidiary of M&F Worldwide.Mafco Holdings, after giving effect to the M&F Settlement,indirectly controls 85.7% of the voting shares of the Company.The M&F Settlement did not have a significant impact on therecorded values of the Company's assets or liabilities since thetransaction was between parties under common control.

The accompanying condensed consolidated financial statementshave been prepared in accordance with United States generally acceptedaccounting principles for interim financial information and with theinstructions for Form 10-Q and Rule 10-01 of Regulation S-X.Accordingly, they do not include all of the information and footnotesrequired by United States generally accepted accounting principles forcomplete financial statements. In the opinion of management, alladjustments (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, 2003has been derived from the audited financial statements at that date butdoes not include all the information and footnotes required by UnitedStates generally accepted accounting principles for complete financialstatements.

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

Certain amounts in previouslyissued financial statements have been reclassified to conform to the2004 presentation.

8

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

2.    Use of Estimates andAssumptions

The preparation of financial statements inconformity with United States generally accepted accounting principlesrequires management to make estimates and assumptions that affect theamounts reported in the financial statements and accompanying notes,including the collectibility of receivables and the realizability ofassets such as fixed assets and deferred taxes. Actual results coulddiffer from such estimates.

3.    Inventories

Inventories consist of the following (inthousands):

|                          |  |              |        |                   |  |        |        |        |  |  |
|--------------------------|--|--------------|--------|-------------------|--|--------|--------|--------|--|--|
|                     |  | June30, 2004 |        | December 31, 2003 |
| Finishedgoods            |  | $            | 3,339  |              |  | $      | 2,601  |   |
| Work-in-process          |  |         | 296    |              |  |   | 302    |   |
| Componentparts           |  |         | 4,314  |              |  |   | 2,048  |   |
| Spare parts andsupplies  |  |         | 1,200  |              |  |   | 1,539  |   |
| Goods purchasedforresale |  |         | 4,555  |              |  |   | 5,441  |   |
|                     |  | $            | 13,704 |              |  | $      | 11,931 |   |
|                          |

4.    Long-TermDebt

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

|                                                  |  |              |         |                   |  |        |         |        |  |  |
|--------------------------------------------------|--|--------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                             |  | June30, 2004 |         | December 31, 2003 |
| Amended andRestated CreditAgreement              |  | $            | 133,100 |              |  | $      | — |   |
| 12.50%Senior Notes Due2009                       |  |         | 100,275 |              |  |   | — |   |
| PriorCredit Agreement:                           |  |
| Revolving Facility                               |  |         | — |              |  |   | 99,200  |   |
| TermFacility                                     |  |         | — |              |  |   | 151,792 |   |
| 9 5/8%Senior Subordinated Discount Notes Due2006 |  |         | 65,218  |              |  |   | 65,353  |   |
| Notes payable toaffiliate                        |  |         | 7,889   |              |  |   | 21,401  |   |
| Other(including capital leaseobligations)        |  |         | 3,866   |              |  |   | 1,928   |   |
|                                             |  |         | 310,348 |              |  |   | 339,674 |   |
| Less:Currentmaturities                           |  |         | 7,668   |              |  |   | 5,885   |   |
| TotalLong-TermDebt                               |  | $            | 302,680 |              |  | $      | 333,789 |   |
|                                                  |

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

On August 13, 2003, MacAndrews & Forbes agreed to amend anexisting line of credit provided to the Company to increase the amountavailable for borrowing from $4.0 million to $10.0 million and extendthe 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) 

9

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt  (Continued)

amounts outstanding under the MacAndrews Linewere retired in exchange for shares of new Series D CumulativePay-in-Kind Preferred Stock, par value $0.01 per share (the"Series D Preferred Stock") and (ii)MacAndrews & Forbes increased the amount of the Second MacAndrewsLine to $20.0 million and extended the maturity to April 16, 2009. Asof June 30, 2004, the Company had drawn approximately $7.9 millionagainst the Second MacAndrews line.

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 Series D Preferred Stock in exchange for (a) 159,644shares of Series C Cumulative Pay-in-kind Preferred Stock, par value$0.01 per share (the "Series C PreferredStock"), of the Company, held by PX Holding (together withapproximately $13.2 million of accumulated dividends thereon); (b)$23.0 million in cash; (c) the retirement of all principal and interest(an aggregate of $10,180,930) owed as of January 16, 2004 under theMacAndrews Line; (d) 33.3 shares of common stock of PANY Rental, Inc.("PANY Rental"), having a fair market valueof $0.7 million (such that, as of January 16, 2004, the Company owned100% of the 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 Company also issued to PX Holding1,381,690 shares of new Series E Non-Cumulative Perpetual ParticipatingPreferred Stock, par value $0.01 per share, (the "Series EPreferred Stock") in exchange for 1,381,690 shares ofSeries A Non-Cumulative Perpetual Participating Preferred Stock, parvalue $0.01 per share (the "Series A PreferredStock"). As a result of the January 2004 Refinancingtransactions, all of the outstanding shares of Series A and Series CPreferred Stock were transferred to the Company and a Certificate ofElimination was filed for each series. In addition, MacAndrews &Forbes increased the amount of the Second MacAndrews Line to $20.0million and extended the maturity to April 16, 2009.

10

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

4.    Long-TermDebt  (Continued)

The Company used proceeds from the sale ofthe Senior Notes and the issuance of Series D Preferred Stock to reducethe indebtedness under the Prior Credit Agreement by $115.4 million,and replaced the Prior Credit Agreement with an Amended and RestatedCredit Agreement (the "Amended CreditAgreement") with the lenders under the Prior CreditAgreement. The Amended Credit Agreement provides for a single term loanfacility in the principal amount of $135.6 million repayable inquarterly installments with a final maturity of January 12, 2007,except that the term facility shall be due on September 5, 2005 if anyof the 9 5/8% Notes remain outstanding on thatdate. The term facility bears interest at either the ABR or EurodollarRate (as defined in the Amended Credit Agreement) plus a margin of5.25% in the case of ABR loans or 6.25% in the case ofEurodollar Loans. The term facility under the Amended Credit Agreementis secured on substantially the same basis as indebtedness under thePrior 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 during 2004in payments of $1.25 million due at the end of each quarter, whereasunder the Prior Credit Agreement the Company would have been requiredto make principal payments of approximately $221.1 million in 2004. Inaddition, the Amended Credit Agreement revised certain financial testsand other restrictive covenants set forth in the Prior CreditAgreement, including required EBITDA (as defined), limitations onindebtedness, 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 June 30, 2004, $133.1 million was outstandingunder the Amended Credit Agreement.

As a result of therefinancing, in accordance with Statement of Financial AccountingStandards ("SFAS") No. 6,"Classification of Short-Term Obligations Expected to beRefinanced" ("SFAS 6"), theCompany reclassified $246.0 million of the refinanced debt to long-termdebt as of December 31, 2003.

5.    PreferredStock Transactions

In connection with a March 2003 amendment tothe Prior Credit Agreement, all the Series B Preferred Stock wascontributed back to the Company and 102,220 shares of Series CPreferred Stock were issued. The Series C Preferred Stock wasnon-voting; had a liquidation preference of $1,000 per share plusaccrued and unpaid dividends; and entitled the holder to cumulativedividends at a rate of 10% per annum regardless of whetherdeclared or earned. In addition, the Series C Preferred Stock wassubject 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 share plus accrued and unpaid dividends, and has the samedividend rights as the Series A Preferred Stock, described below.

The Series A Preferred Stock was voting and was entitled tonon-cumulative dividends at a rate of $0.05 per share per annumpayable, if declared, quarterly on each March 31, June 30, September 30

11

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

5.    PreferredStock Transactions  (Continued)

and December 31. In addition, the Series APreferred Stock had also participated pro rata on a share-for-sharebasis with the common stock, par value $0.01 per share, of the Company("Common Stock") with respect to anydividends declared or paid on the Common Stock.

As a result ofthe January 2004 Refinancing transactions, all of the outstandingshares of Series A and Series C Preferred Stock were transferred to theCompany.

6.    New Accounting Pronouncements

InJanuary 2003, the Financial Accounting Standards Board("FASB") issued Interpretation No. 46("FIN 46"), "Consolidation ofVariable Interest Entities." FIN 46 requires an investorwith a majority of the 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.    Segment Information

The Company has two reportable segments: the rental of camerasystems, lighting systems and other equipment, and the sales of relatedproducts (Rental and Sales); and the high-resolution scanning of film,digital color timing, laser film recording of digital video and highdefinition images to film, and digital mastering services (PostProduction). The Company's activities are conducted throughowned-and-operated facilities and the Company's network ofindependent agents in a number of geographic locations, principally theUnited States and the United Kingdom.

The following tablepresents revenue and other financial information for the Company bysegment (inthousands):

|                                |  |                                |        |                               |  |        |        |                 |  |                |        |         |  |        |        |        |  |        |        |         |  |        |        |         |  |  |
|--------------------------------|--|--------------------------------|--------|-------------------------------|--|--------|--------|-----------------|--|----------------|--------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--------|--------|---------|--|--|
|                           |  | ThreeMonths EndedJune 30, 2004 |        | Three MonthsEndedJune 30,2003 |
|                           |  | Rental andSales                |        | Post Production               |  | Total  |        | Rental andSales |  | PostProduction |        | Total   |
| Revenue from externalcustomers |  | $                              | 46,979 |                          |  | $      | 6,980  |            |  | $              | 53,959 |    |  | $      | 44,125 |   |  | $      | 4,309  |    |  | $      | 48,434 |    |
| Segmentoperating income(loss)  |  | $                              | (1,203 | )                        |  | $      | 1,030  |            |  | $              | (173   | )  |  | $      | 1,492  |   |  | $      | (446   | )  |  | $      | 1,046  |    |
| Corporateandother              |  |                           |   |                          |  |   |   |            |  |           | (892   | )  |  |   |   |   |  |   |   |    |  |   | (1,049 | )  |
| Operatingincome(loss)          |  |                           |   |                          |  |   |   |            |  | $              | (1,065 | )  |  |   |   |   |  |   |   |    |  | $      | (3     | )  |
|                                |

12

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

7.    Segment Information  (Continued)

|                                |  |                              |        |                              |  |        |        |                 |  |                |         |         |  |        |        |        |  |        |        |         |  |        |        |         |  |  |
|--------------------------------|--|------------------------------|--------|------------------------------|--|--------|--------|-----------------|--|----------------|---------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--------|--------|---------|--|--|
|                           |  | SixMonths EndedJune 30, 2004 |        | Six Months EndedJune30, 2003 |
|                           |  | RentalandSales               |        | Post Production              |  | Total  |        | Rental andSales |  | PostProduction |         | Total   |
| Revenue from externalcustomers |  | $                            | 96,029 |                         |  | $      | 12,852 |            |  | $              | 108,881 |    |  | $      | 88,113 |   |  | $      | 6,620  |    |  | $      | 94,733 |    |
| Segmentoperating income(loss)  |  | $                            | 1,404  |                         |  | $      | 1,300  |            |  | $              | 2,704   |    |  | $      | 5,906  |   |  | $      | (1,999 | )  |  | $      | 3,907  |    |
| Corporateandother              |  |                         |   |                         |  |   |   |            |  |           | (2,208  | )  |  |   |   |   |  |   |   |    |  |   | (5,463 | )  |
| Operatingincome(loss)          |  |                         |   |                         |  |   |   |            |  | $              | 496     |    |  |   |   |   |  |   |   |    |  | $      | (1,556 | )  |
|                                |

|                   |  |                 |         |                  |  |        |        |                 |  |                |         |        |  |        |         |        |  |        |        |        |  |        |         |        |  |  |
|-------------------|--|-----------------|---------|------------------|--|--------|--------|-----------------|--|----------------|---------|--------|--|--------|---------|--------|--|--------|--------|--------|--|--------|---------|--------|--|--|
|              |  | June30, 2004    |         | December 31,2003 |
|              |  | Rental andSales |         | Post Production  |  | Total  |        | Rental andSales |  | PostProduction |         | Total  |
| Segmentassets     |  | $               | 264,517 |             |  | $      | 25,180 |            |  | $              | 289,697 |   |  | $      | 269,832 |   |  | $      | 21,865 |   |  | $      | 291,697 |   |
| Corporateandother |  |            |    |             |  |   |   |            |  |           | 324,717 |   |  |   |    |   |  |   |   |   |  |   | 330,225 |   |
| Totalassets       |  |            |    |             |  |   |   |            |  | $              | 614,414 |   |  |   |    |   |  |   |   |   |  | $      | 621,922 |   |
|                   |

8.    ComprehensiveIncome (Loss)

Components of accumulated other comprehensiveincome (loss) are as follows (inthousands):

|                                       |  |                           |        |                         |  |        |        |         |  |        |         |         |  |        |         |         |  |  |
|---------------------------------------|--|---------------------------|--------|-------------------------|--|--------|--------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                  |  | ThreeMonthsEnded June 30, |        | Six MonthsEnded June30, |
|                                  |  | 2004                      |        | 2003                    |  | 2004   |        | 2003    |
| Netloss                               |  | $                         | (7,547 | )                  |  | $      | (3,682 | )  |  | $      | (21,514 | )  |  | $      | (11,036 | )  |
| Foreigncurrency translationadjustment |  |                      | (2,076 | )                  |  |   | 3,912  |    |  |   | (2,441  | )  |  |   | 5,651   |    |
| Totalcomprehensive income(loss)       |  | $                         | (9,623 | )                  |  | $      | 230    |    |  | $      | (23,955 | )  |  | $      | (5,385  | )  |
|                                       |

9.    NetLoss Per Share

For the three-month and six-month periods endedJune 30, 2004 and 2003, the basic and diluted per share data is basedon the weighted-average number of common shares and dilutive potentialcommon shares outstanding during the period. Potential common shares,consisting of outstanding stock options and warrants, are not includedin the diluted loss per share calculation since they areantidilutive.

13

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

9.    NetLoss Per Share  (Continued)

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

|                                                                                                  |  |                            |         |                          |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------------|--|----------------------------|---------|--------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                                             |  | ThreeMonths Ended June 30, |         | Six Months Ended June30, |
|                                                                                             |  | 2004                       |         | 2003                     |  | 2004   |         | 2003    |
| Numerator:                                                                                       |  |                       |    |                     |  |   |    |    |  |   |    |    |  |   |    |    |
| Netloss                                                                                          |  | $                          | (7,547  | )                   |  | $      | (3,682  | )  |  | $      | (21,514 | )  |  | $      | (11,036 | )  |
| Accreteddividends on Redeemable Series B PreferredStock                                          |  |                       | — |                     |  |   | — |    |  |   | — |    |  |   | (1,319  | )  |
| SeriesC Preferred Stock accumulateddividend                                                      |  |                       | — |                     |  |   | (4,001  | )  |  |   | (765    | )  |  |   | (4,173  | )  |
| SeriesD Preferred Stock accumulated dividend                                                     |  |                       | (5,494  | )                   |  |   | — |    |  |   | (9,979  | )  |  |   | — |    |
| Numeratorfor basic and diluted loss per share – net loss attributable tocommonstockholders |  | $                          | (13,041 | )                   |  | $      | (7,683  | )  |  | $      | (32,258 | )  |  | $      | (16,528 | )  |
|                                                                                                  |

|                                                                                |  |                            |         |                          |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------------------------------------------|--|----------------------------|---------|--------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                                           |  | ThreeMonths Ended June 30, |         | Six Months Ended June30, |
|                                                                           |  | 2004                       |         | 2003                     |  | 2004   |         | 2003    |
| Denominator:                                                                   |  |                       |    |                     |  |   |    |    |  |   |    |    |  |   |    |    |
| Denominatorfor basic loss per share – weighted averageshares             |  |                       | 8,770   |                     |  |   | 8,770   |    |  |   | 8,770   |    |  |   | 8,770   |    |
| Effectof dilutive securities – stock options andwarrants                 |  |                       | — |                     |  |   | — |    |  |   | — |    |  |   | — |    |
| Denominatorfor diluted loss per share – adjusted weighted average shares |  |                       | 8,770   |                     |  |   | 8,770   |    |  |   | 8,770   |    |  |   | 8,770   |    |
| Basicloss pershare                                                             |  | $                          | (1.49   | )                   |  | $      | (0.87   | )  |  | $      | (3.68   | )  |  | $      | (1.88   | )  |
| Dilutedloss pershare                                                           |  | $                          | (1.49   | )                   |  | $      | (0.87   | )  |  | $      | (3.68   | )  |  | $      | (1.88   | )  |
|                                                                                |

10.    OtherIncome (Expense), Net

The components of Other income (expense),net for the three-month and six-month periods ended June 30, 2004 and2003 are as follows (inthousands):

|                                           |  |                                   |         |                                 |  |        |      |         |  |        |         |         |  |        |       |         |  |  |
|-------------------------------------------|--|-----------------------------------|---------|---------------------------------|--|--------|------|---------|--|--------|---------|---------|--|--------|-------|---------|--|--|
|                                      |  | Forthe Three MonthsEnded June 30, |         | For the SixMonths Ended June30, |
|                                      |  | 2004                              |         | 2003                            |  | 2004   |      | 2003    |
| Netgain on sales of property andequipment |  | $                                 | 1,683   |                            |  | $      | 188  |    |  | $      | 1,824   |    |  | $      | 240   |    |
| Minorityinterest income(expense)          |  |                              | (209    | )                          |  |   | 169  |    |  |   | (248    | )  |  |   | 479   |    |
| Lossof equityaffiliates                   |  |                              | (80     | )                          |  |   | (203 | )  |  |   | (102    | )  |  |   | (190  | )  |
| Insurancesettlement                       |  |                              | — |                            |  |   | 724  |    |  |   | — |    |  |   | 724   |    |
| Other                                     |  |                              | 47      |                            |  |   | (82  | )  |  |   | 3       |    |  |   | (151  | )  |
| TotalOther income (expense),net           |  | $                                 | 1,441   |                            |  | $      | 796  |    |  | $      | 1,477   |    |  | $      | 1,102 |    |
|                                           |

14

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PANAVISIONINC.

NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

11.    Stock-BasedBenefits

The Company follows the provisions of SFAS No. 123,"Accounting for Stock-Based Compensation"("SFAS 123"), which permits the Company tocontinue to follow the intrinsic value method set forth in AccountingPrinciples Board Opinion No. 25, "Accounting for StockIssued to Employees" ("APB 25"),but disclose the pro forma effects on net income (loss) had the fairvalue of the options been expensed.

In December 2002, the FASBissued SFAS No. 148, "Accounting for Stock-BasedCompensation-Transition and Disclosure"("SFAS 148"), which amends SFAS 123. SFAS 148provides alternative methods of transition for a voluntary change tothe fair value based method of accounting for stock-based employeecompensation. In addition, SFAS 148 amends the disclosure requirementsof SFAS 123 to require more prominent and more frequent disclosures infinancial statements about the effects of stock-based compensation. TheCompany has complied with the disclosure requirements of SFAS 148.

Had the Company applied the fair value recognition provision of FASBNo. 123 to stock-based employee compensation, there would have been noeffect on reported net loss or net loss per share for the three-monthand six- month periods ended June 30, 2004 and2003.

12.    Acquisition of Minority Interestin PANY Rental, Inc.

On May 30, 2003, the Company purchased anadditional 1/3 interest in PANY Rental for a combined purchase price of$333,000, increasing the Company's ownership interest from a 1/3interest to a 2/3 interest. As a result of this increased ownershipinterest, the Company consolidated the financial position and resultsof operations of PANY Rental in the accompanying consolidated financialstatements, the effects of which were immaterial. In addition, on May30, 2003, PX Holding purchased the remaining 1/3 interest in PANYRental for a purchase price of $700,000 and purchased a promissory notepayable by PANY Rental with a principal amount plus accrued interest ofapproximately $700,000. The purchase price for this promissory noteplus accrued interest was approximately $700,000.

As discussedin Note 4 to the Condensed Consolidated Financial Statements, as partof the January 2004 Refinancing, the Company issued to PX Holding215,274 shares of Series D Preferred Stock in exchange for, among otheritems, the remaining 1/3 interest in PANY Rental. As a result, as ofJanuary 16, 2004, the Company owned 100% of the outstandingshares of PANY Rental.

PANY Rental holds an exclusive license torent the Company's camera systems in the New York market and alicense to use the Panavision trademark in connection with the rentalof camera systems and related equipment to customers.

13.    Recent Developments

On August 6,2004, the Company sold its 80% interest in EFILM, LLC,("EFILM') to Deluxe Laboratories, Inc.("Deluxe"), the holder of the remaining20% interest in EFILM, for total consideration of $32.5 million,including $27.5 million in cash and a promissory note for $5 million(the "EFILM Sale"). The Company estimates itwill recognize a gain on the sale in the range of $15 million.

The EFILM Sale will result in the elimination of EFILM'sEBITDA from the EBITDA counted for the purposes of the minimum EBITDAand other financial covenants under the Amended Credit Agreement and2004 Indenture. Although there can be no assurance, the Companyanticipates that additional EBITDA resulting from the reinvestment ofthe proceeds from the EFILM Sale during the 

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NOTES TO CONDENSED CONSOLIDATED FINANCIALSTATEMENTS(Unaudited)

13.    Recent Developments  (Continued)

3rd Quarter of 2004, as permittedunder the Company's Amended Credit Agreement and the 2004Indenture, should enable the Company to remain in compliance with itsminimum EBITDA and other financial covenants. In the absence of suchreinvestment, however, it is possible that the Company may not be incompliance with the financial covenants for the four-quarter periodending September 30, 2004 as a result of the EFILM EBITDA eliminationand potential lower-than-expected motion picture industry activity. Inthe event that the Company is unable to meet its required covenants forthe period ending September 30, 2004, the Company would be required toseek waivers or amendments of such covenants in the Amended CreditAgreement and 2004 Indenture. Although the lenders under the AmendedCredit Agreement and 2004 Indenture have accommodated the Company todate and the Company believes that the lenders will continue to do so,there can be no assurance that they will continue to do so nor canthere be any assurance that the Company could successfully effect anyalternate financing to replace the Amended Credit Agreement or otherdebt if repayment is accelerated

Principally to provide amechanism for the reinvestment of the proceeds of the EFILM Sale, onAugust 11, 2004, the Company and the other parties to the AmendedCredit Agreement entered into an amendment and waiver to the AmendedCredit Agreement ("First Amendment andWaiver"). Such reinvestment includes the Company'srecent acquisition of Technovision France, a supplier of camera systemsto the motion picture, television and television commercials markets inFrance. To provide a similar mechanism for the reinvestment of theproceeds of the EFILM Sale under the 2004 Indenture, on August 11,2004, the Company and Wilmington Trust Company, as Trustee, enteredinto a supplemental indenture ("SupplementalIndenture").

Revenue and income (loss) beforeincome taxes of EFILM for the three-month and six-month periods endingJune 30, 2004 and 2003 were as follows (inthousands):

|                                 |  |                                    |       |                                 |  |      |       |         |  |   |        |        |  |   |        |         |  |  |
|---------------------------------|--|------------------------------------|-------|---------------------------------|--|------|-------|---------|--|---|--------|--------|--|---|--------|---------|--|--|
|                            |  | Forthe Three Months Ended June 30, |       | For the SixMonths Ended June30, |
|                            |  | 2004                               |       | 2003                            |  | 2004 |       | 2003    |
| Revenue                         |  | $                                  | 6,980 |                            |  | $    | 4,309 |    |  | $ | 12,852 |   |  | $ | 6,620  |    |
| Income(loss) before incometaxes |  | $                                  | 1,048 |                            |  | $    | (523  | )  |  | $ | 1,331  |   |  | $ | (2,071 | )  |
|                                 |

Majorcategories of assets and liabilities of EFILM as of June 30, 2004 andDecember 31, 2003 were as follows (inthousands):

|                                   |  |              |        |                  |  |        |        |         |  |  |  |  |  |  |
|-----------------------------------|--|--------------|--------|------------------|--|--------|--------|---------|--|--|--|--|--|--|
|                              |  | June30, 2004 |        | December 31,2003 |  |
|                              |  | (Unaudited)  |        |
| Currentassets                     |  | $            | 9,315  |             |  | $      | 5,743  |    |  |
| Fixedassets                       |  |         | 9,727  |             |  |   | 10,451 |    |  |
| Otherassets                       |  |         | 41     |             |  |   | 33     |    |  |
| Due to affiliate– shortterm |  |         | (2,187 | )           |  |   | (1,453 | )  |  |
| Other currentliabilities          |  |         | (2,388 | )           |  |   | (1,997 | )  |  |
| Notespayable toaffiliate          |  |         | (3,708 | )           |  |   | (3,608 | )  |  |
| Due toaffiliate – longterm  |  |         | (1,389 | )           |  |   | (1,326 | )  |  |
| Members'Equity                    |  | $            | 9,411  |             |  | $      | 7,843  |    |  |
|                                   |

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

**Overview**

The Company's revenueis derived from three sources: (i) camera rental operations, (ii)lighting rental operations, and (iii) sales and other revenue. Revenuefrom camera 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 and Australia. Revenue generated by Lee Lighting, theCompany's lighting rental facility located in the United Kingdom,generates the majority of the Company's lighting rentaloperations revenue.

Sales and other revenue is comprised of: (i)the manufacture and sale of lighting filters through Lee Filters in theUnited Kingdom and the United States; (ii) operations of EFILM, LLC,("EFILM"), which provides high-resolutionscanning of film, digital color timing, laser film recording of digitalvideo and high definition images to film, and digital masteringservices to the motion picture and television industries, and (iii)sales of various consumable products, such as film stock, light bulbsand gaffer tape, which are used in all types of productions. In August,2004 the Company sold its interest in EFILM.

The Companyconsiders revenue from international business to be that revenue whichis generated from the rental of its equipment by productions that arelocated at production sites outside of the United States.

Thissection should be read in conjunction with the Consolidated FinancialStatements and accompanying Notes included in the Company'sAnnual Report on Form 10-K/A for the year ended December 31, 2003 andthe Critical Accounting Policies as disclosed under Item 7 in theCompany's Annual Report on Form 10-K/A for the year endedDecember 31, 2003.

Results of Operations

The followingdiscussion and analysis includes the Company's consolidatedresults of operations for 2004 as compared to 2003.

QuarterEnded June 30, 2004 Compared to Quarter Ended June 30, 2003

Camera RentalOperations

|                |  |                            |        |                    |  |        |        |         |  |        |        |         |  |        |        |          |  |  |
|----------------|--|----------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|----------|--|--|
| (inthousands)  |  | Three Months EndedJune 30, |        | Increase(Decrease) |
|           |  | 2004                       |        | 2003               |  |   |        | %       |
| Rentalrevenue  |  | $                          | 26,755 |               |  | $      | 26,098 |    |  | $      | 657    |    |  |   | 2.5    | %   |
| Costof rentals |  |                       | 16,125 |               |  |   | 15,441 |    |  |   | 684    |    |  |   | 4.4    | %   |
| Grossmargin    |  | $                          | 10,630 |               |  | $      | 10,657 |    |  | $      | (27    | )  |  |   | (0.3   | %)  |
| Cost%          |  |                       | 60.3   | %             |  |   | 59.2   | %  |  |   |   |    |  |   |   |     |
|                |

Theincrease in camera rental revenue principally reflects a positivetranslation effect of foreign exchange rate changes of approximately $1million and, to a lesser degree, the inclusion of revenue from PANYRental, Inc. ("PANY Rental") as a result ofthe Company's consolidation of PANY Rental's results ofoperations from the date it increased its ownership of PANY Rental to67% in May 2003, partially offset by decreased revenues inEurope and the Asia Pacific region.

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The increase in cost of rentals occurreddue to higher international expenses attributable to foreign exchangerate changes and the inclusion of expenses from PANY Rental as a resultof the Company's consolidation of PANY Rental's results ofoperations, as well as higher personnel and other costs to enhancecustomer service consistent with the Company's strategy. Theincreases were partially offset by decreased commissions paid to theCompany's third party agents due to decreased revenues from theseagents.

Lighting RentalOperations

|                |  |                            |        |                    |  |        |       |         |  |        |        |        |  |        |        |         |  |  |
|----------------|--|----------------------------|--------|--------------------|--|--------|-------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands)  |  | Three Months EndedJune 30, |        | Increase(Decrease) |
|           |  | 2004                       |        | 2003               |  |   |       | %       |
| Rentalrevenue  |  | $                          | 10,955 |               |  | $      | 9,470 |    |  | $      | 1,485  |   |  |   | 15.7   | %  |
| Costof rentals |  |                       | 9,837  |               |  |   | 8,685 |    |  |   | 1,152  |   |  |   | 13.3   | %  |
| Grossmargin    |  | $                          | 1,118  |               |  | $      | 785   |    |  | $      | 333    |   |  |   | 42.4   | %  |
| Cost%          |  |                       | 89.8   | %             |  |   | 91.7  | %  |  |   |   |   |  |   |   |    |
|                |

Theprimary factor causing the increase in lighting rental revenue was anincrease in lighting rental revenues of $1.7 million from PANY Rentalas a result of the Company's consolidation of PANY Rental'sresults of operations since June 1, 2003, and the positive effect offoreign exchange rate changes on revenues from internationaloperations, partially offset by decreased revenues at Lee Lighting inthe United Kingdom. Cost of rentals increased primarily due toincreased expenses of $0.9 million related to consolidation of PANYRental's lighting business and inclusion of the translationeffect of foreign exchange rates, partially offset by decreasedexpenses from Lee Lighting in the United Kingdom. The decreasedexpenses at Lee Lighting relate to the decreased revenues discussedabove.

Sales and Other

|               |  |                            |        |                    |  |        |        |         |  |        |        |        |  |        |        |         |  |  |
|---------------|--|----------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands) |  | Three Months EndedJune 30, |        | Increase(Decrease) |
|          |  | 2004                       |        | 2003               |  |   |        | %       |
| Sales         |  | $                          | 16,249 |               |  | $      | 12,866 |    |  | $      | 3,383  |   |  |   | 26.3   | %  |
| Costof sales  |  |                       | 8,563  |               |  |   | 7,265  |    |  |   | 1,298  |   |  |   | 17.9   | %  |
| Grossmargin   |  | $                          | 7,686  |               |  | $      | 5,601  |    |  | $      | 2,085  |   |  |   | 37.2   | %  |
| Cost%         |  |                       | 52.7   | %             |  |   | 56.5   | %  |  |   |   |   |  |   |   |    |
|               |

Theincrease in sales and other was primarily due to continued growth inEFILM revenue of $2.7 million. The balance of the change was primarilydue to international operations, principally attributable to thepositive effect of foreign exchange rate changes on revenues. Costsincreased $0.8 million due to the continued growth in revenue at EFILM,with the remaining increase due to higher translated expensesassociated with the higher international revenues.

OperatingCosts

|                                   |  |                            |        |                    |  |        |        |        |  |        |       |        |  |        |      |         |  |  |
|-----------------------------------|--|----------------------------|--------|--------------------|--|--------|--------|--------|--|--------|-------|--------|--|--------|------|---------|--|--|
| (inthousands)                     |  | Three Months EndedJune 30, |        | Increase(Decrease) |
|                              |  | 2004                       |        | 2003               |  |   |        | %      |
| Selling,general andadministrative |  | $                          | 19,039 |               |  | $      | 15,716 |   |  | $      | 3,323 |   |  |   | 21.1 | %  |
| Researchanddevelopment            |  |                       | 1,460  |               |  |   | 1,330  |   |  |   | 130   |   |  |   | 9.8  | %  |
|                                   |

Selling,general and administrative expenses("SG&A") increased due to additionalexpenses at PANY of $0.8 million as a result of the Company'sconsolidation of PANY results since June  1, 2003; increasedexpenses at EFILM of $0.4 million related to increased activity;increased expenses of $1.1 

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million due to higher infrastructure costs,principally personnel related in support of future growth initiatives;and increases attributable to foreign exchange rate changes ofapproximately $0.8 million, consistent with the increase ininternational revenues as discussed earlier. Research and developmentexpenses increased because of the Company's strategy to expandnew product development efforts.

Interest, Taxes andOther

|                               |  |                            |        |                        |  |        |        |         |  |        |        |         |  |        |        |          |  |  |
|-------------------------------|--|----------------------------|--------|------------------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|----------|--|--|
| (inthousands)                 |  | Three Months EndedJune 30, |        | Favorable(Unfavorable) |
|                          |  | 2004                       |        | 2003                   |  |   |        | %       |
| Interestexpense               |  | $                          | (7,907 | )                 |  | $      | (7,280 | )  |  | $      | (627   | )  |  |   | (8.6   | )%  |
| Interestincome                |  |                       | 30     |                   |  |   | 67     |    |  |   | (37    | )  |  |   | (55.2  | )%  |
| Foreignexchange gain          |  |                       | 234    |                   |  |   | 211    |    |  |   | 23     |    |  |   | 10.1   | %   |
| Otherincome, net              |  |                       | 1,441  |                   |  |   | 796    |    |  |   | 645    |    |  |   | 81.0   | %   |
| Income tax (provision)benefit |  |                       | (280   | )                 |  |   | 2,527  |    |  |   | (2,807 | )  |  |   | (111.1 | )%  |
|                               |

Theincrease in net interest expense primarily reflects higher effectiveinterest rates in 2004, offset in part by lower debt balances comparedto the prior quarter. The lower debt balances result from the March2003 contribution of $90.9 million principal amount of the9  5/8% Senior SubordinatedDiscount Notes due 2006 ("9 5/8%Notes") owned by Mafco Holdings Inc.("Mafco Holdings") in exchange for equity andthe January 2004 Refinancing (defined below in "Long-TermDebt"), as well as payments of scheduled amortization.

Other income, net increased principally due to a $1.5 million gainon sale on the disposition of property and equipment in May 2004. Theprimary component for the three months ended June 30, 2003 was a $0.7million gain related to an insurance settlement for flood-damagedequipment.

For the quarter ended June 30, 2004, the Companyrecorded a $2.7 million tax benefit associated with domestic taxlosses. In assessing the recoverability of the related increase todeferred tax assets, the Company increased its valuation allowance by$2.0 million, resulting in a net domestic tax benefit of $0.7 million.This was offset by a $1.0 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.

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Six Months Ended June 30, 2004Compared to Six Months Ended June 30, 2003

Camera RentalOperations

|                |  |                          |        |                    |  |        |        |         |  |        |        |         |  |        |        |          |  |  |
|----------------|--|--------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|---------|--|--------|--------|----------|--|--|
| (inthousands)  |  | Six Months EndedJune 30, |        | Increase(Decrease) |
|           |  | 2004                     |        | 2003               |  |   |        | %       |
| Rentalrevenue  |  | $                        | 57,599 |               |  | $      | 55,527 |    |  | $      | 2,072  |    |  |   | 3.7    | %   |
| Costof rentals |  |                     | 32,524 |               |  |   | 30,309 |    |  |   | 2,215  |    |  |   | 7.3    | %   |
| Grossmargin    |  | $                        | 25,075 |               |  | $      | 25,218 |    |  | $      | (143   | )  |  |   | (0.6   | )%  |
| Cost%          |  |                     | 56.5   | %             |  |   | 54.6   | %  |  |   |   |    |  |   |   |     |
|                |

Theincrease in camera rental revenue principally reflects a positivetranslation effect of foreign exchange rate changes of approximately $3million and the inclusion of revenue of $1.0 million from PANY Rentalas a result of the Company's consolidation of PANY Rental'sresults of operations from the date it increased its ownership of PANYRental to 67% in May 2003, partially offset by decreasedrevenues in the U.S. and Asia Pacific region.

The increase incost of rentals occurred due to higher international expensesattributable to foreign exchange rate changes and the inclusion ofexpenses from PANY Rental as a result of the Company'sconsolidation of PANY Rental's results of operations, as well ashigher personnel and other costs to enhance customer service consistentwith the Company's strategy, partially offset by decreasedcommissions paid to the Company's third party agents due todecreased revenues generated from these agents.

Lighting RentalOperations

|                |  |                          |        |                    |  |        |        |         |  |        |        |        |  |        |        |         |  |  |
|----------------|--|--------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands)  |  | Six Months EndedJune 30, |        | Increase(Decrease) |
|           |  | 2004                     |        | 2003               |  |   |        | %       |
| Rentalrevenue  |  | $                        | 19,477 |               |  | $      | 16,264 |    |  | $      | 3,213  |   |  |   | 19.8   | %  |
| Costof rentals |  |                     | 17,981 |               |  |   | 15,515 |    |  |   | 2,466  |   |  |   | 15.9   | %  |
| Grossmargin    |  | $                        | 1,496  |               |  | $      | 749    |    |  | $      | 747    |   |  |   | 99.7   | %  |
| Cost%          |  |                     | 92.3   | %             |  |   | 95.4   | %  |  |   |   |   |  |   |   |    |
|                |

Theprimary factor causing the increase in lighting rental revenue was anincrease in lighting rental revenues of $3.3 million from PANY Rentalas a result of the Company's consolidation of PANY Rental'sresults of operations since June 1, 2003, and the positive effect offoreign exchange rate changes on revenues from internationaloperations, partially offset by decreased revenues at Lee Lighting inthe United Kingdom. Cost of rentals increased primarily due toincreased expenses of $1.9 million related to consolidation of PANYRental's lighting business and inclusion of the translationeffect of foreign exchange rates, partially offset by decreasedexpenses from Lee Lighting. The decreased expenses at Lee Lightingrelate to the decreased revenues discussed above.

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Sales andOther

|               |  |                          |        |                    |  |        |        |         |  |        |        |        |  |        |        |         |  |  |
|---------------|--|--------------------------|--------|--------------------|--|--------|--------|---------|--|--------|--------|--------|--|--------|--------|---------|--|--|
| (inthousands) |  | Six Months EndedJune 30, |        | Increase(Decrease) |
|          |  | 2004                     |        | 2003               |  |   |        | %       |
| Sales         |  | $                        | 31,805 |               |  | $      | 22,942 |    |  | $      | 8,863  |   |  |   | 38.6   | %  |
| Costof sales  |  |                     | 17,139 |               |  |   | 13,485 |    |  |   | 3,654  |   |  |   | 27.1   | %  |
| Grossmargin   |  | $                        | 14,666 |               |  | $      | 9,457  |    |  | $      | 5,209  |   |  |   | 55.1   | %  |
| Cost%         |  |                     | 53.9   | %             |  |   | 58.8   | %  |  |   |   |   |  |   |   |    |
|               |

Theincrease in sales and other was primarily due to continued growth inEFILM revenue of $6.2 million. The balance of the change was primarilydue to international operations, principally attributable to thepositive effect of foreign exchange rate changes on revenues. Costsincreased $2.0 million due to the continued growth in revenue at EFILM,with the remaining increase principally due to higher translatedexpenses associated with the higher international revenues.

Operating Costs

|                                   |  |                          |        |                    |  |        |        |        |  |        |       |        |  |        |      |         |  |  |
|-----------------------------------|--|--------------------------|--------|--------------------|--|--------|--------|--------|--|--------|-------|--------|--|--------|------|---------|--|--|
| (inthousands)                     |  | Six Months EndedJune 30, |        | Increase(Decrease) |
|                              |  | 2004                     |        | 2003               |  |   |        | %      |
| Selling,general andadministrative |  | $                        | 37,821 |               |  | $      | 34,422 |   |  | $      | 3,399 |   |  |   | 9.9  | %  |
| Researchanddevelopment            |  |                     | 2,920  |               |  |   | 2,558  |   |  |   | 362   |   |  |   | 14.2 | %  |
|                                   |

SG&Aexpenses increased due to additional expenses of $1.8 million as resultof the consolidation of PANY's results since June  1, 2003;increased expenses at EFILM of $1.0 million related to increasedactivity; increased expenses due to increased infrastructure costs,principally personnel related in support of future growth initiatives;and increases of approximately $2.0 million attributable to foreignexchange rate changes, consistent with the increase in internationalrevenues as discussed earlier. SG&A for the six months ended June30, 2003 included a $4.0 million accrual for severance costs inconnection with the departure of the Company's former ChiefExecutive Officer and Chief Financial Officer. Research and developmentexpenses increased because of the Company's strategy to expandnew product development efforts.

Interest, Taxes andOther

|                               |  |                          |         |                        |  |        |         |         |  |        |        |         |  |        |         |          |  |  |
|-------------------------------|--|--------------------------|---------|------------------------|--|--------|---------|---------|--|--------|--------|---------|--|--------|---------|----------|--|--|
| (inthousands)                 |  | Six Months EndedJune 30, |         | Favorable(Unfavorable) |
|                          |  | 2004                     |         | 2003                   |  |   |         | %       |
| Interestexpense               |  | $                        | (15,800 | )                 |  | $      | (15,462 | )  |  | $      | 338    |    |  |   | 2.2     | %   |
| Interest income               |  |                     | 48      |                   |  |   | 112     |    |  |   | (64    | )  |  |   | (57.1   | )%  |
| Foreignexchange gain (loss)   |  |                     | 485     |                   |  |   | (752    | )  |  |   | 1,237  |    |  |   | 164.5   | %   |
| Refinancingexpense            |  |                     | (6,470  | )                 |  |   | — |    |  |   | (6,470 | )  |  |   | — |     |
| Otherincome, net              |  |                     | 1,477   |                   |  |   | 1,102   |    |  |   | 375    |    |  |   | 34.0    | %   |
| Income tax (provision)benefit |  |                     | (1,750  | )                 |  |   | 5,520   |    |  |   | (7,270 | )  |  |   | (131.7  | )%  |
|                               |

Theincrease in net interest expense primarily reflects higher effectiveinterest rates in 2004, offset in part by lower debt balances comparedto the prior quarter. The lower debt balances result from the March2003 contribution of $90.9 million principal amount of the9 5/8% Notes owned by Mafco Holdings in exchangefor equity and the January 2004 Refinancing, as well as payments ofscheduled amortization.

Other income, net increased principallydue to a $1.5 million gain on sale on the disposition of property andequipment in May 2004. The primary component for the six months endedJune 30, 2003 was a $0.7 million gain related to an insurancesettlement for flood-damaged equipment.

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For the six months ended June 30, 2004 theCompany recorded a $6.9 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$5.3 million, resulting in a net domestic tax benefit of $1.6 million.This was offset by a $3.4 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 December 3, 2002, the Company will fileseparate federal 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

Six Months Ended June 30,2004

The following table sets forth certain information fromthe Company's condensed consolidated statements of cash flows forthe periodsindicated:

|                                   |  |                        |         |         |  |        |         |         |  |  |
|-----------------------------------|--|------------------------|---------|---------|--|--------|---------|---------|--|--|
| (inthousands)                     |  | Six MonthsEndedJune30, |
|                              |  | 2004                   |         | 2003    |
| **Netcash provided by (usedin):** |  |                   |    |    |  |   |    |    |
| Operatingactivities               |  | $                      | 4,071   |    |  | $      | 7,688   |    |
| Investingactivities               |  |                   | (10,431 | )  |  |   | (12,655 | )  |
| Financingactivities               |  |                   | 7,720   |    |  |   | 887     |    |
|                                   |

Cash providedby operating activities for the six months ended June 30, 2004 totaled$4.1 million, comprising the net loss of $21.5 million, increased byadjustments for depreciation and amortization of $22.3 million,dividends received from an equity investment of $1.1 million, the netchange in operating assets and liabilities of $2.0 million and othermiscellaneous items of $0.2 million. Cash used in investing activitieswas $10.4 million comprising capital expenditures of $12.9 million netof proceeds from dispositions of $2.5 million. The majority of thecapital expenditures were used to manufacture camera rental systems andaccessories.

Cash provided by financing activities was $7.7million, which comprised repayments of $251.0 million under the PriorCredit Agreement, repayments of other long-term debt of $3.2 million,deferred financing costs of $0.9 million, borrowings of $135.6 millionunder 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 $4.5million.

Cash provided by operating activities for the sixmonths ended June 30, 2003, totaled $7.7 million, comprising the netloss of $11.0 million, increased by adjustments for depreciation andamortization of $21.4 million, the net change in operating assets andliabilities of $2.2 million and other miscellaneous items totaling $1.6million, offset by a deferred income tax benefit of $6.5 million. Cashused in investing activities was $12.7 million comprising capitalexpenditures of $ 13.4 million net of proceeds from dispositions of$0.8 million. The majority of the capital expenditures were used tomanufacture camera rental systems and accessories.

Cash providedby financing activities was $0.9 million, which comprised repayments of$10.1 million under the Prior Credit Agreement, deferred financingcosts of $3.2 million, proceeds from the 

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issuance of Series B Preferred Stock of $4.4million, and proceeds from the issuance of Series C Preferred Stock of$9.8 million, net of transaction costs.

Long-TermDebt

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

On August 13, 2003, MacAndrews & Forbes agreed to amend anexisting line of credit provided to the Company to increase the amountavailable for borrowing from $4.0 million to $10.0 million and extendthe 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 April15, 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 June 30, 2004, theCompany had availability under the Second MacAndrews line ofapproximately $12.1 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 theoutstanding shares of PANY Rental); (e) the retirement of all

23

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amounts (consisting of $630,780 in principaland $82,913 in accrued and unpaid interest) owed by PANY Rental to PXHolding pursuant to a certain promissory note held by PX Holding; and(f) the retirement of all amounts (consisting of $7.8 million inprincipal and unpaid interest) owed to 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 the 9 5/8% Notesremain outstanding on that date. The term facility bears interest ateither the ABR or Eurodollar Rate (as defined in the Amended CreditAgreement) plus a margin of 5.25% in the case of ABR loans or6.25% in the case of Eurodollar Loans. The term facility underthe Amended Credit Agreement is secured on substantially the same basisas indebtedness under the Prior Credit Agreement. In connection withthe Amended Credit Agreement, the Company paid fees to lenders andprofessional advisors of approximately $3.5 million, including anoriginal issue discount fee of approximately $2.0 million.Approximately $3.1 million of the fees paid were expensed in 2004.

Under the Amended Credit Agreement, the Company is required to repay$5.0 million in principal in 2004, whereas under the Prior CreditAgreement the Company would have been required to make principalpayments of approximately $221.1 million in 2004. In addition, theAmended Credit Agreement revised certain financial tests and otherrestrictive covenants set forth in the Prior Credit Agreement,including required EBITDA (as defined), limitations on indebtedness,and other provisions. As defined in the Amended Credit Agreement and2004 Indenture, EBITDA includes adjustments for severance expense,refinancing expense, foreign exchange gain or loss, and other non-cashcharges. As of June 30, 2004, $131.1 million was outstanding under theAmended Credit Agreement.

As a result of the January 2004Refinancing, 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.

Recent Events

On August 6, 2004, the Companysold its 80% interest in EFILM to Deluxe Laboratories, Inc.("Deluxe"), the holder of the remaining20% interest in EFILM, for total consideration of $32.5 million,including $27.5 million in cash and a promissory note for $5 million(the "EFILM Sale").

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The EFILM Sale will result in theelimination of EFILM's EBITDA from the EBITDA counted for thepurposes of the minimum EBITDA and other financial covenants under theAmended Credit Agreement and 2004 Indenture. Although there can be noassurance, the Company anticipates that additional EBITDA resultingfrom the reinvestment of the proceeds from the EFILM Sale during the3rd Quarter of 2004, as permitted under the Company'sAmended Credit Agreement and the 2004 Indenture, should enable theCompany to remain in compliance with its minimum EBITDA and otherfinancial covenants. In the absence of such reinvestment, however, itis possible that the Company may not be in compliance with thefinancial covenants for the four-quarter period ending September30, 2004 as a result of the EFILM EBITDA elimination and potentiallower-than-expected motion picture industry activity. In the event thatthe Company is unable to meet its required covenants for the periodending September 30, 2004, the Company would be required to seekwaivers or amendments of such covenants in the Amended Credit Agreementand 2004 Indenture. Although the lenders under the Amended CreditAgreement and 2004 Indenture have accommodated the Company to date andthe Company believes that the lenders will continue to do so, there canbe no assurance that they will continue to do so nor can there be anyassurance that the Company could successfully effect any alternatefinancing to replace the Amended Credit Agreement or other debt ifrepayment is accelerated.

Principally to provide a mechanism forthe reinvestment of the proceeds of the EFILM Sale, on August 11, 2004,the Company and the other parties to the Amended Credit Agreemententered into an amendment and waiver to the Amended Credit Agreement("First Amendment and Waiver"). Suchreinvestment includes the Company's recent acquisition ofTechnovision France, a supplier of camera systems to the motionpicture, television and television commercials markets in France. Toprovide a similar mechanism for the reinvestment of the proceeds of theEFILM Sale under the 2004 Indenture, on August 11, 2004, the Companyand Wilmington Trust Company, as Trustee, entered into a supplementalindenture ("Supplemental Indenture").

Capital Expenditures

The Company intends to usecash provided by operating activities and its revolving lines of creditto make additional capital expenditures primarily to manufacture camerasystems and accessories and 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.

Liquidity Requirements

Panavision is a holdingcompany whose principal material asset is the ownership interest in itssubsidiaries. The Company's principal business operations areconducted by its subsidiaries. Accordingly, the Company's sourceof cash to pay its obligations is expected to be distributions withrespect to its ownership interests in its subsidiaries. There can be noassurance that its subsidiaries will generate sufficient cash flow topay dividends or distribute funds to the Company or that applicablestate or foreign law and contractual restrictions, including negativecovenants contained in the debt instruments of such subsidiaries, willpermit such dividends or distributions.

Although there can be noassurance, the Company expects that cash flows from operations,borrowings under the revolving line of credit, and cash equitycontributions and advances from affiliates will be sufficient to enablethe Company to meet its anticipated operating, capital spending anddebt service requirements through at least the next twelve months,subject to the discussion above under Recent Events.

Off-Balance Sheet Arrangements

The Company does not haveany off-balance sheet financing arrangements.

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Seasonality

The Company'srevenue and net income are subject to seasonal fluctuations. In NorthAmerica, episodic television programs cease filming in the secondquarter for several months, and typically resume production in August.Feature film production activity typically reaches its peak in thethird and fourth quarters.

SFAS No. 142, "Goodwilland Other Intangible Assets"

The Company adoptedSFAS No. 142 "Goodwill and Other IntangibleAssets," ("SFAS 142") on January1, 2002. SFAS 142 requires that goodwill and indefinite-livedintangible assets not be amortized but, instead, tested at leastannually for impairment while intangible assets that have finite usefullives continue to be amortized over their respective useful lives.

The Company performed an impairment test relating to its goodwilland tradename as of December 31, 2002 and December 31, 2003, and foundthat the fair values of its goodwill and its tradename are in excess ofcarrying value.

The Company will perform its annual impairmenttests of goodwill and tradename during the fourth quarter of fiscal2004 in connection with the Company's planning efforts for 2005.As the Company has not yet determined what the effects of these testswill be on its earnings and financial position, these effects, whichmay have a material impact, will be reflected in the consolidatedfinancial statements for the year ending December 31, 2004.

Forward-Looking Statements

This quarterly report on Form10-Q for the quarter ended June 30, 2004, as well as certain of theCompany's other public documents and statements and oralstatements, contain forward-looking statements that reflectmanagement'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) the inability to secure capital contributions orloans from affiliates, refinance its indebtedness or sell its equitysecurities; or (j) failure to reinvest the proceeds of the EFILM Saleas planned. 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 

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risks through its regular operating andfinancing activities. Item 7A of the Company's Annual Report onForm 10-K/A for the year ended December 31, 2003 presents quantitativeand qualitative disclosures about market risk as of December 31, 2003.As of June 30, 2004, there have been no material changes in theCompany's market risk since December 31, 2003.

Item 4.    Controls and Procedures

(a) Disclosure Controls andProcedures. The Company's management, with the participation ofthe Company's Chief Executive Officer and Chief FinancialOfficer, has evaluated the effectiveness of the Company'sdisclosure controls and procedures (as such term is defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of thefiscal period covered by this Quarterly Report on Form 10-Q. Based uponsuch evaluation, the Chief Executive Officer and Chief FinancialOfficer have concluded that, as of the end of such period, theCompany'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 thatit files or submits under the Exchange Act.

(b) Changes inInternal Control Over Financial Reporting. There have not been anychanges in the Company's internal control over financialreporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) during the fiscal period to which thisQuarterly Report on Form 10-Q relates that have materially affected, orare reasonably likely to materially affect, the Company'sinternal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1.    Legal Proceedings

No material legalproceedings are pending.

Item 2.    Changes in Securities,Use of Proceeds and Issuer Purchases of Equity Securities

None.

Item 3.    Defaults Upon SeniorSecurities

There were no events of default uponsenior securities during the quarter ended June 30, 2004.

As of August 13, 2004, the Company has accumulatedapproximately $10.0 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 a Vote of SecurityHolders

The Company's 2004 Annual Meeting ofStockholders was held on May 18, 2004. The only matter voted upon atsuch meeting was the re-election of Ronald O. Perelman, Robert L.Beitcher, Howard Gittis, Edward Grebow, Ed Gregory Hookstratten, JamesR. Maher, Martin D. Payson, John A. Scarcella, Robert S. Wiesenthal,and Kenneth Ziffren as directors, consisting of all the directorsstanding for re-election, and all of whom were re-elected.

The Company's voting stock comprises 8,769,919shares of Common Stock, par value $0.01 per share, each of which isentitled to one vote, and 1,381,690 shares of Series E Preferred Stock,each of which is entitled to one vote. The following is a tabulation ofthe votes cast in connection with the Election of Directors:

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Nomineesfor Director  |  | For |  | Against orWithheld |  | Abstained |  | BrokerNon-Votes |
| RonaldO.Perelman      |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| RobertL.Beitcher      |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| HowardGittis          |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| EdwardGrebow          |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| EdGregoryHookstratten |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| JamesR.Maher          |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| MartinD.Payson        |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| JohnA.Scarcella       |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| RobertS.Wiesenthal    |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
| KennethZiffren        |  |   | 9,946,887 |   |  |   | 179 |   |  |   | — |   |  |   | — |   |
|                       |

Item5.    Other Information

No additional informationneed be presented.

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Item 6.    Exhibits and Reportson Form8-K

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

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

|           |                                                                                                                                                                                                                |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1  | Restated Certificate ofIncorporation of the Company (incorporated herein by reference to theidentically numbered exhibit to the Company's Quarterly Report onForm 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 herein byreference to Exhibit 3.7 to the Company's Annual Report on Form10-K for the year ended December 31,2003).** |

|         |                                                                         |
|---------|-------------------------------------------------------------------------|
| 4  | InstrumentsDefining the Rights of 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 from to Exhibit 4.17 to the Company's Annual Report onForm 10-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).** |

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

|            |                                                                                      |
|------------|--------------------------------------------------------------------------------------|
| 31.1  | Certification of Robert L.Beitcher, Chief Executive Officer, dated August 13, 2004.* |

|            |                                                                                    |
|------------|------------------------------------------------------------------------------------|
| 31.2  | Certification of Bobby G. Jenkins,Chief Financial Officer, dated August 13, 2004.* |

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

|            |                                                                                                                                                                                                                                                                 |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 32.1  | Certificationsof Robert L. Beitcher, Chief Executive Officer, and Bobby G. Jenkins,Chief Financial Officer, dated August 13, 2004, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002 (furnished herewith). |

|               |                         |
|---------------|-------------------------|
| **(b)**  | **Reports on Form8-K.** |

None.

|   |                |
|---|----------------|
| * | Filedherewith. |

|  |                    |
|--|--------------------|
|  | **Previouslyfiled. |

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SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersignedthereunto duly authorized.

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

|                                       |  |                                                                                               |  |  |  |  |
|---------------------------------------|--|-----------------------------------------------------------------------------------------------|--|--|--|--|
| Date:   August13, 2004 |  | By:   /s/ ROBERT L. BEITCHER                                                   |
| ______________________________   |  | __________________________________                                                       |
|                                  |  | RobertL. BeitcherPresident andChief ExecutiveOfficer                                          |
|                                  |  | By:  /s/BOBBY G.JENKINS                                                             |
|                                  |  | __________________________________                                                       |
|                                  |  | BobbyG. JenkinsExecutive Vice President,ChiefFinancial Officer andPrincipal AccountingOfficer |
|                                       |

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