UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-K

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001

                                     or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from          to
                               --------    --------

Commission File Number  1-13780


                           M & F WORLDWIDE CORP.
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           (Exact name of registrant as specified in its charter)


                      Delaware                                02-0423416
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            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)               Identification No.)


        35 East 62nd Street, New York, N.Y.                        10021
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      (Address of principal executive offices)                   (Zip Code)


                                212-572-8600
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            (Registrant's telephone number, including area code)


        Securities registered pursuant to Section 12(b) of the Act:


      Title of each class           Name of each exchange on which registered
      -------------------           -----------------------------------------
    Common Stock, par value               New York Stock Exchange, Inc.
    $.01 per share


      Securities registered pursuant to Section 12(g) of the Act: None


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

         Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

         The aggregate market value of the Common Stock held by
non-affiliates of the registrant as of March 21, 2002 was $33,270,166. The
number of shares of Common Stock outstanding as of March 21, 2002 was
19,621,271.

         Portions of the registrant's 2002 definitive Proxy Statement
issued in connection with the annual meeting of stockholders are
incorporated by reference into Part III of this Form 10-K.

This Form 10-K is being distributed to stockholders in lieu of a separate
annual report


                        M & F WORLDWIDE CORPORATION

                    INDEX TO ANNUAL REPORT ON FORM 10-K

                    For the Year Ended December 31, 2001

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                                                                                     PAGE

                                   PART I

<S>  <C>                                                                                <C>
Item 1    Business.................................................................     3

Item 2    Properties...............................................................    20

Item 3    Legal Proceedings........................................................    20

Item 4    Submission of Matters to a Vote of Security Holders......................    22



                              PART II

Item 5    Market for Registrant's Common Equity and Related Stockholder Matters....    23

Item 6    Selected Financial Data..................................................    23

Item 7    Management's Discussion and Analysis of Financial Condition and
          Results of Operations....................................................    26

Item 8    Financial Statements and Supplementary Data..............................    43

Item 9    Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure.................................................    43



                              PART III

Item 10   Directors and Executive Officers of the Registrant.......................     *

Item 11   Executive Compensation...................................................     *

Item 12   Security Ownership of Certain Beneficial Owners and Management...........     *

Item 13   Certain Relationships and Related Transactions...........................     *



                              PART IV

Item 14   Exhibits, Financial Statement Schedules and Reports on Form 8-K..........   F-1



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* Incorporated by reference from M & F Worldwide Corp. 2002 Proxy Statement.
</TABLE>


                                   PART I

Item 1.  Business

(A)      General

         M & F Worldwide Corp. ("M & F Worldwide" or the "Company"), an
indirect majority-owned subsidiary of Mafco Holdings, Inc. ("Holdings"),
was incorporated in Delaware on June 1, 1988 and is a holding company that
conducts its operations through its indirect wholly owned subsidiary,
Pneumo Abex Corporation ("Pneumo Abex" or "Mafco Worldwide"), and after
April 19, 2001, its indirect 85.7% owned subsidiary, Panavision Inc.
("Panavision").

         M & F Worldwide has been a public company since June 15, 1995 when
shares of its common stock, par value $.01 per share (the "M & F Worldwide
Common Stock"), were publicly distributed to existing stockholders of Abex
Inc. ("Abex"), M & F Worldwide's former parent, in connection with the
merger (the "Abex Merger") of Abex and a wholly owned subsidiary of
Holdings and the related transfer (the "Transfer") to a subsidiary of MCG
Group Inc. ("MCG") of substantially all of Abex's consolidated assets and
liabilities, other than those relating to its Abex NWL Aerospace Division
("Aerospace"), which continued to be owned by M & F Worldwide.

         On November 25, 1996, MCG and M & F Worldwide consummated the
transactions contemplated by a Stock and VSR Purchase Agreement (the
"Purchase Agreement"), dated as of October 23, 1996, by and among MCG, M &
F Worldwide and PCT International Holdings Inc. ("Purchaser"), a Delaware
corporation and wholly owned subsidiary of M & F Worldwide. Pursuant to the
Purchase Agreement, Purchaser acquired from MCG (the "Flavors
Acquisition"), all the issued and outstanding shares (the "Shares") of
capital stock of Flavors Holdings Inc. ("Flavors Holdings"), a Delaware
corporation and wholly owned subsidiary of MCG, and 23,156,502 Value
Support Rights (each a "VSR" and, collectively, the "VSRs"). On December
31, 1996, the Company distributed to its stockholders the VSRs received as
part of the Flavors Acquisition.

         In consideration for the Shares and VSRs, Purchaser paid MCG cash
in the amount of $180.0 million. In addition, Purchaser paid MCG deferred
cash payments of $3.7 million on June 30, 1997 and $3.5 million on January
2, 1998.

         Immediately following the Flavors Acquisition, Mafco Worldwide,
then a wholly owned subsidiary of Flavors Holdings, through a series of
transactions merged with and into Pneumo Abex, with Pneumo Abex being the
surviving corporation and becoming a wholly owned subsidiary of Flavors
Holdings.

         Pursuant to a Stock Purchase Agreement, dated as of April 19, 2001
(the "Stock Purchase Agreement") between PX Holding Corporation ("PX
Holding"), a wholly owned subsidiary of Holdings, and the Company, the
Company acquired from PX Holding 7,320,225 shares of common stock (the
"Acquired Shares") of Panavision. The aggregate consideration for the
Acquired Shares, including fees, was $121.0 million and consisted of (i)
$80.0 million in cash, (ii) 1,500,000 shares of M & F Worldwide common
stock held in treasury and (iii) 6,182,153 shares of Series B
Non-Cumulative Perpetual Participating Preferred Stock (the "Series B
Preferred Stock") of M & F Worldwide having a liquidation preference of
$6.50 per share and one vote per share. Immediately following the
acquisition of the Acquired Shares (the "Panavision Acquisition"), the
Company contributed the Acquired Shares to the capital of a wholly owned
subsidiary, PVI Acquisition Corp.

         Immediately after the Panavision Acquisition, MCG owned 6,648,800
shares of common stock of M & F Worldwide (representing 32.24% of the
outstanding common stock and 24.81% of the outstanding voting stock); PX
Holding owned 1,500,000 shares of common stock of M & F Worldwide
(representing 7.27% of the outstanding common stock and 5.60% of the
outstanding voting stock); and PX Holding owned 6,182,153 shares of the
Series B Preferred Stock (representing 100% of the class and 23.06% of the
outstanding voting stock). Accordingly, Holdings' indirect beneficial
ownership of M & F Worldwide represented 39.51% of the outstanding M & F
Worldwide common stock and 53.47% of the outstanding M & F Worldwide voting
stock immediately after the transaction.

         In connection with the closing of the Panavision Acquisition,
Panavision, for federal income and certain state and local tax purposes,
became a member of the affiliated group of which the Company is the common
parent and left the affiliated group of which Holdings is the common
parent. In connection with such event, Panavision, certain of its
subsidiaries and the Company entered into a tax sharing agreement dated as
of April 19, 2001, pursuant to which Panavision, certain of its
subsidiaries and the Company agreed to allocate and share any liabilities
that arise by virtue of the parties being consolidated for federal, and
certain state and local, income tax purposes.

         At the closing of the Panavision Acquisition, Ronald O. Perelman,
the sole owner of Holdings, delivered a letter to the Company in which Mr.
Perelman agreed that, if the Company determines in its good faith
reasonable judgment that Panavision is unable to make required payments of
principal or interest under its existing bank credit facilities (the
Panavision credit facility, originally entered into on June 4, 1998, as
subsequently amended on September 30, 1998 and June 30, 1999, the "Existing
Credit Agreement") or 9 5/8% Senior Subordinated Notes due 2006 (the
"Notes" or "Existing Notes"), he or corporations under his control will
provide such financial support to the Company as may be required by
Panavision in connection with such payments of principal and interest. The
financial support from Mr. Perelman will be in an amount as M & F Worldwide
determines. However, there can be no assurance that M & F Worldwide will
make such determination or if such determination is made, whether such
determination will be adequate and timely in order to meet Panavision's
needs, if such needs arise. Also at the closing of the Panavision
Acquisition, Holdings delivered a letter to M & F Worldwide pursuant to
which Holdings agreed that it or corporations under its control would
disburse to M & F Worldwide an aggregate amount of $10.0 million to be
invested by M & F Worldwide in Panavision (the "M & F Investment") if
Panavision was unable to make required payments of principal or interest
under its Existing Credit Agreement or Existing Notes, but in any event no
later than December 31, 2001. Concurrently, M & F Worldwide delivered to
Panavision a letter pursuant to which M & F Worldwide agreed that it would
make available to Panavision an aggregate amount of $10.0 million as
required by Panavision to make payments of principal or interest under its
Existing Credit Agreement or Existing Notes, but in any event no later than
December 31, 2001, in exchange for subordinated debt, common stock or
voting preferred stock of Panavision. The M & F Investment was conditioned
upon M & F Worldwide having previously received an equivalent cash amount
pursuant to its letter agreement with Holdings. The financial support to be
provided by Mr. Perelman and Holdings to the Company would be evidenced by
either or both of (i) subordinated debt of the Company, maturing as the
Company determines based on its cash flow projections and bearing an
interest rate equal to that of the bank credit facilities outstanding at
Pneumo Abex and (ii) newly issued shares of Series B Preferred Stock priced
at the greater of (a) $15.00 per share and (b) the then fair market value
of the Company's common stock.

         On December 21, 2001, in satisfaction of the obligation set forth
in the letter, PX Holding paid $10.0 million to the Company in exchange for
which the Company issued 666,667 shares of Series B Preferred Stock to PX
Holding. Also on December 21, 2001, the Company purchased from PX Holding
$22.0 million principal amount of Existing Notes for $8.1 million. Such
Existing Notes, together with $2.5 million principal amount of Existing
Notes owned by the Company, were delivered to Panavision in exchange for
1,381,690 newly issued shares of Panavision's Series A Non-Cumulative
Perpetual Participating Preferred Stock in satisfaction of the Company's
obligation to make the M & F Investment.

         At December 31, 2001, Holdings' indirect beneficial ownership of M
& F Worldwide represented 41.53% of the outstanding M & F Worldwide common
stock and 56.66% of the outstanding M & F Worldwide voting stock.

         At December 31, 2001, M & F Worldwide's indirect beneficial
ownership of Panavision represented 83.5% of the outstanding Panavision
common stock and 85.7% of the outstanding Panavision voting stock.

(B)      Industry Segments

         The Company's significant industry segments are the production of
licorice extract for sale to the tobacco and confectionery industries by
Mafco Worldwide and the design, manufacture and supply of high precision
camera systems for the motion picture and television industries and rental
operations providing lighting and lighting equipment through Panavision.

(C)      Narrative description of business

                              MAFCO WORLDWIDE

         Mafco Worldwide is primarily in the business of producing licorice
flavors and other flavoring agents from whole and processed plant products.
Based upon its knowledge of the licorice industry, Mafco Worldwide believes
that it is the world's largest producer of licorice flavors. Mafco
Worldwide also believes that it manufactures more than 70% of the worldwide
licorice flavors sold to end-users. Approximately 70% of Mafco Worldwide's
licorice sales are to the worldwide tobacco industry for use as flavoring
and moistening agents in the manufacture of American blend cigarettes,
moist snuff, chewing tobacco and pipe tobacco. While licorice flavors
represent a small percentage of the total cost of manufacturing American
blend cigarettes and the other tobacco products, the particular formulation
and quantity used by each brand is an important element of the brand's
flavor.

         Mafco Worldwide also sells licorice flavors to worldwide
confectioners, food processors and pharmaceutical manufacturers for use as
flavoring or masking agents. In addition, Mafco Worldwide sells licorice
root residue as a garden mulch under the name Right Dress. Mafco
Worldwide's other products include natural flavors and plant products from
roots, berries, spices and botanicals that are used in food, tobacco,
pharmaceutical and health food products.

         The Company believes that Mafco Worldwide has achieved its
position as the world's leading manufacturer of licorice flavors through
its experience in obtaining licorice root, its technical expertise at
maintaining the consistency and quality of its product and its ability to
develop and manufacture proprietary formulations for individual customers
and applications.

Operating Strategies

         Mafco Worldwide intends to maintain its position as the world
leader in licorice flavors by improving its manufacturing process and raw
material procurement in order to achieve stable costs and by continuing to
operate ventures in strategic areas of the world to increase its overall
licorice business.

Products and Manufacturing

         Licorice flavoring agents. Mafco Worldwide produces a variety of
licorice products from licorice root, intermediary licorice flavors
produced by others and certain other ingredients at its facilities in
Camden, New Jersey; Gardanne, France and Xianyang, China. Mafco Worldwide
selects licorice root from various sources to optimize flavoring and
chemical characteristics and then shreds the root to matchstick size.
Licorice solids are then extracted from the shredded root with hot water.
After filtration and evaporation, the concentrated extract is converted
into powder, semifluid or blocks, depending on the customer's requirements,
and then packaged and shipped. For certain customers, extracts from root
may be blended with intermediary licorice flavors from other producers and
non-licorice ingredients to produce licorice flavors that meet the
individual customer's requirements. Licorice extract can be further
purified to produce licorice derivatives. Mafco Worldwide maintains
finished goods inventories of sufficient quantity to provide immediate
delivery to its domestic tobacco and non-tobacco customers. Domestically
produced licorice flavors for foreign orders are either produced and
shipped within 30 days or shipped immediately from inventory held at a
European warehouse. French produced licorice flavors are primarily shipped
from inventory.

         Non-licorice flavoring agents and plant products. Mafco Worldwide
also sells flavoring agents and plant products to the tobacco, spice,
pharmaceutical and health food industries. Mafco Worldwide cleans, grinds
or cuts unprocessed spices, herbs and plant products.

Raw Materials

         Licorice is derived from the roots of the licorice plant, a
shrub-like leguminous plant that is indigenous to the Middle East and
Central Asia. The plant's roots, which can be up to several inches thick
and up to 25 feet long, are harvested when the plant is about four years
old. They are then cleaned, dried and bagged or pressed into bales. Through
its foreign suppliers, Mafco Worldwide acquires the root in local markets
for shipment to Mafco Worldwide's processing facilities in Camden, New
Jersey or Gardanne, France. Most of the licorice root processed by Mafco
Worldwide originates in Afghanistan, China, Pakistan, Azerbaijan,
Uzbekistan, Turkmenistan, Syria and Turkey. Through many years of
experience, Mafco Worldwide has developed extensive knowledge and
relationships with their suppliers in these areas. Although the amount of
licorice root Mafco Worldwide purchases from any individual source or
country varies from year to year depending on cost and quality, Mafco
Worldwide endeavors to purchase some licorice root from all available
sources. This enables Mafco Worldwide to maintain multiple sources of
supply and relationships with many suppliers so that, if the licorice root
from any one source becomes temporarily unavailable or uneconomic, Mafco
Worldwide will be able to replace that source with licorice root from
another area or supplier. The war against the Taliban in Afghanistan has
not had a significant effect on Mafco Worldwide's total root supply and
with the Taliban now defeated and normal commerce starting to resume, Mafco
Worldwide is optimistic that root supplies, which had been interrupted
there, will resume later in 2002. During 2001, Mafco Worldwide had twelve
suppliers of root of which two vendors supplied 26% and 21% of Mafco
Worldwide's total root purchases. Mafco Worldwide tries to maintain a
sufficient licorice root inventory and open purchase contracts to meet
minimum production needs for two years. At December 31, 2001, Mafco
Worldwide had on hand approximately a three-year supply of root. Licorice
root has an indefinite retention period as long as it is kept dry, and
therefore Mafco Worldwide has experienced little, if any, material
spoilage. Mafco Worldwide has been able to obtain licorice root without
interruption since World War II even though there has been periodic
instability in the areas of the world where licorice root grows.

         In addition to licorice root, Mafco Worldwide also purchases
intermediary licorice flavors produced by others for use as a raw material.
These flavors are available from producers primarily in China and Central
Asia in quantities sufficient to meet Mafco Worldwide's current
requirements and anticipated requirements for the foreseeable future.
During 2001, Mafco Worldwide had twelve suppliers of intermediary licorice
flavors of which one supplied 29% of total purchases.

         Other raw materials for Mafco Worldwide's non-licorice flavor
products and plant products are commercially available through many
domestic and foreign sources.

Sales and Marketing

         All sales in the U.S. (including sales of licorice flavors to U.S.
cigarette manufacturers for use in American blend cigarettes to be
exported) are made through Mafco Worldwide's offices located in Camden, New
Jersey or Richmond, Virginia, with technical support from Mafco Worldwide's
research and development department. Outside the U.S., Mafco Worldwide
sells its products directly from its Camden, New Jersey offices, through
its Chinese and French subsidiaries, through exclusive agents and through
independent distributors.

         The Company believes that Mafco Worldwide has established strong
relationships with its customers in the tobacco, confectionery and other
industries because of its expertise in producing and supplying consistent
quality licorice products and other flavoring agents with a high level of
service and security of supply. Mafco Worldwide ships products worldwide
and provides technical assistance for product development for both tobacco
and non-tobacco applications.

         Mafco Worldwide sells licorice root residue, a by-product of the
licorice extract manufacturing process, as a garden mulch under the name
Right Dress. Distribution of Right Dress is limited to the area within a
200-mile radius of Camden, New Jersey due to shipping costs and supply
limitations.

         In 2001, Mafco Worldwide's ten largest customers, seven of which
are manufacturers of tobacco products, accounted for approximately 64% of
Mafco Worldwide's net revenues and one customer, Philip Morris Companies
Inc. ("Philip Morris"), accounted for approximately 31% of Mafco
Worldwide's 2001 sales. If Philip Morris were to stop purchasing licorice
from Mafco Worldwide, it would have a significant adverse effect on the
financial results of Mafco Worldwide.

Competition

         The Company believes that Mafco Worldwide's position as the
largest manufacturer of licorice flavors in the world arises from its
long-standing ability to provide its customers with a steady supply of high
quality and consistent products, together with superior technical support.
Producing licorice flavors of consistently high quality at low cost
requires an experienced work force, careful manufacturing and rigorous
quality control. The Company believes that Mafco Worldwide's long-term
relationships and knowledge of the licorice root market are of great value
in enabling it to consistently acquire quality raw materials at reasonable
cost. Although Mafco Worldwide could face increased competition in the
future, Mafco Worldwide currently encounters limited competition in sales
of licorice flavors to tobacco companies in many of its markets as a result
of the factors described above and the large investments in inventories of
raw materials and production facilities that are required to adequately
fulfill its customers' needs. Other markets in which Mafco Worldwide
operates, particularly the confectionery licorice market in Europe, are
more competitive. Significant competing producers of licorice flavors are
government-owned and private corporations in China, several corporations in
Iran and a corporation based in Israel.

The Tobacco Industry

         Developments and trends within the tobacco industry may have a
material effect on the operations of Mafco Worldwide.

         During the period from 1997-2001, U.S. cigarette consumption
declined at an estimated average rate of 3% per year due to the significant
price increases by the cigarette manufacturers in order to recover costs of
the 1998 settlement with the state attorneys general, greater health
awareness of health risks by consumers and continuing restrictions on
smoking areas. Exports of cigarettes by U.S. manufacturers decreased at an
estimated average rate of 8.8% per year from 1997 to 2001. The decrease in
exports is due to higher offshore production of U.S. brands. In response to
the popularity of U.S. brands, foreign manufacturers also produce American
blend cigarettes.

         Consumption of chewing tobacco and moist snuff is concentrated
primarily in the U.S. U.S. production of chewing tobacco products has
steadily declined for more than a decade and from 1997 through 2001 it has
declined by 5.1% per year. Consumption has declined because chewing tobacco
appeals to a limited and declining customer base, primarily males living in
rural areas. Moist snuff consumption has risen steadily since the mid-1970s
and has increased 2.2% per year from 1997 through 2001 due at least in part
to the shift away from cigarettes and other types of smoking tobacco.

         Producers of tobacco products are subject to regulation in the
U.S. at the federal, state and local levels. Together with changing public
attitudes toward tobacco products, a constant expansion of tobacco
regulations since the early 1970s has been a major cause for the decline in
consumption. Moreover, the trend is toward increasing regulation of the
tobacco industry.

         For more than 35 years, the sale and use of tobacco products has
been subject to opposition from government and health officials in the U.S.
and other countries due to claims that tobacco consumption is harmful to an
individual's health. These claims have resulted in a number of substantial
restrictions on the marketing, advertising, sale and use of cigarettes and
other tobacco products, in diminished social acceptability of smoking and
in activities by anti-tobacco groups designed to inhibit tobacco product
sales. The effects of these claims together with substantial increases in
state and federal taxes on cigarettes have resulted in lower tobacco
consumption, which is likely to continue in the future. Mafco Worldwide
cannot predict the future course of tobacco regulation. Any substantial
increase in tobacco regulation may adversely affect tobacco product sales,
which could indirectly have a material adverse effect on Mafco Worldwide.

         In the last several years, there has been substantial litigation
between tobacco product manufacturers and individuals, various governmental
units and private health care providers regarding increased medical
expenditures and losses allegedly caused by use of tobacco products.
Certain of these claims were tentatively settled during 1998 ("1998
Settlements"), though certain of the settlements may be subject to legal
challenge. Among other things, the 1998 Settlements require the tobacco
product manufacturers to pay a substantial monetary settlement and adhere
to certain advertising and marketing restrictions. As a result of the 1998
Settlements and other settlements, the cigarette companies have
significantly increased the wholesale price of cigarettes in order to
recoup the cost of the settlements. Since 1998, cigarette consumption in
the U.S. has decreased approximately 8% because of the higher prices of
cigarettes, the increased emphasis on the health effects of cigarettes and
the continuing restrictions on smoking areas. At this time Mafco Worldwide
is unable to determine whether additional price increases in the future
will reduce tobacco consumption or the effect of reduced consumption on
Mafco Worldwide's financial performance. There can be no assurance that
there will not be an increase in health-related litigation against the
tobacco industry or that Mafco Worldwide, as a supplier to the tobacco
industry, will not be party to such litigation. This litigation, if
successful, could have a material adverse effect on Mafco Worldwide.

         The tobacco industry, including cigarettes and smokeless tobacco,
has been subject to federal, state and local excise taxes for many years.
In recent years, federal, state and local governments have increased or
proposed increases to such taxes as a means of both raising revenue and
discouraging the consumption of tobacco products. Mafco Worldwide is unable
to predict the likelihood of enactment of such proposals or the extent to
which enactment of such proposals would affect tobacco sales. A significant
reduction in consumption of cigarettes and other tobacco products could
have a material adverse effect on Mafco Worldwide.

Environmental Matters

         Mafco Worldwide is subject to environmental laws. The Company
believes that Mafco Worldwide's operations are in substantial compliance
with all applicable environmental laws. Although no material capital or
operating expenditures relating to environmental controls or other
environmental matters are currently anticipated, there can be no assurance
that Mafco Worldwide will not incur costs in the future relating to
environmental matters that would have a material adverse effect on Mafco
Worldwide's business or financial condition.

Seasonality

         The licorice flavor business is generally non-seasonal. However,
sales of Right Dress garden mulch occur primarily in the first seven months
of the year.

Sales Backlog

         The sales backlog of Mafco Worldwide at any time is generally not
significant. Domestic and foreign orders from tobacco and non-tobacco
customers are received with shipment requirements quarterly, monthly or
weekly depending upon the customer's needs. Certain confectionery and
health food customers negotiate annual contracts which were not significant
at December 31, 2001.

Employees

         At December 31, 2001, Mafco Worldwide had approximately 296
employees. Mafco Worldwide has 140 employees covered under collective
bargaining agreements. The agreement covering employees at the Camden, New
Jersey facility expires at the end of May 2005. Management believes that
its employee relations are good.

Corporate Indemnification Matters

         Pneumo Abex is indemnified by third parties with respect to
certain of its contingent liabilities, such as certain environmental and
asbestos matters, as well as certain tax and other matters. In connection
with the Abex Merger, a subsidiary of Abex, M & F Worldwide, Pneumo Abex
and certain other subsidiaries of M & F Worldwide entered into a transfer
agreement (the "Transfer Agreement"). Under the Transfer Agreement,
substantially all of Abex's consolidated assets and liabilities, other than
those relating to Aerospace, were transferred to a subsidiary of MCG, with
the remainder being retained by Pneumo Abex. The Transfer Agreement
provides for appropriate transfer, indemnification and tax sharing
arrangements, in a manner consistent with applicable law and existing
contractual arrangements.

         The Transfer Agreement requires such subsidiary of MCG to
undertake certain administrative and funding obligations with respect to
certain asbestos claims and other liabilities, including environmental
claims, retained by Pneumo Abex. The Company will be obligated to make
reimbursement for the amounts so funded only when amounts are received by
the Company under related indemnification and insurance agreements. Such
administrative and funding obligations would be terminated as to asbestos
products claims in the case of a bankruptcy of Pneumo Abex or M & F
Worldwide or of certain other events affecting the availability of coverage
for such claims from third party indemnitors and insurers. In the event of
certain kind of disputes with Pneumo Abex's indemnitors regarding their
indemnities, the Transfer Agreement permits the Company to require such
subsidiary to fund 50% of the costs of resolving the disputes.

         Prior to 1988, a former subsidiary of the Company manufactured
certain asbestos-containing friction products. Pneumo Abex has been named,
typically along with 10 to as many as 100 or more other companies, as a
defendant in various personal injury lawsuits claiming damages relating to
exposure to asbestos. Pursuant to indemnification agreements,
PepsiAmericas, Inc., formerly known as Whitman Corporation (the "Original
Indemnitor"), has retained ultimate responsibility for asbestos-related
claims made through August 1998 and for certain asbestos-related claims
asserted thereafter. In connection with the sale by Abex in December 1994
of its Friction Products Division, a subsidiary (the "Second Indemnitor")
of Cooper Industries, Inc. (the "Indemnity Guarantor") assumed
responsibility for substantially all of the asbestos-related claims made
after August 1998. Federal-Mogul Corporation purchased the Second
Indemnitor in October 1998. In October 2001, the Second Indemnitor filed a
petition under Chapter 11 of the U.S. Bankruptcy Code and stopped
performing its indemnity obligations to the Company. Performance of the
Second Indemnitor's indemnity obligation is guaranteed by the Indemnity
Guarantor. Following the bankruptcy filing of the Second Indemnitor, the
Indemnity Guarantor confirmed that it will fulfill the Second Indemnitor's
indemnity obligations to the extent that they are no longer being performed
by the Second Indemnitor for all claims other than a small portion of the
indemnified asbestos-related claims. As to that portion, the Company and
MCG in November 2001 commenced an arbitration (the "Arbitration") against
the Indemnity Guarantor seeking, among other things, an order confirming
the Indemnity Guarantor's obligation and reimbursement of amounts that the
Company has been required to advance on the Indemnity Guarantor's behalf in
the interim. The Indemnity Guarantor has filed two counterclaims in the
Arbitration. The first seeks an offset to the Company's claim for
reimbursement for any amount that the Indemnity Guarantor claims should
have been payable by insurance, to the extent that the Company prevails in
its claim. The second counterclaim seeks reimbursement of amounts the
Indemnity Guarantor has paid with respect to these claims to the extent
that the Arbitration panel upholds its position on the scope of the
indemnity. The Company expects that all presentations in the Arbitration
will be complete by May, 2002 and that it will prevail in all respects.
Accordingly, at December 31, 2001 the Company has not recorded any reserve
against its outstanding receivable of $2.8 million with the Indemnity
Guarantor.

         Pneumo Abex's former subsidiary maintained product liability
insurance covering substantially all of the period during which
asbestos-containing products were manufactured. The subsidiary commenced
litigation in 1982 against a portion of these insurers in order to confirm
the availability of this coverage. As a result of settlements in that
litigation, other coverage agreements with other carriers and payments by
the Original Indemnitor, the Second Indemnitor and the Indemnity Guarantor
pursuant to their indemnities, Pneumo Abex is receiving reimbursement in
full each month for its monthly expenditures for asbestos-related claims
other than expenses for the claims subject to the Arbitration. Pneumo Abex
is unable to forecast either the number of future asbestos-related
claimants or the amount of future defense and settlement costs associated
with present or future asbestos-related claims.

         The Transfer Agreement further provides that MCG will indemnify
Pneumo Abex with respect to all environmental matters associated with
Pneumo Abex's and its predecessor's operations to the extent not paid by
third-party indemnitors or insurers, other than the operations relating to
Pneumo Abex's Aerospace business which were sold to Parker Hannifin
Corporation in April 1996. Accordingly, environmental liabilities arising
after the 1988 transaction with the Original Indemnitor that relate to the
Company's former Aerospace facilities will be the responsibility of Pneumo
Abex. The Original Indemnitor is obligated to indemnify Pneumo Abex for
costs, expenses and liabilities relating to environmental and natural
resource matters to the extent attributable to the pre-1988 operation of
the businesses acquired from the Original Indemnitor, subject to certain
conditions and limitations principally relating to compliance with notice,
cooperation and other procedural requirements. The Original Indemnitor is
generally discharging its environmental indemnification liabilities in the
ordinary course.

         It is generally not possible to predict the ultimate total costs
relating to any remediation that may be demanded at any of the sites
subject to the indemnity from the Original Indemnitor due to, among other
factors, uncertainty regarding the extent of prior pollution, the
complexity of applicable environmental laws and regulations and their
interpretations, uncertainty regarding future changes to such laws and
regulations or their enforcement, the varying costs and effectiveness of
alternative cleanup technologies and methods, and the questionable and
varying degrees of responsibility and/or involvement by Pneumo Abex.
However, the aggregate cost of cleanup and related expenses with respect to
matters for which Pneumo Abex, together with numerous other third parties,
have been named potentially responsible parties should be substantially
less than $150.0 million, including approximately $10.0 million in remedial
action costs in respect of one site actively managed and funded by the
Original Indemnitor.

         On February 5, 1996, the Company, through Pneumo Abex, entered
into a reimbursement agreement with Chemical Bank and MCG (the
"Reimbursement Agreement"). The Reimbursement Agreement provides for
letters of credit totaling $20.8 million covering certain environmental
issues relating to such site and not related to the current business of
Pneumo Abex. During 2000, the Environmental Protection Agency reduced the
letter of credit requirements to $2.2 million. The cost of the letters of
credit is being funded by MCG and/or the Original Indemnitor. Pneumo Abex
had $2.2 million of letters of credit outstanding at both December 31, 2001
and 2000, respectively, in connection with the Reimbursement Agreement.

         The Company has not recognized any liability in its financial
statements for matters covered by indemnification agreements. The Company
considers these obligations to be those of third-party indemnitors and
monitors their financial positions to determine the level of uncertainty
associated with their ability to satisfy their obligations. Based upon the
indemnitors' active management of indemnifiable matters, discharging of the
related liabilities when required, and financial positions based upon
publicly filed financial statements, as well as the history of insurance
recovery set forth above, the Company believes that the likelihood of
failing to obtain reimbursement of amounts covered by insurance and
indemnification is remote.

         During 1999, the Original Indemnitor and Pneumo Abex conducted an
arbitration concerning certain aspects of the scope of the indemnity from
the Original Indemnitor. On March 6, 2000, the arbitration panel issued its
decision confirming that the indemnity applies as described herein, except
that it did not extend to 87 asbestos-related claims, all of which have
been resolved previously.

         The former Aerospace business of the Company formerly sold certain
of its aerospace products to the U.S. Government or to private contractors
for the U.S. Government. Certain claims for allegedly defective pricing
made by the government with respect to certain of these aerospace product
sales were retained by Pneumo Abex in the Aerospace sale and remain
outstanding. In each case Pneumo Abex contests the allegations made by the
government and has been attempting to resolve these matters without
litigation.

         In addition, various other legal proceedings, claims and
investigations are pending against Pneumo Abex, including those relating to
commercial transactions, product liability, environmental, safety and
health matters and other matters. Most of these matters are covered by
insurance, subject to deductibles and maximum limits, and by third-party
indemnities.

         In the opinion of management, based upon the information available
at this time, the outcome of the matters referred to above will not have a
material adverse effect on the Company's financial position or results of
operations.

                                 PANAVISION

         Panavision is a leading designer, manufacturer and supplier of
high precision camera systems, comprising cameras, lenses and accessories,
for the motion picture and television industries. Panavision estimates that
in 2001, Panavision equipment was used in approximately 75% of feature
films produced by major motion picture studios and over half of the English
and French speaking independent feature films worldwide. Panavision camera
systems have been widely used in the filming of major motion pictures over
the last several decades, including the recent box office hits HARRY POTTER
AND THE SORCERER'S STONE, PEARL HARBOR, GLADIATOR, THE MATRIX and TITANIC.
Panavision also estimates that in 2001 it supplied camera equipment to over
75% of North American prime time episodic or "series" network and cable
television productions shot on film, such as THE WEST WING, E.R., FRASIER,
THE SOPRANOS and FRIENDS. Panavision is also a leading supplier of camera
systems to the television commercial market in North America, Europe and
the Asia Pacific region.

         The Company believes that Panavision's position as an industry
leader results from its broad range of technologically superior and
innovative products, its long-standing collaborative relationships with
filmmakers and studios, its dedication to customer service, its breadth of
its camera equipment inventory, and its unique worldwide distribution
network. Panavision is also the only supplier of cinematography equipment
that manufactures a complete camera system incorporating its own
proprietary prime and zoom lenses, the most critical components of a camera
system. Panavision is also the only major manufacturer of cameras and
lenses that is located near Hollywood. In contrast, Panavision's
manufacturing competitors are located primarily in Europe and sell their
products to rental companies, which then rent the equipment to the ultimate
user.

         Unlike equipment manufactured by its competitors, Panavision
camera systems are not available for sale, but instead are rented
exclusively through Panavision's domestic and international
owned-and-operated facilities and a network of independent agents. As the
only vertically integrated provider of camera systems to the film and
television industries, the Company believes that Panavision is better able
to meet its customers' needs effectively. Panavision is the only supplier
of cinematographic equipment that has a network of rental offices and
maintenance facilities throughout North America, Europe and the Asia
Pacific region. Renting equipment, rather than purchasing equipment, is
more cost-effective for feature film, television and commercial producers
given the periods of inactivity typically experienced between productions.
By renting camera systems from Panavision, its customers are ensured
continual access to state-of-the-art equipment as well as the availability
of the proper equipment combinations for each specific project.

         In addition to manufacturing and renting camera systems,
Panavision also has rental operations providing lighting, lighting grip,
power distribution, generation and related transportation equipment. These
operations include Lee Lighting, the largest lighting rental company in the
United Kingdom, as well as other owned-and-operated facilities in Toronto,
Canada and Australia. Recently, Lee Lighting has supplied the lighting
needs of such major films as HARRY POTTER AND THE SORCERER'S STONE, TOMB
RAIDER and GLADIATOR. Panavision also manufactures and sells lighting
filters and other color-correction and diffusion filters through its Lee
Filters operation.

         The Company believes that Panavision is well positioned to take
advantage of the emerging markets for the capture of images in digital
format and the use of digital technologies for post production work. See
"Market Overview--Digital" for a description of the digital market.
Panavision offers a complete state-of-the-art high definition digital
camera system, comprised of a modified version of Sony's 24P CINEALTA(TM)
high definition digital camera coupled with Panavision's new series of
specially designed PRIMO DIGITAL(TM) lenses and other accessories for use
in the motion picture and television industries. Panavision accesses the
Sony high definition digital cameras through DHD Ventures LLC, a joint
venture established in July 2000 with Sony Electronics Inc. The
Sony/Panavision system has been used on a variety of feature films, series
television programs and commercials, including the first digital major
feature film, STAR WARS EPISODE II.

         Panavision entered the post production segment of the digital
market when, in July 2001, it began operating EFILM pursuant to various
agreements with Las Palmas Productions, Inc. ("Las Palmas"), a subsidiary
of the Company. Using proprietary software that the Company believes
distinguishes EFILM from its competitors, EFILM provides the
post-production services of (i) high-resolution scanning of film, (ii)
digital color timing, (iii) laser film recording of digital video and high
definition images to film, and (iv) digital mastering to the major film
studios, independent filmmakers, advertisers, animators, large format
filmmakers and restoration clients. EFILM has worked on such films as
TITANIC and the upcoming releases of SPIDERMAN and the third film in the
AUSTIN POWERS series.

         Panavision was incorporated in Delaware in 1990. Predecessors of
Panavision have been engaged in the design and manufacturing of
cinematography equipment since 1954. Panavision's principal executive
office is located at 6219 De Soto Avenue, Woodland Hills, California 91367
and its telephone number is (818) 316-1000.

Market Overview

         The demand for cinematographic equipment is driven by the number
and complexity of feature films, television programs and commercials being
produced. Increases in the number of action films and special effects in
feature film and television productions increases the range and volume of
equipment required and lengthens the rental period. Increases in the number
of television networks and channels and in the networks' demand for
original programming has also driven the increased use of camera systems.

Feature Films

         Panavision views feature films in two categories: major studio
features and independent features. Major studio features are typically
large-budget productions requiring a greater range and volume of camera and
lighting equipment, thus providing the greater revenue potential for
Panavision. The average feature film rental is for 10 to 12 weeks.

         The camera and lighting rental revenue potential from feature
films is dependent on the number and types of productions filmed in any
given year. Since 1995, major studio feature film starts per year have
ranged from as low as 101 to as high as 146. In 2001, Panavision estimates
that major studio film starts were 115. Panavision estimates that worldwide
independent English-speaking feature film starts since 1995 have ranged
from 208 to 576. In 2001, Panavision estimates that independent
English-speaking feature film starts were 208.

Episodic Television

         The episodic or "series" television market in North America is
comprised primarily of dramas, situation comedies and action programs
produced on film which are aired in both prime and non-prime time slots.
These programs are broadcast on the major television networks as well as on
cable networks. The average series television program rental is for 26
weeks, Panavision has been established for many years as the market leader,
supplying equipment to over 75% of North American prime time series
television productions produced on film. The Company believes that
Panavision will continue to be a strong supplier to this market as it
continues to offer its customized equipment designed for television
productions which the Company believes provides both economic and
qualitative benefits to Panavision's customers.

Commercials

         Although the production of a commercial generally lasts for only
one to seven days, daily rental rates for camera systems are equivalent to
feature film rental rates and represent a significant part of the camera
equipment rental market worldwide. Many of the creative people involved in
the filming of commercials seek to distinguish their products by using
innovative techniques requiring technologically advanced equipment--the
ability to achieve a unique "look," which Panavision believes can, in many
cases, be achieved best by using Panavision products. By pursuing
opportunities to expand its presence in the television commercial market,
Panavision believes that it can develop brand loyalty to Panavision
products and beneficial long-term relationships with directors and
cinematographers, many of whom begin their careers filming television
commercials.

Digital

         The production of feature films involves three distinct phases:
(1) image capture, (2) post production, and (3) distribution and
exhibition.

         Image Capture. Image capture refers to the recording of images in
         a camera. Currently, major theatrical productions are
         predominantly captured on 35mm film although, with recent
         advancements in digital equipment, digital capture may become more
         prevalent in the future. Since the camera lens is the most
         important factor in image quality the Company believes that the
         superior quality of Panavision's PRIMO DIGITAL(TM) lenses that
         Panavision couples with Sony's 24P CINEALTA(TM) high definition
         digital camera and currently offers to the motion picture and
         television industries positions Panavision to compete effectively
         if digital becomes the capture medium of choice.

         Post Production. At the conclusion of production, the captured
         images are then processed in a variety of steps including color
         timing, the insertion of digital effects, and titling. The post
         production phase has traditionally been a chemical laboratory
         process, but this may change over time with the advent of the
         digital intermediate. In the digital intermediate process, film
         negatives are scanned into the computer using high resolution
         scanning equipment and remains in the digital format throughout
         the post production process. This method provides a significant
         improvement in the quality of theatrical release prints because
         when the images are converted to a digital format it does not
         suffer the significant degradation that occurs in the traditional
         film laboratory chemical process. EFILM's use of the digital
         intermediate process on both 35mm negatives and digital positions
         Panavision to take advantage of the growing post production
         segment of the digital market.

         Distribution/Exhibition. The exhibition phase refers to the medium
         used to transfer and show the images the ultimate viewer. In the
         example of a theatrical release, it refers to film or digital
         projection. Regardless of the speed of implementation of digital
         projection or whether digital projection is implemented at all,
         the choice of the exhibition medium will have limited impact on
         either the capture or post production decisions. This is because
         digital images in the post production phase may readily be
         recorded back to a 35mm negative, or any other distribution medium
         such as HD master, DVD, VHS and television master.

Growth Strategy

         Panavision intends to pursue the following strategies to grow and
enhance its position as the leading designer, manufacturer and supplier of
high precision film camera systems for the motion picture and television
industries.

         Increase Camera System Package Size. Panavision continues to focus
         its development efforts on value-added accessories that increase
         the overall size and rental price of a camera package. Since the
         average cost of camera rental represents less than 1% of the
         average major feature film budget, Panavision believes customers
         tend to place a higher priority on quality of service and the
         availability of a broad range of technologically superior
         equipment than on price considerations. In addition, films with
         more complex and extensive special effects, such as THE MATRIX and
         film series such as STAR WARS, require more expensive camera
         packages with more cameras, more lenses and value-added
         accessories. As an example of Panavision's ability to meet the
         needs of more complex films, it has provided the camera system for
         every JAMES BOND film ever made.

         Develop New Products. Panavision intends to continue developing
         and manufacturing technologically superior cameras, lenses and
         accessories. Panavision's research and development group is
         currently comprised of mechanical, software, electronic and
         optical engineers, draftsmen and machinists. Additionally, the
         research and development group has a dedicated machine shop that
         manufactures prototype equipment. These internal capabilities
         enable Panavision to develop proprietary technology in
         collaboration with filmmakers to address their unique requirements
         and position Panavision to develop new products.

            o     HD Digital Camera Systems. Panavision offers a complete
                  state-of-the-art high definition digital camera system
                  comprised of a modified version of Sony's 24P
                  CINEALTA(TM) high definition digital camera coupled with
                  Panavision's new series of specially designed PRIMO
                  DIGITAL(TM) lenses and other accessories. Panavision has
                  designed this system to simulate a film system so that
                  traditional film crews are comfortable with using the
                  medium. The PRIMO DIGITAL(TM) lenses represent
                  significant technological breakthroughs providing
                  extremely high performance, which the Company believes
                  will provide Panavision with the opportunity to build on
                  its leadership position.

            o     Broadcast Lenses. Panavision has developed significant
                  expertise in the design, development and manufacture of
                  high performance lenses used in the feature film, series
                  television and commercial markets. The Company believes
                  this expertise uniquely positions Panavision to pursue
                  new opportunities in the optical field for Panavision
                  outside of its existing markets. Panavision's strategy is
                  to seek out markets and products where high performance
                  optics add value and can drive high margins. The first
                  niche market Panavision has identified is high zoom range
                  lenses for the sports broadcast market. Present lens
                  technology has maximum performance at 90:1 magnification.
                  Using a breakthrough design technology, Panavision has
                  designed a lens that may significantly outperform its
                  competitor's products. Panavision expects these lenses to
                  be available to customers beginning in 2003.

         EFILM. EFILM has been a pioneer in the digital post production
         market with the evolution of the digital intermediate process. A
         digital intermediate replaces the portion of post production that
         currently uses a film laboratory chemical process. In the digital
         intermediate process, the film negative is scanned into a computer
         using high resolution scanning equipment and remains in a digital
         format throughout the processes of color timing, insertion of
         digital effects, opticals and titles. The digital intermediate
         process provides a significant improvement in quality of
         theatrical release prints because when the image is converted to a
         digital format it does not suffer the significant degradation that
         occurs in the traditional film laboratory chemical process. The
         digital process also provides the ability to creatively color time
         and selectively add color and effects to any frame of film in a
         manner previously not possible in film processing. This results in
         a digital master that can be used to provide all distribution
         mediums. For cinema release, the digital master is recorded back
         to 35mm negative. The digital master can also be used to create a
         digital cinema release, HD master, DVD, VHS and television master.
         WE WERE SOLDIERS used the EFILM digital intermediate process.
         Panavision believes that the digital intermediate process will
         replace film intermediates over the next few years for images
         captured on film as well as images captured digitally.

Camera Rental Operations

         Panavision supplies cinematographic equipment, such as cameras,
lenses and accessories, to its customers on a project-by-project basis.
Panavision has a rental inventory of thousands of cameras and lenses, as
well as associated accessories (including non-Panavision manufactured
equipment). Located throughout North America, Europe and the Asia Pacific
region, Panavision rents its equipment through its network of
owned-and-operated rental facilities and independent agents. This network
provides Panavision with a competitive advantage, as it is the only rental
company that offers clients equipment and service on a national and
worldwide basis.

Camera System Products

         Panavision is the only provider of camera systems with an
integrated design that provides customers with compatible products that are
available worldwide. Each camera package rented for a project is comprised
of a number of camera systems, each of which includes a camera, lenses and
accessories. A cinematographer's needs may include a sync-sound camera,
such as the Platinum PANAFLEX(R) and a high-speed PANASTAR(R) camera. Each
camera's rental price includes a variety of accessories such as eyepieces,
viewfinders, cables and brackets.

         Film Cameras. There are two basic types of motion picture
         cameras--Synchronous, or "sync-sound," and Mit Out Sound (MOS).
         Sync-sound cameras are used to shoot pictures while recording
         dialogue. MOS cameras are used primarily to shoot high-speed
         footage and special effects and may also be used as backup cameras
         in situations where dialogue is not being recorded. Panavision's
         camera inventory consists of both sync-sound and MOS cameras with
         various features and at a range of prices. While the majority of
         Panavision's sync-sound cameras are 35mm cameras, Panavision also
         has 16mm cameras, which are used primarily to film episodic
         television shows, and 65mm cameras, which are used primarily to
         film special effects and special venue presentations.

         Panavision's inventory also includes a number of non-Panavision
         cameras that are used to supplement Panavision's product line. Due
         to its ability to purchase non-Panavision cameras if there is a
         business need to do so, Panavision is able to compete with
         independent renters of cinematography equipment on the same level
         and with the same equipment. Its competitors, on the other hand,
         do not have the corresponding ability to purchase Panavision
         equipment, as Panavision equipment is not available to rental
         companies other than Panavision's agents.

         Film Lenses. Panavision develops, designs and manufactures its own
         prime (fixed focal length) and zoom lenses, the most critical
         component affecting picture quality and an important consideration
         for the filmmaker. For many years, Panavision specialized in
         anamorphic lenses, which are used for the wide-screen movie
         format. While Panavision remains the world's leading supplier of
         these lenses, it also designed and developed another series of
         prime and zoom lenses specifically for cinematography
         applications. Panavision created a line of advanced spherical
         lenses for the non-wide screen format, producing its proprietary
         PRIMO PRIME(R) and PRIMO ZOOM(R) lenses. The Primo lenses have
         performance characteristics that exceed the other lenses available
         in the marketplace.

         HD Digital Camera Systems. Panavision offers a complete high
         definition digital camera system comprised of a modified version
         of Sony's 24P CINEALTATM high definition digital camera coupled
         with Panavision's new series of specially designed PRIMO DIGITALTM
         lenses and other accessories. The PRIMO DIGITALTM lenses represent
         significant technological breakthroughs providing extremely high
         performance which the Company believes will provide Panavision
         with the opportunity to build on its leadership position for many
         years to come. In July 2000, Panavision established a joint
         venture with Sony which enables Panavision to offer this complete
         camera system. Under the operating agreement of DHD Ventures,
         Panavision and Sony have 51% and 49% ownership interests,
         respectively, and they have equal voting power. Pursuant to the
         operating agreement and various related agreements, DHD Ventures
         purchases high definition digital cameras from Sony and rents
         these camera and other camera related equipment exclusively to
         Panavision. Pursuant to the operating agreement, if Panavision
         undergoes a change of control involving one of Sony's competitors,
         Panavision may be required to purchase 49% of Sony's interest in
         the venture. In connection with this joint venture, Sony purchased
         714,300 shares of Panavision common stock and obtained a presently
         exercisable warrant to purchase an additional 714,300 shares of
         Panavision common stock. Panavision and Sony also entered into a
         registration rights agreement which grants to Sony demand
         registration rights under the Securities Act of 1933, as amended,
         subject to certain limitations and conditions, for the shares of
         Panavision common stock that Sony has purchased and for any
         Panavision common stock it acquires upon exercise of its warrant.
         Panavision's development arrangement with Sony is intended to
         allow Panavision to stay at the forefront of proprietary digital
         camera technology.

         Accessories. In order to provide its customers with a fully
         integrated camera system, Panavision frequently introduces new
         camera accessories and currently offers an extensive range of
         products requested by and developed in conjunction with
         filmmakers. Certain accessories may reduce overall production
         costs by lowering the labor intensiveness of the production
         process and thereby decreasing the shooting days. Moreover, an
         accessory product often achieves such widespread acceptance among
         Panavision's customers that Panavision incorporates it into the
         base camera package, thereby increasing the rental price of the
         overall package.

Research and Product Development

         Panavision's research and development group is comprised of
mechanical, software, electronic and optical engineers, draftsmen and
machinists. Additionally, the research and development group has a
dedicated machine shop that manufactures prototype equipment. These
internal capabilities enable Panavision to develop proprietary technology
in collaboration with filmmakers to address their unique requirements.
Panavision has long been a leader in the research and development of film
camera lenses. Since the first Panavision lens was introduced in 1957,
Panavision has introduced many innovative spherical and anamorphic lenses,
including the Primo series, which won Academy Awards in 2002, 1999, 1995,
1994, 1991 and 1990. In 2000, Panavision launched a new series of specially
designed PRIMO DIGITALTM lenses for use with the Sony 24P CINEALTATM
digital camera. These lenses are among the most sophisticated and highest
performing lenses Panavision has ever produced.

         Research and development expense for the years ended 2001, 2000,
and 1999 was $5.0 million, $6.2 million and $6.1 million, respectively.

Manufacturing and Assembly

         Panavision manufactures cameras, lenses and accessories designed
by Panavision's in-house research and development staff. Panavision has
approximately 240 non-union employees at its 150,000 square foot
manufacturing facility in Woodland Hills, California, located near
Hollywood.

         Panavision develops and designs all the critical components for
its camera systems, including the camera movement and lens. An entire
camera system consists of hundreds of parts, each carefully produced,
assembled and tested. The manufacturing process takes up to four months and
primarily involves the fabrication and assembly of camera and lens
components by highly skilled workers, each of whom generally has an area of
specialization. Following the assembly process, each camera system is
rigorously tested to achieve the high standard of performance that
customers expect from Panavision.

         While Panavision manufactures most of the components internally,
certain components and subassembly work, including glass grinding, lens
element polishing and die casting, are outsourced to selected suppliers.
Panavision has developed long-standing relationships with its significant
suppliers and believes that they will continue to supply high-quality
products in quantities sufficient to satisfy its requirements. Since
certain components, particularly the lens element, require long lead times,
precise production schedules are critical. Inventory levels are determined
based on input from marketing, operations and the agent network. Panavision
maintains a fairly constant production schedule in order to efficiently
utilize its resources and service its customers' requirements.

Marketing and Customer Service

         The principal decision-makers in the selection of the camera
packages are cinematographers, directors and producers, who view their
cameras and related equipment as critical artistic tools. Camera packages
typically comprise a very small percentage of a production budget.
Accordingly, absent budget constraints, the selection of equipment is
driven by its suitability, technological capabilities and reliability, as
well as by the degree to which the manufacturer or renter is able to
rapidly service the technical needs of the filmmaker, both before and
during film production.

         Panavision's skilled sales representatives have established close
working relationships with numerous filmmakers. To cultivate these
relationships, Panavision assigns to each production a sales representative
who possesses skills and experience appropriate to the needs of that
production. Based on discussions with the filmmaker, the sales
representative recommends a camera package tailored to achieve the
filmmaker's desired visual effect and meet the production's budget. In
addition, sales representatives provide further advice and support by
visiting film production sites throughout the production. As a result of
providing high-quality customer service, many of Panavision's
representatives have been working with the same filmmakers throughout their
careers and in many instances the collaborative effort with the filmmaker
has prompted the design of innovative camera systems and accessories.

         After preliminary decisions have been made with respect to the
proper camera package, the camera equipment is delivered to a preparation
room in one of Panavision's facilities reserved for that filmmaker. The
filmmaker, together with his or her own and Panavision's representatives,
then inspects, tests and experiments with the equipment at the facility's
prep floor, sound stage, film studio and screening room.

Distribution

         Camera packages are rented to the motion picture and television
industries through rental offices owned and operated by Panavision as well
as by independent agents. These rental offices serve as a single point of
contact for the cinematographers and often provide services including
maintenance and technical advice. Panavision is the only manufacturer to
have a significant portion of its revenue generated through
owned-and-operated rental houses, primarily because of Panavision's choice
not to sell its equipment. Panavision does not currently intend to begin
selling its camera systems.

         Panavision owns and operates camera rental and camera and lighting
rental facilities worldwide in North America, Europe and the Asia Pacific
region.

         In addition to its owned-and-operated facilities, Panavision
serves its customers through a network of domestic and international
third-party agents who are responsible for the rental of Panavision's
equipment in locations that are not serviced by the owned-and-operated
facilities. Agents pay approximately 60% of their rental revenue to
Panavision and retain the balance, which is charged as a commission expense
in Panavision's statement of operations. All of Panavision's agents are
well trained in the use of Panavision equipment and are supported by
Panavision's technical staff.

Competitive Strengths

         Panavision's leading market position in film production is
demonstrated by its premier brand name recognition and strong market share
of the major studio feature films worldwide and North American episodic
television programs. Panavision's leading position results from the
following competitive strengths, which it believes provide substantial
barriers to entry into Panavision's business.

         Reputation for Quality and Technologically Advanced Products.
         Panavision is recognized in the motion picture and television
         industries as the preeminent brand name for cinematography
         equipment and the industry leader in the development of high
         quality, technologically advanced camera systems, lenses and
         accessories. Since its inception in 1954, Panavision has
         continually introduced camera systems, lenses and accessories that
         have become industry standards. Panavision has been awarded two
         OSCAR(R)s and 23 other Academy Awards granted for Scientific and
         Technical Achievement, including a 2002 award for the PRIMO MACRO
         ZOOM(R) lens, a 2001 award for the MILLENNIUM(R) XL camera system,
         a 2000 award for the MILLENNIUM(R) camera viewfinder, a 1999 award
         for the development of the Primo lens series, and a 1998 award for
         the Panavision/Frazier Lens System. Panavision has received two
         EMMY(R) awards, including one in July of 2000 for the development
         of the MILLENNIUM(R) XL camera system and another in 2001 for the
         development of the Primo lens series. Since 1990, nine
         cinematographers who have won the OSCAR for Best Cinematography,
         including the cinematographers of AMERICAN BEAUTY, SAVING PRIVATE
         RYAN and TITANIC, used Panavision camera systems.

         Range and Breadth of Camera Equipment. Panavision believes that it
         has the world's largest inventory of camera systems, with
         thousands of cameras and lenses. It also offers a broad range of
         choices, including equipment that is exclusively available through
         Panavision and its agents as well as equipment manufactured by
         others. Panavision is able to upgrade its existing inventory to
         meet continually changing market demands, thereby reducing
         obsolescence, achieving better control of inventory and product
         availability and providing Panavision's customers with access to
         the latest technological advances. The Company believes that the
         range and breadth of Panavision's camera inventory enable it to
         provide camera systems to a greater number of film productions
         throughout the world than any of its competitors and to serve
         multiple large-scale feature film productions simultaneously.

         Long-Lasting Relationships with Filmmakers. As a result of
         Panavision's significant relationships with cinematographers,
         directors and producers and its leading market position,
         Panavision gains early access to productions and often is able to
         influence the selection of camera systems. These relationships
         foster a cooperative effort to design and produce unique systems
         and accessories that meet filmmakers' creative needs.
         Additionally, Panavision offers instruction and training in the
         handling of Panavision equipment to young directors and
         cinematographers while they are still in film school and
         thereafter, thereby developing loyalty to Panavision and providing
         a foundation for Panavision to sustain its strong market position.
         In addition, Panavision is the only major manufacturer of cameras
         and lenses in the Hollywood area, enabling Panavision to maintain
         its close relationships with Hollywood filmmakers and to respond
         rapidly to its customers' needs.

         Unique Manufacturing and Distribution Model. Panavision is the
         only vertically integrated provider of camera systems, lenses, and
         accessories to the film network television and television
         commercial industries. By renting camera systems from Panavision,
         its customers are ensured continual access to state-of-the-art
         equipment as well as the availability of the proper equipment
         combinations for each specific project. Panavision's control over
         the design, development, manufacturing and distribution processes
         enables it to (i) rapidly incorporate technological developments
         and filmmakers' suggestions into new products, (ii) maintain
         product exclusivity and (iii) offer products with greater quality
         and higher performance at a premium price.

         Dedication to Customer Service. Panavision's customer service,
         repair and maintenance personnel are "on call" and available to
         assist customers 24 hours a day. In order to provide filmmakers
         with a high level of support, Panavision sends marketing
         representatives and technicians to film production sets to provide
         advice or immediate assistance with any equipment needs or
         questions. Panavision assigns to each production a sales
         representative who possesses skills and experience appropriate to
         the needs of that production in an attempt to foster a strong and
         lasting working relationship with the customer. In addition, as
         part of its customer service activities, Panavision often
         develops, customizes or procures equipment for specific customers
         or projects. Central to Panavision's customer service philosophy
         is its maintenance and repair term, which services all equipment
         between projects to ensure the quality and reliability of
         Panavision's equipment.

         Worldwide Distribution Network. Panavision is the only camera and
         lighting operation with an extensive worldwide distribution
         network, including 28 owned and operated facilities throughout
         North America, Europe and the Asia Pacific region. These
         facilities offer a large inventory of rental equipment, on-site
         technical expertise, knowledgeable market specialization in
         feature films, episodic television, and commercials and strong
         customer support. Panavision also serves its customers through a
         network of 26 international third-party agent offices, who are
         responsible for the rental of Panavision's equipment in locations
         that are not served by its owned and operated facilities.
         Panavision's extensive network for the distribution of its
         products instills confidence in its customers that they can
         receive the level of quality and customer service they expect from
         Panavision for their cinematography equipment needs worldwide.

         Experienced Management. Panavision's management team provides
         depth and continuity of experience, with an average of 20 years of
         industry experience. Panavision's senior management has developed
         relationships over many years with influential individuals in the
         motion picture and television industries, a central aspect of its
         ability to maintain its strong market share. Panavision's
         management team has also been instrumental in developing new
         technologies in the industry.

Competition

         The market for high-precision cinematography equipment is highly
competitive, primarily driven by technology, customer service and price. As
a manufacturer of cinematography equipment, Panavision has one primary
competitor, Arriflex, based in Munich, Germany. Arriflex manufactures only
cameras and certain accessories, primarily for sale to rental houses and
individuals that are not the end users. Because Panavision manufactures
lenses, cameras, and a full range of accessories, has close relationships
with filmmakers and has in-house design and manufacturing capabilities, the
Company believes that Panavision is better able to develop the innovative
camera systems demanded by its customers.

         As a renter of cinematography equipment, Panavision competes with
numerous rental facilities, which must purchase their equipment from other
manufacturers and then rent that equipment to their customers. While the
overall rental business is price competitive and subject to discounting,
Panavision has chosen to compete on the basis of its large inventory base,
technologically advanced proprietary products, broad product line,
extensive sales and marketing force and commitment to customer service.
Panavision believes that it, as both the manufacturer and rental house, is
able to respond to many user requests on shorter notice and more
effectively than its rental competitors. In addition to its existing
competitors, Panavision may encounter competition from new competitors, as
well as from new types of equipment, such as digital cameras. Although the
Company believes that, through Panavision's joint venture with Sony, DHD
Ventures, Panavision is well positioned to capitalize on potential growth
in the digital capture market, it is new and the Company cannot predict
whether or how quickly the rental market for digital cameras will grow.

Lighting Rental Operations

         In addition to manufacturing and renting camera systems,
Panavision rents lighting, lighting grip, transportation and distribution
equipment and mobile generators used in the production of feature films,
television programs and commercials, outside broadcasts and other events
from its owned-and-operated facilities located in the United Kingdom,
Toronto, Canada and Australia. Panavision's extensive inventory of lighting
equipment enables various lighting operations to service projects with
large-scale equipment and personnel requirements, such as feature films,
while still maintaining sufficient capacity to service other projects
simultaneously. Panavision's worldwide lighting rental operations employ
senior management who have developed relationships over many years with
influential individuals in the motion picture and television industries.
Under this management there is a sizable field force of gaffers and
electricians who work exclusively with Panavision.

         These operations include Lee Lighting, the largest lighting rental
operation in the United Kingdom. It maintains the largest rental asset base
of lighting equipment, transport, mobile generators and power distribution
equipment in the United Kingdom. Lee Lighting currently has the largest
inventory of lampheads, the core element of lighting equipment used by
filmmakers in all areas of the industry, in the United Kingdom.

         Lee Lighting operates lighting rental operations in London,
Bristol and Manchester, England and Glasgow, Scotland, each of which has
its own rental inventories. From these four locations, Lee Lighting is able
to service any production in England, Wales or Scotland. In addition, Lee
Lighting maintains a rental base at Shepperton Studios, the second largest
studio complex in the United Kingdom for the production of feature films.
Lee Lighting is the only lighting company in the United Kingdom that
supplies its own electricians in connection with the rental of its
equipment. This service force is on call 24 hours a day, seven days a week
and is supplemented by freelance labor when required.

         In 1999, Panavision expanded its lighting business geographically
into Australia through the acquisition of lighting assets from several
small local lighting rental operations. The lighting assets were acquired
primarily in the second quarter of 1999.

Competition

         Panavision's lighting rental operations service both the motion
picture and television industries, including studio programs, outside
broadcasts and commercials. These markets require a similar range of
lighting productions and related support equipment; however, feature films
and episodic television programs generally require larger equipment
packages than commercials. The composition of equipment packages is
frequently determined by the producer, director or cinematographer, who may
desire a specific type of image or lighting effect. Although Panavision's
worldwide inventory of lighting equipment is extensive, the lighting rental
market is price competitive. Because film and television productions tend
to rent lighting equipment from rental agencies in the territories where
the productions are filmed, the rental revenue generated from Panavision's
lighting rental operations depends on the number of feature films,
television programs and commercials being filmed in the areas near its
operations.

Sales and Other Operations

         Panavision manufactures and sells lighting filters through its Lee
Filters operations in the United Kingdom and the United States. Panavision
also operates the EFILM digital laboratories in the United States. In
addition, Panavision sells various consumable products such as film stock,
light bulbs and gaffer tape, which are used in all types of production.

         Lee Filters is a manufacturer of light control media for the
motion picture, television and theater industries. The majority of Lee
Filters' business is the sale of filters or gels used by lighting directors
to control or correct lighting conditions during productions. Lighting
filter distribution, on a worldwide basis, is handled primarily through a
network of third-party dealers who have been selected because of their
specific knowledge of the filters market in their respective countries. In
the United Kingdom, Lee Filters sells on a direct basis to end users and
rental houses as well as to distributors and dealers.

         EFILM provides the following post-production services: (i)
high-resolution scanning of film, (ii) digital color timing, (iii) laser
film recording of digital video and high definition images to film, and
(iv) digital mastering. EFILM serves the major film studios, independent
filmmakers, advertisers, animators, large format filmmakers and restoration
clients. The EFILM digital laboratories are located in Hollywood.

Intellectual Property

         Panavision relies on a combination of patents, licensing
arrangements, trade names, trademarks, service marks, trade secrets,
know-how and proprietary technology and trade secrets to protect its
intellectual property rights. Panavision owns or has been assigned or
licensed domestic and foreign patents and patent applications relating to
its cameras, lenses and accessories. Panavision also owns or has been
assigned several domestic and foreign trademark or service mark
registrations including PANAVISION(R), PANAFLEX(R), PANAHEAD(R),
PANALITE(R), PANAVID(R), PANASTAR(R), PRIMO ZOOM(R), PRIMO MACRO ZOOM(R),
PRIMO-L(R), PRIMO DIGITALTM, 3-PERF(R), MILLENNIUM(R) and ULTRAVIEW(R),
which, collectively, are material to its business.

Environmental Matters

         Panavision is subject to foreign, federal, state and local
environmental laws and regulations relating to the use, storage, handling,
generation, transportation, emission, discharge, disposal and remediation
of hazardous and non-hazardous substances, materials and wastes (the
"Environmental Laws"). Panavision also is subject to laws and regulations
relating to worker health and safety. The Company believes that
Panavision's operations are in substantial compliance with all applicable
Environmental Laws. Although no material capital or operating expenditures
relating to environmental controls or other environmental matters are
currently anticipated, there can be no assurance that Panavision will not
incur costs in the future relating to environmental matters that would have
a material adverse effect on Panavision's business or financial condition.

Employees

         As of December 31, 2001, Panavision had approximately 1,100
full-time employees, consisting of 440 employees based in North America,
530 employees based in Europe, and 130 employees based in the Asia Pacific
region. Panavision is not a party to any collective bargaining agreement.
The Company believes that Panavision's relationships with its employees are
good.

Item 2.  Properties

         The Company's principal properties are as follows:

Mafco Worldwide

<TABLE>
<CAPTION>

                                                                                Owned          Approximate
                                                                                or             Floor Space
Location                        Use                                             Leased         (Square Feet)

<S>                             <C>                                             <C>             <C>
Camden, New Jersey              Licorice manufacturing, warehousing and         Owned                390,000
                                administration
Pennsauken, New Jersey          Warehousing                                     Leased(a)             40,000
Camden, New Jersey              Warehousing                                     Leased(b)             48,000
Gardanne, France                Licorice manufacturing and administration       Owned                 48,900
Richmond, Virginia              Manufacturing and administration for            Owned                 65,000
                                non-licorice products
Shaanxi, China                  Licorice manufacturing and administration       Owned(c)              28,300

----------------------
(a)  Lease expires in September 2005 with an option to renew to 2007.
(b)  Lease expires in December 2004 with options to renew to 2006.
(c)  The land that the Chinese factory occupies comprises 5,546 sq. meters and is leased until 2009.
</TABLE>

Panavision

         Panavision's headquarters and principal manufacturing facility are
located at its 150,000 square-foot facility in Woodland Hills, California.
Panavision operates domestic rental facilities in Woodland Hills,
Hollywood, Chicago, Dallas, Orlando and Wilmington. To service its
international markets, Panavision operates rental facilities in Toronto and
Vancouver, Canada; Dublin, Ireland; London (two) and Manchester, England;
Glasgow, Scotland; Paris (two) and Marseilles, France; Prague, Czech
Republic; Warsaw, Poland; Sydney (two), Queensland and Melbourne,
Australia; and Auckland and Wellington, New Zealand. Lee Lighting operates
rental facilities in London, Bristol and Manchester, England and Glasgow
and Edinburgh, Scotland. Lee Filters has a sales operation in Burbank,
California, as well as a manufacturing facility located in Andover,
England. All of Panavision's facilities are leased, with the exception of a
small fabricating facility in Moss Vale, Australia and a facility located
in Glasgow, Scotland, which are owned.

Item 3.  Legal Proceedings

         Various legal proceedings, claims and investigations are pending
against M & F Worldwide and Pneumo Abex, including those relating to
commercial transactions, product liability, safety and health matters and
other matters. M & F Worldwide and Pneumo Abex are involved in various
stages of legal proceedings, claims, investigations and cleanup relating to
environmental or natural resource matters, some of which relate to waste
disposal sites. Most of these matters are covered by insurance, subject to
deductibles and maximum limits, and by third-party indemnities.

         The former Aerospace business of the Company formerly sold certain
of its aerospace products to the U.S. Government or to private contractors
for the U.S. Government. Certain claims for allegedly defective pricing
made by the U.S. Government with respect to certain of these aerospace
product sales were retained by Pneumo Abex in the Aerospace sale and remain
outstanding. In each case Pneumo Abex contests the allegations made by the
U.S. Government and has been attempting to resolve these matters without
litigation.

         The Company believes that the outcome of such pending legal
proceedings in the aggregate will not have a material adverse effect on the
Company's consolidated financial position or results of operations. The
Company carries general liability insurance but has no health hazard
policy, which, to the best of the Company's knowledge, is consistent with
industry practice.

         In November 2000, five purported derivative and/or class actions
were filed in New Castle County, Delaware Chancery Court against the
Company, its board of directors and, in one case, Holdings and MCG. These
actions, as well as a similar action filed in New York County, New York
Supreme Court, challenged as unfair to the Company's public shareholders
the original proposal to sell to the Company the stake in Panavision then
indirectly owned by Holdings. Following consummation of the Panavision
transaction in April 2001, the five Delaware actions were consolidated
under the caption In re M & F Worldwide Corp. Shareholders Litigation, C.A.
No. 18502-NC (the "Consolidated Action"), the operative complaint in the
Consolidated Action was amended to challenge the transaction as
consummated, and another shareholder filed a related action in the Delaware
Chancery Court, captioned Vannini v. Perelman, et al., C.A. No. 18850-NC.
The operative complaints sought, among other things, rescission of the
transaction, damages, a declaratory judgment that the transaction was
unfair as to process and as to price, and plaintiffs' costs and attorneys'
fees. The Company and the parties to the Vannini action settled that
litigation, pursuant to which, among other things, the Company acquired one
million shares of Company common stock held by the plaintiff, the plaintiff
dismissed his claim with prejudice, and the Company agreed to pay to
plaintiff $10.0 million plus up to $1.0 million for reimbursement of his
legal costs. The Company recorded treasury stock of $6.5 million and
shareholder litigation settlement expense of $4.5 million in connection
with the Vannini settlement. After the Vannini settlement, plaintiffs in
the Consolidated Action commenced a separate derivative action in the
Delaware Chancery Court against the Company's directors and Holdings
challenging the settlement as a breach of fiduciary duty.

         In January 2002, during the trial of the Consolidated Action, the
defendants and certain of the plaintiffs reached an agreement in principle,
which agreement has subsequently been reduced to a definitive written
agreement, concerning the settlement and ultimate dismissal of the
Consolidated Action and the action challenging the Vannini settlement. The
principal terms of the agreement, which are subject to court approval, are
as follows:

         o        Shareholders who held Company common stock on April 19,
                  2001 and who continue to hold through the date of the
                  settlement hearing (the "Settlement Class") will be
                  entitled to obtain up to $2.15 per share, with the amount
                  being reduced proportionately if necessary so that the
                  total payout will not exceed $12 million (the "Settlement
                  Fund").

         o        Counsel for the Settlement Class will receive attorneys'
                  fees and expenses as awarded by the court, up to $2.75
                  million.

         o        All decisions contemplated to be made by the Company
                  under that certain letter agreement dated April 19, 2001
                  between the Company and the sole shareholder of Holdings
                  shall be made by a committee of Company directors who are
                  and were not directly or indirectly employed by such sole
                  shareholder and are otherwise disinterested (the
                  "Independent Committee").

         o        Defendants in the Consolidated Action shall not make, or
                  cause or permit their affiliates to make, any future
                  purchase of the Existing Notes of Panavision without
                  first offering to the Company the opportunity to make
                  such purchase, which opportunity shall be evaluated by
                  the Independent Committee.

         o        The Company shall have the right to purchase from
                  Holdings approximately $37.7 million principal amount at
                  maturity of Existing Notes at any time through the
                  maturity of such Existing Notes and in the sole
                  discretion of the Independent Committee, at a price equal
                  to the current holder's purchase price plus a reasonable
                  cost of carry.

         o        The Consolidated Action and the action challenging the
                  Vannini settlement shall be dismissed with prejudice, and
                  the Settlement Class shall provide to defendants a full
                  release of all claims relating to the subject of such
                  lawsuits or any corporate opportunity claim relating to
                  the purchase of Existing Notes by certain defendants or
                  their affiliates.

         Pursuant to agreements, the Settlement Fund is not the
responsibility of the Company and the cash portion of the settlement will
be funded entirely from insurance. As a result, the Company has neither
accrued any liability nor recorded a receivable from insurers as of
December 31, 2001. Certain of the named plaintiffs in the Consolidated
Action have indicated to the court that they intend to oppose the
settlement when it is presented for approval. While the Company believes
that the settlement is fair, reasonable and in the best interests of the
Company's shareholders, it can give no assurance that the court will
approve it.

         See Item 1. (C) Narrative description of business - Mafco
Worldwide - The Tobacco Industry; and Corporate Indemnification Matters.

         Panavision is not engaged in any legal proceeding other than
ordinary routine litigation incidental to its business. Panavision does not
believe that any such proceedings currently pending will have a material
adverse effect on its business or financial condition.

Item 4.  Submission of Matters to a Vote of Security Holders

         There were no matters submitted to a vote of security holders
during the fourth quarter of 2001.

                                  PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The M & F Worldwide Common Stock ("MFW Stock") is listed on the
New York Stock Exchange, Inc. ("NYSE") under the symbol MFW. The following
table sets forth, for the calendar quarters indicated, the high and low
closing prices per share of the MFW Stock on the NYSE based on published
financial sources.

                                                            High      Low
         Calendar 2000
                  First Quarter                            $5.56     $4.19
                  Second Quarter                            6.00      4.19
                  Third Quarter                             6.13      5.38
                  Fourth Quarter                            6.25      3.50
         Calendar 2001
                  First Quarter                             5.00      3.94
                  Second Quarter                            5.70      2.92
                  Third Quarter                             5.80      3.66
                  Fourth Quarter                            5.40      3.95

         The number of holders of record of the MFW Stock as of March 21,
2002 was approximately 12,898.

         The Company has not paid any cash dividends on the MFW Stock to
date nor does the Company currently intend to pay regular cash dividends on
the MFW Stock. The Company's dividend policy will be reviewed from time to
time by the Board of Directors in light of the Company's results of
operations and financial position and such other business considerations as
the Board of Directors considers relevant. The ability of Pneumo Abex and
Panavision to pay dividends to the Company is limited by their credit
agreements, which in turn may limit the ability of the Company to pay
dividends. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" and the Notes
to the Company's Consolidated Financial Statements included elsewhere in
this Annual Report on Form 10-K.

         In order to protect the availability of the Company's net
operating loss carryforwards, the Company's charter prohibits, subject to
certain exceptions, transfers of MFW Stock, until such date as fixed by the
Company's Board of Directors, to any person who owns, or after giving
effect to such transfer would own, at least 5% of the outstanding MFW
Stock. The Company has been advised by counsel that the transfer
restriction in the Company's charter is enforceable. The Company intends to
take all appropriate action to preserve the benefit of the restriction
including, if necessary, the institution of legal proceedings seeking
enforcement.

Item 6.  Selected Financial Data

         The table below reflects historical financial data which are
derived from the audited consolidated financial statements of M & F
Worldwide for each of the years in the five-year period ended December 31,
2001.

         On April 19, 2001, the Company acquired Panavision (see Note 1 and
Note 2 to the Company's Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K). The acquisition was
accounted for as a purchase and accordingly Panavision's results of
operations after April 19, 2001 are included in the Company's operating
results for the twelve months ended December 31, 2001.

         The selected financial data is not necessarily indicative of
results of future operations, and should be read in conjunction with Item
7. "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Company's Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>

                                                                           Year Ended December 31,
                                                       ----------------------------------------------------------------
                                                         2001         2000         1999         1998          1997
Statement of Operations Data:                                      (in millions, except per share amounts)
Net revenues

<S>                                                    <C>          <C>           <C>         <C>            <C>
     Panavision                                        $    125.0   $     -       $      -    $       -      $       -
     Mafco Worldwide                                        98.4        93.1          97.3        101.3          102.3
                                                       -----------  -----------  -----------  -----------  ------------
         Total revenues                                    223.4        93.1          97.3        101.3          102.3

Cost of revenues
     Panavison                                              72.1         -             -            -              -
     Mafco Worldwide                                        51.6        49.2          51.2         52.9           55.8
                                                       -----------  -----------  -----------  -----------  ------------
         Total cost of revenues                            123.7        49.2          51.2         52.9           55.8
                                                       -----------  -----------  -----------  -----------  ------------

     Gross profit                                           99.7        43.9          46.1         48.4           46.5

Selling, general and administrative expenses
     Panavision                                             46.6         -             -            -              -
     Mafco Worldwide                                        12.8         8.5          11.1         11.7           13.6
     Corporate                                               2.8         0.4           0.5          0.9            0.6
                                                       -----------  -----------  -----------  -----------  ------------
         Total selling, general and administrative
            expenses                                        62.2         8.9          11.6         12.6           14.2
Shareholder litigation settlement                            4.5         -             -            -              -
Gain on pension reversion                                  (11.1)        -             -            -              -
                                                       -----------  -----------  -----------  -----------  ------------

Operating income                                            44.1        35.0          34.5         35.8           32.3

Interest expense, net                                      (31.8)       (3.0)         (2.7)        (4.4)          (6.6)
Other (expense) income, net                                  -           0.2           0.1         (0.2)           0.3
                                                       -----------  -----------  -----------  -----------  ------------
Income before income taxes and net extraordinary gain       12.3        32.2          31.9         31.2           26.0
(Provision for) benefit from income taxes                  (10.5)      (13.1)        (12.8)         8.9           (3.4)
                                                       -----------  -----------  -----------  -----------  ------------
Income before net extraordinary gain                         1.8        19.1          19.1         40.1           22.6
Net extraordinary gain, net of taxes                         4.3        -              -            -              -
                                                       -----------  -----------  -----------  -----------  ------------
Net income                                                   6.1        19.1          19.1         40.1           22.6
Preferred stock dividends                                   (0.2)        -            (1.5)        (1.6)          (1.6)
                                                       -----------  -----------  -----------  -----------  ------------
Net income available to shareholders                   $     5.9    $   19.1     $    17.6    $    38.5    $      21.0
                                                       ===========  ===========  ===========  ===========  ============
Basic earnings per share:
     Common stock-undistributed earnings before net
         extraordinary gain                            $     0.06   $    0.96    $     0.85   $     1.86   $       1.01
     Common stock-undistributed net extraordinary gain       0.18        -                -          -              -
                                                       -----------  -----------  -----------  -----------  ------------
         Total common stock                            $     0.24   $    0.96    $     0.85   $     1.86   $       1.01
                                                       ===========  ===========  ===========  ===========  ============

Diluted earnings per share:
     Common stock-undistributed earnings before net
         extraordinary gain                            $     0.06   $    0.96    $     0.83   $     1.71   $       0.96
     Common stock-undistributed net extraordinary gain       0.18        -                -         -               -
                                                       -----------  -----------  -----------  -----------  ------------
         Total common stock                            $     0.24   $    0.96    $     0.83   $     1.71   $       0.96
                                                       ===========  ===========  ===========  ===========  ============
Basic and diluted earnings per preferred share:

     Preferred stock-distributed earnings              $     0.05   $    -       $     -      $     -      $       -
     Preferred stock-undistributed earnings before
         net extraordinary gain                              0.06        -             -            -              -
     Preferred stock-undistributed net extraordinary
         gain                                                0.18        -             -            -              -
                                                       -----------  -----------  -----------  -----------  ------------
         Total preferred stock                         $     0.29   $    -       $     -      $     -      $      -
                                                       ===========  ===========  ===========  ===========  ============


                                                                           Year Ended December 31,
                                                       ----------------------------------------------------------------
                                                         2001          2000        1999         1998          1997
                                                       ----------    ---------   ---------  -------------  ------------
Balance Sheet Data:                                                             (in millions)

Total assets (a)                                       $  912.1      $   298.8   $   311.4    $  322.3      $    313.1
Long-term debt including current portion and
   short-term borrowings (b)                              544.9           29.4        49.0        53.3            77.6
Redeemable preferred stock (c)                              -              -           -          20.0            20.0
Participating preferred stock (d)                          41.7            -           -           -                -
Stockholders' equity                                      295.9          245.7       236.9       223.1           185.6

---------------
(a)  Includes the assets of Panavision of $601.2 million at December 31, 2001.

(b)  Includes Panavision long-term debt of $460.9 million and Mafco
     Worldwide long-term debt of $84.0 million at December 31, 2001.

(c)  The redeemable convertible preferred stock was redeemed at its
     liquidation value of $20.0 million on December 6, 1999.

(d)  In connection with the Panavision Acquisition, the Company issued
     6,182,153 shares of Series B Preferred Stock valued at $31.7 million
     to PX Holding on April 19, 2001 and on December 21, 2001 issued
     666,667 shares of Series B Preferred Stock to PX Holding in exchange
     for $10.0 million. The Company used $8.1 million of the $10.0 million
     to purchase $22.0 million principal amount of Existing Notes from PX
     Holding. Such Existing Notes, together with $2.5 million principal
     amount of Existing Notes owned by the Company, were delivered to
     Panavision in exchange for 1,381,690 shares of newly issued shares of
     Panavision Series A Preferred Stock.
</TABLE>

Panavision

         The following selected financial data has been derived from the
Panavision Consolidated Financial Statements that have been audited by
Ernst & Young LLP, independent auditors. The information set forth below is
not necessarily indicative of results of future operations, and should be
read in conjunction with Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
Annual Report on Form 10-K.

<TABLE>
<CAPTION>

                                                   Pre-M & F Purchase           Post-M & F Purchase
                                                 ------------------------    --------------------------
                                                       Period from                  Period from
                                                      January 1 to                  April 20 to
                                                     April 19, 2001              December 31, 2001
                                                 ------------------------    --------------------------
                                                                    (in millions)

<S>                                              <C>                            <C>
Statement of Operations Data:
Revenue                                          $         65.8                 $     125.0
Cost of revenues                                           32.0                        72.4
                                                 ------------------------    --------------------------
Gross margin                                               33.8                        52.6
Selling, general and administrative expenses               17.0                        42.5
Research and development expenses                           1.8                         3.1
Operating income                                           15.0                         7.0
Net interest expense                                      (14.5)                      (27.6)
Net other income                                             -                          0.6
                                                 ------------------------    --------------------------
Income (loss) before income taxes                           0.5                       (20.0)
Income tax benefit (provision)                             (1.0)                        6.5
                                                 ------------------------    --------------------------
Net loss                                         $         (0.5)                $     (13.5)
                                                 ========================    ==========================

</TABLE>

<TABLE>
<CAPTION>

                                                                         Pre-M & F Purchase
                                                 -------------------------------------------------------------------
                                                                      Year Ended December 31,
                                                      2000              1999              1998            1997(1)
                                                 ----------------   --------------    --------------    ------------
                                                                          (in millions)

<S>                                              <C>                <C>               <C>                <C>
Statement of Operations Data:
Revenue                                          $     204.6        $     202.7       $     192.9        $   176.9
Cost of revenue                                        110.3              110.6             105.1             90.9
                                                 ----------------   --------------    --------------    ------------
Gross margin                                            94.3               92.1              87.8             86.0
Selling, general and administrative expenses            57.4               59.4              54.4             47.6
Research and development expenses                        6.1                6.1               4.6              4.5
Charges in connection with the Panavision
   Recapitalization (2)                                  -                  -                58.7               -
                                                 ----------------   --------------    --------------    ------------
Operating income (loss)                                 30.8               26.6             (29.9)            33.9
Net interest expense (2)                               (48.2)             (42.3)            (28.3)            (6.4)
Net other income (expense)                              (1.3)               1.5               3.4              1.2
                                                 ----------------   --------------    --------------    ------------
Income (loss) before income taxes                      (18.7)             (14.2)            (54.8)            28.7
Income tax provision                                    (4.9)              (1.8)             (0.3)            (9.2)
                                                 ----------------   --------------    --------------    ------------
Net income (loss)                                $     (23.6)       $     (16.0)      $     (55.1)      $     19.5
                                                 ================   ==============    ==============    ============


                                            Post-M & F Purchase                   Pre-M & F Purchase
                                            ---------------------   ------------------------------------------------
                                                December 31,                         December 31,
                                                    2001              2000          1999         1998        1997
                                            ---------------------   ----------    ---------    ---------    --------
                                                                         (in millions)
Balance Sheet Data:
Total assets                                    $     601.2          $   284.7     $   291.6    $   291.8   $   281.9
Total current liabilities                              50.2               50.1          41.2         33.1        44.3
Long-term debt (2)                                    448.6              477.4         473.4        463.6       120.0
Stockholders' equity (deficiency) (2)                  75.3             (250.3)       (231.2)      (213.8)      109.4


(1)    Includes operating results of the Film Services Group since June 5,
       1997, the date of its acquisition.

(2)    In connection with the recapitalization transaction consummated on
       June 4, 1998 pursuant to which PX Merger Corporation, a wholly owned
       subsidiary of PX Holding, merged with and into Panavision,
       Panavision recorded $10.1 million of transaction-related expense and
       a compensation charge of $48.6 million, related to the purchase of
       shares and retirement of options. Additionally, Panavision increased
       long-term borrowings outstanding and related interest expense as
       part of the Panavision recapitalization transaction.
</TABLE>


Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

         The following discussion should be read in conjunction with Item 6
"Selected Financial Data" and the M & F Worldwide Consolidated Financial
Statements and the Notes thereto included elsewhere in this Annual Report
on Form 10-K.

Overview

         The Company conducts its global business through two business
segments: Panavision and Mafco Worldwide. Panavision is a leading designer,
manufacturer and supplier of high precision camera systems, comprising
cameras, lenses and accessories, for the motion picture and television
industries. Panavision also has rental operations providing lighting,
lighting equipment, lighting grip, power distribution, generation and
related transportation equipment. Mafco Worldwide is the world's largest
producer of licorice extract. Sales are principally to the tobacco and
confectionery industries for use as a flavoring ingredient. Mafco Worldwide
also manufactures other flavoring ingredients from various botanicals.

         The Company considers revenue from international business to be
that revenue which is generated outside the United States.

Critical Accounting Policies

         Management's discussion and analysis of our financial condition
and results of operations are based upon our Consolidated Financial
Statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. We review
the accounting policies we use in reporting our financial results on a
regular basis. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent
assets and liabilities. On an ongoing basis, we evaluate our estimates,
including those related to accounts receivable, investments, rental assets,
intangible assets, income taxes, contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that
are believed to be reasonable under the circumstances. These estimates form
the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Results may
differ from these estimates due to actual outcomes being different from
those on which we based our assumptions. These estimates and judgments are
reviewed by management on an ongoing basis. We believe the following
critical accounting policies affect our more significant judgments and
estimates used in the preparation of our consolidated financial statements.
Panavision is also filing an Annual Report on Form 10-K. The Company
encourages investors to read the Panavision Annual Report when it becomes
available.

         Revenue Recognition - We recognize revenue using the guidance from
         the Securities and Exchange Commission Staff Accounting Bulletin
         No. 101 "Revenue Recognition in Financial Statements." Under these
         guidelines, rental revenue is recognized over the related
         equipment rental period using prices that are negotiated at the
         time of rental. Our prices are often adjusted to reflect changes
         in market conditions. Revenue from product sales is recognized
         upon shipment or when title passes to the customer. We do not have
         a history of significant product returns or revenue adjustments.

         Allowance for Doubtful Accounts - We maintain allowances for
         doubtful accounts for estimated losses resulting from the
         inability of our customers to make required payments. If the
         financial condition of our customers were to deteriorate,
         resulting in an impairment of their ability to make payments,
         additional allowances may be required.

         Income Taxes - We estimate our actual current tax liability
         together with our temporary differences resulting from differing
         treatment of items, such as net operating losses and depreciation,
         for tax and accounting purposes. These temporary differences
         result in deferred tax assets and liabilities. We must then assess
         the likelihood that our deferred tax assets will be recovered from
         future taxable income and to the extent we believe that recovery
         is not likely, we must establish a valuation allowance. At
         December 31, 2001, we had a $7.3 million valuation allowance
         established against our deferred tax assets. To the extent we
         establish a valuation allowance or increase this allowance in a
         period, we must include and expense the allowance within the tax
         provision in the consolidated statement of operations. Significant
         management judgment is required in determining our provision for
         income taxes, our deferred tax assets and liabilities and any
         valuation allowance recorded against our net deferred tax assets.

         Long-Lived Assets - We assess the impairment of property, plant
         and equipment (comprised principally of our assets available for
         rental), investments in joint ventures, goodwill, and other
         identifiable intangibles whenever events or changes in
         circumstances indicate that the carrying value may not be
         recoverable. Some factors we consider important which could
         trigger an impairment review include the following:

         o     Significant underperformance relative to expected historical
               or projected future operating results;

         o     Significant changes in the manner of our use of the acquired
               assets or the strategy for our overall business; and

         o     Significant negative industry or economic trends.

              When we determine that the carrying value of our long-lived
         assets may not be recoverable based upon the existence of one or
         more of the above indicators of impairment, we measure any
         impairment based on a projected discounted cash flow method using
         a discount rate determined by our management to be commensurate
         with the risk inherent in our current business model. In
         accordance with Statement of Accounting Standard ("SFAS") No. 142,
         "Goodwill and Other Intangible Assets," on January 1, 2002 we will
         cease to amortize goodwill and the Panavision tradename since both
         are believed to have an indefinite life. In lieu of amortization,
         we are required to perform an initial impairment review of our
         goodwill and Panavision tradename in 2002 and an annual impairment
         review thereafter. If we determine through the impairment review
         process that they have been impaired, we would record an
         impairment charge in our consolidated statement of operations.

         Recent Accounting Pronouncements - In July 2001, the Financial
         Accounting Standards Board ("FASB") issued SFAS No. 141, "Business
         Combinations." SFAS No. 141 requires the purchase method of
         accounting for business combinations initiated after June 30, 2001
         and eliminates the pooling-of-interests method. We adopted this
         pronouncement as of January 1, 2002.

              In July 2001, the FASB issued SFAS No. 142, "Goodwill and
         Other Intangible Assets," which is effective for fiscal years
         beginning after December 15, 2001, with the exception of goodwill
         and intangible assets acquired after June 30, 2001, which are
         subject immediately to the nonamortization and amortization
         provisions of SFAS No. 142. SFAS No. 142 changes the accounting
         for goodwill from an amortization method to an impairment only
         approach. In addition, the standard includes provisions, upon
         adoption, for the reclassification of certain existing recognized
         intangibles as goodwill, reassessment of the useful lives of
         existing recognized intangibles, reclassification of certain
         intangibles out of previously reported goodwill and the testing
         for impairment of existing goodwill and other intangibles. For
         existing goodwill (with the exception of nonamortization goodwill
         related to the July 2, 2001 acquisition of Las Palmas Productions,
         Inc., which was effective as of the date of the acquisition) and
         the Panavision tradename, we will adopt this pronouncement on
         January 1, 2002. As a result of this adoption, approximately $11.9
         million of historical goodwill and tradename amortization will not
         continue beyond December 31, 2001.

              SFAS No. 142 requires that goodwill be tested annually for
         impairment using a two-step process. The first step is to identify
         a potential impairment and, in transition, this step must be
         measured as of the beginning of the fiscal year. However, a
         company has six months from the date of adoption to complete the
         first step. The second step of the goodwill impairment test
         measures the amount of the impairment loss, measured as of the
         beginning of the year of adoption, if any, and must be completed
         by the end of our fiscal year. Intangible assets deemed to have an
         indefinite life, such as Panavision's tradename, will be tested
         for impairment using a one-step process which compares the fair
         value to the carrying amount of the asset as of the beginning of
         the fiscal year, and pursuant to the requirements of SFAS No. 142
         will be completed during the first quarter of 2002. Any loss
         resulting from the first step impairment test will be reflected as
         a cumulative effect of a change in accounting principle in the
         first quarter of 2002. Management's preliminary belief is that the
         fair values of the Company's goodwill and the Panavision tradename
         are in excess of carrying value. However, we will perform detailed
         impairment tests of goodwill and the Panavision tradename as of
         January 1, 2002 as required by SFAS No. 142 to determine the
         effect, if any, on our financial position or results of
         operations.

              In August 2001, the FASB issued SFAS No. 144, "Accounting for
         the Impairment or Disposal of Long-Lived Assets," which is
         effective for fiscal years beginning after December 15, 2001. SFAS
         No. 144 supersedes SFAS No. 121, "Accounting for the Impairment or
         Disposal of Long-Lived Assets and for Long-Lived Assets to Be
         Disposed Of," and the accounting and reporting provisions relating
         to the disposal of a segment of a business of Accounting
         Principles Board ("APB") Opinion No. 30. We do not expect the
         adoption of SFAS No. 144 to have a material effect on our
         consolidated financial position, results of operations and cash
         flows.

         Contingencies and Indemnification Agreements - We periodically
         record the estimated impacts of various conditions, situations or
         circumstances involving uncertain outcomes. These events are
         called "contingencies," and our accounting for such events is
         prescribed by SFAS No. 5, "Accounting for Contingencies."

              The accrual of a contingency involves considerable judgment
         on the part of management. We use our internal expertise, and
         outside experts (such as lawyers and tax specialists), as
         necessary, to help estimate the probability that a loss has been
         incurred and the amount (or range) of the loss. The Company has
         not recognized any liability in its financial statements for
         matters covered by indemnification agreements. The Company
         considers these obligations to be those of third-party indemnitors
         and monitors their financial positions to determine the level of
         uncertainty associated with their ability to satisfy their
         obligations. Based upon the indemnitors' active management of
         indemnifiable matters, discharging of the related liabilities when
         required, and financial positions based upon publicly filed
         financial statements, as well as the history of insurance recovery
         set forth above, the Company believes that the likelihood of
         failing to obtain reimbursement of amounts covered by insurance
         and indemnification is remote. The Company currently does not have
         any material contingencies that it believes require an accrual in
         the consolidated financial statements. See Item 1. - The Tobacco
         Industry and Corporate Indemnification Matters; Item 3. - Legal
         Proceedings; and Note 12 - Commitments and Contingencies to the
         Consolidated Financial Statements in this Annual Report on Form
         10-K.

Consolidated Operating Results

   Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

         Revenues were $223.4 million in the 2001 period and $93.1 million
in the 2000 period. Of the $130.3 million increase, $125.0 million was due
to Panavision and $5.3 million was due to higher sales by Mafco Worldwide,
primarily to the Company's tobacco and non-tobacco licorice customers.

         Cost of revenues was $123.7 million in the 2001 period as compared
to $49.2 million in the 2000 period. Excluding the cost of revenues
attributable to Panavision of $72.1 million, cost of revenues at Mafco
Worldwide was $51.6 million which was an increase of $2.4 million due to
the higher sales of Mafco Worldwide.

         Gross profit was $99.7 million for the 2001 period as compared to
$43.9 million in the 2000 period. After excluding the Panavision gross
profit of $52.9 million included in the 2001 period, the gross profit
increased by $2.9 million. As a percentage of sales the 2001 gross profit
was 44.6% as compared to 47.2% in the 2000 period. The decrease was
attributable to Panavision in the 2001 period.

         Selling, general and administrative ("SG&A") expenses were $62.2
million in the 2001 period and $8.9 million in the 2000 period. Of the
$53.3 million increase, $46.6 million was due to Panavision and $6.7
million was due to lower pension income of Mafco Worldwide and higher
corporate expenses for insurance and legal services.

         In February 2001 Mafco Worldwide terminated its overfunded pension
plan resulting in a gain of $11.1 million.

         In connection with the Vannini settlement, (as discussed in Item 3
- Legal Proceedings), the Company incurred an expense of $4.5 million.

         Operating income totaled $44.1 million in the 2001 period as
compared to $35.0 million in the 2000 period. The increase in operating
income in 2001 reflected the inclusion of Panavision for part of 2001, its
increase in gross profits of Mafco Worldwide and its gain from the pension
termination, partially offset by lower pension income and the costs
incurred in the shareholder litigation settlement.

         Net interest expense was $31.8 million in 2001 and $3.0 million in
2000, an increase of $28.8 million primarily attributable to Panavision and
interest expense on Mafco Worldwide's new credit agreement.

         The net extraordinary gain of $4.3 million related to a gain on
the purchase of Existing Notes partially offset by the write-off of the
deferred financing costs related to Mafco Worldwide's old credit agreement
which was refinanced in April 2001.

         The provision for income taxes was $10.5 million in 2001 and $13.1
million in 2000. The provision for income taxes in the 2001 period
reflected the effects of nondeductible excise taxes paid on the pension
termination gain, foreign taxes in excess of domestic rates, foreign losses
for which no benefit was provided and other non-deductible items which were
partially offset by a deferred income tax benefit of $19.8 million
primarily resulting from the reversal of the tax valuation allowance. The
effective tax rate was 85.4% for the 2001 period as compared to 40.7% for
the 2000 period.

   Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         Net sales were $93.1 million in 2000 and $97.3 million in 1999, a
decrease of $4.2 million or 4.3%. The decline in sales for 2000 resulted
from the weakness of the Euro in relation to the U.S. dollar, lower
shipment volume to the Company's non-licorice natural products customers,
and lower sales of French produced licorice to the Company's foreign
tobacco and confectionery customers largely due to shipments late in 1999
in anticipation of Y2K computer problems.

         Cost of sales was $49.2 million in 2000 as compared to $51.2
million in 1999. The decline of $2.0 million was due to the lower sales
volume as well as a reduction in raw materials costs and continued cost
reduction programs. As a percentage of net sales, cost of sales was 52.8%
in 2000 and 52.6% in 1999.

         The gross profit margin decreased slightly from 47.4% in 1999 to
47.2% in 2000.

         SG&A expenses were $8.9 million in 2000 and $11.6 million in 1999.
The decline of $2.7 million in 2000 was due to higher earnings on the
Company's overfunded pension plans, lower salary expenses, and lower
professional service expenses. In 2000, $6.5 million was recorded as
pension income and $5.4 million was recorded in 1999.

         Net interest expense was $0.3 million higher in 2000 due to higher
outstanding debt during the year at slightly higher interest rates.

         The tax provision for federal, state and local, and foreign income
taxes as a percentage of earnings before income taxes was 40.7% in 2000 and
40.1% in 1999. The 2000 provision reflected a foreign benefit relating to a
decrease in the tax rate. The 1999 provision reflected a reduction of the
valuation allowance for prior year minimum tax credits.

Operating Results By Business Segment

                              MAFCO WORLDWIDE

   Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

         Sales were $98.4 million in the 2001 period and $93.1 million in
the 2000 period, an increase of $5.3 million or 5.7%. This increase was due
to higher sales to Mafco Worldwide's licorice customers. Both volume and
average selling prices were higher in 2001.

         Cost of sales was $51.6 million in the 2001 period and $49.2
million in the 2000 period. The $2.4 million increase was due to the higher
sales. As a percentage of sales, cost of sales was 52.4% in 2001 and 52.8%
in 2000.

         Selling, general and administrative expenses were $12.8 million in
the 2001 period and $8.5 million in the 2000 period. The increase was due
to lower pension income in the 2001 period.

         In February 2001, the Company terminated an overfunded pension
plan and as a result recorded a $11.1 million gain in 2001.

         Operating income was $45.1 million in 2001 and $35.4 million in
2000. The increase of $9.7 million was primarily due to the pension
reversion.

   Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

         Net sales were $93.1 million in 2000 and $97.3 million in 1999, a
decrease of $4.2 million or 4.3%. The decline in sales for 2000 resulted
from the weakness of the Euro in relation to the U.S. dollar, lower
shipment volume to the Company's non-licorice natural products customers,
and lower sales of French produced licorice to the Company's foreign
tobacco and confectionery customers largely due to shipments late in 1999
in anticipation of Y2K computer problems.

         Cost of sales were $49.2 million in 2000 as compared to $51.2
million in 1999. The decline of $2.0 million was due to the lower sales
volume as well as a reduction in raw materials costs and continued cost
reduction programs. As a percentage of net sales, cost of sales was 52.8%
in 2000 and 52.6% in 1999.

         The gross profit margin decreased slightly from 47.4% in 1999 to
47.2% in 2000.

         SG&A expenses were $8.5 million in 2000 and $11.1 million in 1999.
The decline of $2.6 million in 2000 was due to higher earnings on the
Company's overfunded pension plans, lower salary expenses, and lower
professional service expenses. In 2000, $6.5 million was recorded as
pension income and $5.4 million was recorded in 1999.

                                 PANAVISION

         The following discussion of the results of Panavision have been
presented based on the results reported by Panavision on a stand alone
basis, which is the basis on which management monitors the segment. With
respect to 2001, the following discussion and analysis includes the
combined amounts of the Pre-M&F Purchase period and the Post-M&F Purchase
period as set forth in the selected financial table. Such combined amounts
do not represent a pro forma presentation of the results of Panavision for
2001.

   Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

         Camera Rental Operations

         Camera rental revenue for the year ended December 31, 2001 was
$124.6 million. Revenue decreased $5.4 million, or 4.2%, compared to 2000.
Exchange rate changes adversely affected the year-to-year comparisons by
almost $3.3 million reflecting the impact of weaker European and Australian
currencies versus the U.S. Dollar. At constant exchange rates, the decline
in camera revenue largely reflected lower revenue associated with
television commercials, reflecting a weak television commercial market.
Most territories worldwide were adversely affected by the commercial
slowdown. The year-to-year decline is in comparison to a 2000 commercial
market that was adversely affected by a Screen Actors Guild commercial
actors strike from May 2000 through October 2000.

         Camera revenue associated with worldwide feature film production
increased in 2001, despite fewer major studio feature film starts in 2001
as compared to 2000. The decrease in production starts was the result of an
unusually low level of worldwide feature film productions in second half of
2001, following the robust feature film environment of the first half of
the year. The shift in 2001 production occurred in anticipation of the
possibilities of mid-year strikes by the Writers Guild of America and the
Screen Actors Guild. Both of these labor negotiations were concluded at the
end of the second quarter without any labor disruption. The events of
September 11, 2001 may have also exacerbated the decline in the feature film
production starts in the second half of 2001. Revenue growth was also
achieved in North American series television in 2001.

         Cost of camera rental for the year was $58.6 million, a decrease
of $2.5 million, or 4.1%, as compared to 2000. The decrease was primarily
due to lower maintenance cost on rental equipment and the favorable impact
of translating expenses of operations denominated in weaker currencies to
the U.S. dollar.

         Lighting Rental Operations

         Lighting rental revenue for the year ended December 31, 2001 was
$31.7 million, a decrease of $8.6 million, or 21.3%, compared to 2000. The
decrease was primarily due to considerably lower levels of feature film
production in the U.K. (Lee Lighting). Lighting revenue associated with
television commercials also declined reflecting the weak television
commercial market worldwide. Exchange rate changes adversely impacted the
year-to-year comparisons by approximately $1.8 million.

         Cost of lighting rental for the year was $26.5 million, a decrease
of $3.5 million, or 11.7%, from 2000. The change is primarily due to the
decreased costs associated with the lower lighting rentals worldwide.

         Sales and Other

         Sales and other revenue in the year ended December 31, 2001 was
$34.4 million, an increase of $0.1 million from the year ended December 31,
2000. The results reflected $3.5 million of revenue generated from EFILM,
offset by lower lighting filter and expendable sales worldwide (see Note 2
to the Company's Consolidated Financial Statements included elsewhere in
this Annual Report on Form 10-K for information regarding EFILM). Exchange
rate changes adversely affected the year-to-year comparisons by
approximately $1.9 million.

         Operating Costs

         Selling, general and administrative expenses for the year ended
December 31, 2001 were $59.5 million, an increase of $2.1 million, or 3.7%,
as compared to the year ended December 31, 2000. The increase reflected
approximately $8.4 million of additional goodwill and other intangible
amortization resulting from the fair value adjustments arising from the
Panavision Acquisition, offset by the impact of cost reduction measures
implemented during the year.

         Research and development expenses for 2001 were $5.0 million, a
decrease of $1.2 million from 2000. The decrease was primarily due to lower
costs related to the development of products for digital application.

         Interest, Taxes and Other

         Net interest expense for the year ended December 31, 2001 was
$42.1 million, a decrease of $6.2 million, or 12.8%, from 2000. The
decrease primarily reflected lower interest rates as compared to the year
ended December 31, 2000.

         Net other income for 2001 was $0.7 million, compared to net other
expense of $1.3 million in 2000. The change primarily reflects a decrease
in foreign exchange losses as compared to prior year.

         The tax benefit was $5.5 million for the year ended December 31,
2001, as compared to a tax provision of $4.9 million for the year ended
December 31, 2000. In connection with the Panavision Acquisition,
Panavision recorded a deferred income tax benefit of approximately $3.8
million resulting from the reversal of the valuation allowance. Panavision
also recorded a net income tax benefit of $6.2 million primarily resulting
from the benefit associated with domestic tax losses. The tax benefit was
partially offset by the recording of a $4.6 million provision relating to
profitable foreign operations and foreign taxes withheld at source and
alternative minimum taxes. For the year ended December 31, 2000, no
corresponding tax benefit was recorded for U.S. losses.

Related Party Transactions

         The Panavision Acquisition

         On April 19, 2001, the Company and PX Holding, a wholly owned
subsidiary of Holdings, announced that, pursuant to a stock purchase
agreement, M & F Worldwide had purchased all 7,320,225 shares of Panavision
Common Stock held by PX Holding. The shares purchased represented
approximately 83.5% of the then outstanding shares of Panavision Common
Stock. The acquisition was accounted for as a purchase and accordingly only
Panavision's results of operations after April 19, 2001 are included in the
Company's operating results for the twelve months ended December 31, 2001.
(See Note 16 to the Company's Consolidated Financial Statements included
elsewhere in this Annual Report on Form 10-K for further segment
information.)

         In accordance with APB Opinion No. 16, the Panavision Acquisition
has been accounted for by the purchase method. The allocation of the
purchase price to assets and liabilities was based on their respective
estimated fair values at April 19, 2001 to the extent of the Company's
83.5% controlling interest. The remaining 16.5% is accounted for at
Panavision's carryover basis. The purchase price and expenses associated
with the Panavision Acquisition exceeded the estimated fair value of
Panavision's net liabilities by $302.7 million and has been assigned to
goodwill, which is being amortized over thirty years on a straight-line
basis.

         As a result, the following adjustments to Panavision's assets and
liabilities representing 83.5% of the totals were recorded as of the
acquisition date to adjust the historical carrying values (in millions):

                                                                    Increase
                                                                   (Decrease)
Property, plant and equipment                                  $      40.8
Patents and trademarks                                                68.6
Other                                                                 (2.8)
Long-term debt                                                         3.8
Deferred tax assets                                                   15.6
Deferred tax liabilities                                              45.1

         At the closing of the Panavision Acquisition, Ronald O. Perelman,
Holdings' sole shareholder, delivered a letter to M & F Worldwide in which
Mr. Perelman agreed that, if M & F Worldwide determined in its good faith
reasonable judgment that Panavision would be unable to make required
payments of principal or interest under its Existing Credit Agreement, or
its Existing Notes, he or corporations under his control would provide such
financial support to M & F Worldwide as may be required by Panavision in
connection with such payments of principal and interest. The financial
support from Mr. Perelman would be in such amount as M & F Worldwide
determines. However, there can be no assurance that M & F Worldwide would
make such determination or if such determination was made, whether such
determination would be adequate and timely in order to meet Panavision's
needs, if such needs arose. Any investment by M & F Worldwide in Panavision
of proceeds M & F Worldwide receives from Mr. Perelman would be on terms to
be agreed between M & F Worldwide and Panavision.

         In satisfaction of the obligation of M & F Worldwide under another
agreement entered into contemporaneously with the closing of the Panavision
Acquisition, Holdings and M & F Worldwide entered into a letter agreement,
and M & F Worldwide and Panavision entered into a letter agreement, both
dated as of December 21, 2001, pursuant to which M & F Worldwide purchased
from PX Holding $22.0 million principal amount of Existing Notes for an
aggregate purchase price of $8.1 million, and M & F Worldwide delivered to
Panavision an aggregate of $24.5 million principal amount of Existing Notes
in exchange for 1,381,690 shares (the "Exchanged Shares") of Series A
Non-Cumulative Perpetual Participating Preferred Stock, par value $0.01 per
share, of Panavision. The Exchanged Shares were issued at a value of
approximately $9.3 million, which represents M & F Worldwide's cost to
purchase the Existing Notes delivered to Panavision. Because M & F
Worldwide delivered the Existing Notes to Panavision in satisfaction of
obligations under an agreement entered into at the time of the Panavision
Acquisition, the difference between M & F Worldwide's cost and Panavision's
book value of the Existing Notes was recorded as a reduction of goodwill.

         Panavision and M & F Worldwide entered into a letter agreement
dated as of December 21, 2001, pursuant to which Panavision and M & F
Worldwide agreed to amend the Registration Rights Agreement between M & F
Worldwide and Panavision, dated as of June 5, 1998 (the "Registration
Rights Agreement") to, among other things, include the Exchanged Shares
within the definition of "Registrable Securities". In connection with the
Panavision Acquisition, PX Holding had assigned to the Company and the
Company assumed the Registration Rights Agreement, pursuant to which the
Company and certain transferees of Acquired Shares held by the Company (the
"Holders") have the right to require Panavision to register all or part of
the Acquired Shares owned by such Holders under the Securities Act of 1933
(a "Demand Registration"). Panavision may postpone giving effect to a
Demand Registration for a period of up to 30 days if Panavision believes
such registration might have a material adverse effect on any plan or
proposal by Panavision with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction, or
Panavision is in possession of material non-public information that, if
publicly disclosed, could result in a material disruption of a major
corporate development or transaction then pending or in progress or in
other material adverse consequences to Panavision. In addition, the Holders
will have the right to participate in registrations by Panavision of its
common stock (an "Incidental Registration") subject, however, to certain
rights in favor of Panavision to reduce, or eliminate entirely, the number
of shares of Acquired Shares the Holders may have registered in an
Incidental Registration. Panavision will pay all out-of-pocket expenses
incurred in connection with a Demand Registration or an Incidental
Registration, except for underwriting discounts, commissions and related
expenses attributable to the Acquired Shares sold by such Holders.

         PX Holding and the Company entered into a letter agreement, dated
as of December 21, 2001, pursuant to which the Company and PX Holding
agreed to amend the Registration Rights Agreement entered into in
connection with the Panavision Acquisition, dated as of April 19, 2001 (the
"PX / M & F Registration Rights Agreement"), to, among other things,
include within the definition of "Registrable Securities" any additional
shares of the Company which may be issued to PX Holding in the future. In
connection with the Panavision Acquisition, the Company and PX Holding
entered into the PX / M & F Registration Rights Agreement pursuant to which
PX Holding and certain transferees of Common Stock and Series B Preferred
Stock (collectively, "Registrable Shares") held by PX Holding (the
"Holders") have the right to require the Company to register all or part of
the Registrable Shares owned by such Holders under the Securities Act (a
"Demand Registration"). The Company may postpone giving effect to a Demand
Registration for a period of up to 30 days if the Company's Board of
Directors believes such registration might have a material adverse effect
on any plan or proposal by the Company with respect to any financing,
acquisition, recapitalization, reorganization or other material
transaction, or if the Company is in possession of material non-public
information that, if publicly disclosed, could result in a material
disruption of a major corporate development or transaction then pending or
in progress or in other material adverse consequences to the Company. In
addition, the Holders will have the right to participate in registrations
by the Company of its equity securities (an "Incidental Registration")
subject, however, to certain rights in favor of the Company to reduce, or
eliminate entirely, the number of Registrable Shares the Holders have
requested to be registered in an Incidental Registration. The Company will
pay all out-of-pocket expenses incurred in connection with a Demand
Registration or an Incidental Registration, except for underwriting
discounts and commissions attributable to the Registrable Shares sold by
such Holders and the fees of any counsel retained by holders in connection
with any Demand or Incidental Registration.

         In November 2000, five purported derivative and/or class actions
were filed in New Castle County, Delaware Chancery Court against the
Company, its board of directors and, in one case, Holdings and MCG. These
actions, as well as a similar action filed in New York County, New York
Supreme Court, challenged as unfair to the Company's public shareholders
the original proposal to sell to the Company the stake in Panavision then
indirectly owned by Holdings. Following consummation of the Panavision
transaction in April 2001, the five Delaware actions were consolidated
under the caption In re M & F Worldwide Corp. Shareholders Litigation, C.A.
No. 18502-NC (the "Consolidated Action"), the operative complaint in the
Consolidated Action was amended to challenge the transaction as
consummated, and another shareholder filed a related action in the Delaware
Chancery Court, captioned Vannini v. Perelman, et al., C.A. No. 18850-NC.
The operative complaints sought, among other things, rescission of the
transaction, damages, a declaratory judgment that the transaction was
unfair as to process and as to price, and plaintiffs' costs and attorneys'
fees. The Company and the parties to the Vannini action settled that
litigation, pursuant to which, among other things, the Company acquired one
million shares of Company common stock held by the plaintiff, the plaintiff
dismissed his claim with prejudice, and the company agreed to pay to
plaintiff $10.0 million plus up to $1.0 million for reimbursement of his
legal costs. The Company recorded treasury stock of $6.5 million and
shareholder litigation settlement expense of $4.5 million in connection
with the Vannini settlement. After the Vannini settlement, plaintiffs in
the Consolidated Action commenced a separate derivative action in the
Delaware Chancery Court against the Company's directors and Holdings
challenging the settlement as a breach of fiduciary duty.

         In January 2002, during the trial of the Consolidated Action, the
defendants and certain of the plaintiffs reached an agreement in principle,
which agreement has subsequently been reduced to a definitive written
agreement, concerning the settlement and ultimate dismissal of the
Consolidated Action and the action challenging the Vannini settlement. The
principal terms of the agreement, which are subject to court approval, are
as follows:

         o     Shareholders who held Company common stock on April 19, 2001
               and who continue to hold through the date of the settlement
               hearing (the "Settlement Class") will be entitled to obtain
               up to $2.15 per share, with the amount being reduced
               proportionately if necessary so that the total payout will
               not exceed $12 million (the "Settlement Fund").

         o     Counsel for the Settlement Class will receive attorneys'
               fees and expenses as awarded by the court, up to $2.75
               million.

         o     All decisions contemplated to be made by the Company under
               that certain letter agreement dated April 19, 2001 between
               the Company and the sole shareholder of Holdings shall be
               made by a committee of Company directors who are and were
               not directly or indirectly employed by such sole shareholder
               and are otherwise disinterested (the "Independent
               Committee").

         o     Defendants in the Consolidated Action shall not make, or
               cause or permit their affiliates to make, any future
               purchase of the Existing Notes of Panavision without first
               offering to the Company the opportunity to make such
               purchase, which opportunity shall be evaluated by the
               Independent Committee.

         o     The Company shall have the right to purchase from Holdings
               approximately $37.7 million principal amount at maturity of
               Existing Notes at any time through the maturity of such
               Existing Notes and in the sole discretion of the Independent
               Committee, at a price equal to the current holder's purchase
               price plus a reasonable cost of carry.

         o     The Consolidated Action and the action challenging the
               Vannini settlement shall be dismissed with prejudice, and
               the Settlement Class shall provide to defendants a full
               release of all claims relating to the subject of such
               lawsuits or any corporate opportunity claim relating to the
               purchase of Existing Notes by certain defendants or their
               affiliates.

         Pursuant to agreements, the Settlement Fund is not the
responsibility of the Company and the cash portion of the settlement will
be funded entirely from insurance. As a result, the Company has neither
accrued any liability nor recorded a receivable for recovery from insurers
as of December 31, 2001. Certain of the named plaintiffs in the
Consolidated Action have indicated to the court that they intend to oppose
the settlement when it is presented for approval. While the Company
believes that the settlement is fair, reasonable and in the best interests
of the Company's shareholders, it can give no assurance that the court will
approve it.

         The Panavision Tax Sharing Agreement

         Since the closing of the Panavision Acquisition on April 19, 2001,
Panavision, for federal income tax purposes, has been included in the
affiliated group of which the Company is the common parent, and
Panavision's federal taxable income and loss has been included in such
group's consolidated tax return filed by the Company. Panavision also may
be included in certain state and local tax returns of the Company or its
subsidiaries. As of April 19, 2001, Panavision and certain of its
subsidiaries and the Company entered into a tax sharing agreement (the
"Panavision Tax Sharing Agreement"), pursuant to which the Company has
agreed to indemnify Panavision against federal, state or local income tax
liabilities of the consolidated or combined group of which the Company (or
a subsidiary of the Company other than Panavision or its subsidiaries) is
the common parent for taxable periods beginning after April 19, 2001 during
which Panavision or a subsidiary of Panavision is a member of such group.
Pursuant to the Panavision Tax Sharing Agreement, for all taxable periods
beginning after April 19, 2001, Panavision will pay to the Company amounts
equal to the taxes that Panavision would otherwise have to pay if it were
to file separate federal, state or local income tax returns (including any
amounts determined to be due as a result of a redetermination arising from
an audit or otherwise of the consolidated or combined tax liability
relating to any such period which is attributable to Panavision), except
that Panavision will not be entitled to carry back any losses to taxable
periods ending prior to April 20, 2001. Since the payments to be made under
the Panavision Tax Sharing Agreement will be determined by the amount of
taxes that Panavision would otherwise have to pay if it were to file
separate federal, state and local income tax returns, the Panavision Tax
Sharing Agreement will benefit the Company to the extent the Company can
offset the taxable income generated by Panavision against losses and tax
credits generated by the Company and its other subsidiaries. To the extent
that Panavision has losses for tax purposes, the Panavision Tax Sharing
Agreement permits Panavision to carry those losses back to periods beginning
on or after April 20, 2001 and forward for so long as Panavision is
included in the affiliated group of which M & F Worldwide is the common
parent (in both cases, subject to federal, state and local rules on
limitation and expiration of net operating losses) to reduce the amount of
the payments Panavision otherwise would be required to make to M & F
Worldwide in years in which it has current income for tax purposes.

         The Mafco Tax Sharing Agreement

         For the period from February 1, 1999 through April 19, 2001,
Panavision, for federal income tax purposes, had been included in the
affiliated group of which Holdings was the common parent, and for such
period Panavision's federal taxable income and loss had been included in
such group's consolidated tax return filed by Holdings. As of February 1,
1999, Panavision and certain of its subsidiaries and Holdings entered into
a tax sharing agreement (the "Mafco Tax Sharing Agreement") containing
terms and conditions substantially the same as those in the Panavision Tax
Sharing Agreement. The Mafco Tax Sharing Agreement governed tax matters
between Panavision and Holdings for the period from February 1, 1999
through April 198, 2001 and continues in effect as to post-Holdings
consolidation matters such as audit adjustments and indemnities.

         Las Palmas Acquisition

         In July 2001, M & F Worldwide purchased all of the issued and
outstanding shares of Las Palmas, which runs EFILM. As a result, Las Palmas
became a wholly-owned subsidiary of M & F Worldwide. The consideration paid
by M & F Worldwide at closing consisted of $5.4 million to the selling
shareholders and $600,000 to Las Palmas. M & F Worldwide also agreed to
make an additional payment to the selling shareholders based on the EBITDA
of EFILM (with a guaranteed minimum of $1.5 million). Las Palmas entered
into a series of transactions with Panavision to provide it substantially
all of the benefits of, and obligate it with respect to, EFILM.
Specifically, Las Palmas (i) subleased the real estate used in the business
to Panavision, (ii) leased the property and equipment used in the business
to Panavision on a month-to-month basis, (iii) seconded all of Las Palmas
employees to Panavision until July 2, 2008 or such later date mutually
agreed upon, and (iv) granted a worldwide, nonexclusive license to certain
technology and intellectual property to be used solely in connection with
servicing customers to Panavision until July 2, 2008, which agreement
automatically renews for successive one year terms unless prior written
notice is provided by a party (collectively, the "EFILM Agreements").
Following the entry into these various agreements, Panavision has also
directly purchased equipment that is used in the business of EFILM.

         In addition to monthly payments, the EFILM Agreements require that
Panavision pay M & F Worldwide a one-time cash payment equal to the greater
of (a) 90% of the average annual EBITDA (as defined in the EFILM
Agreements) of the EFILM business over a two-year Incentive Period (as
defined in the EFILM Agreements) or (b) $1.5 million, such payment to occur
no earlier than 2004 and no later than 2007.

         M & F Worldwide has agreed to sell Panavision all of the issued
and outstanding shares of Las Palmas, Panavision has agreed to purchase
these shares, for approximately $6.7 million, subject to the consummation
of a refinancing of its Existing Credit Agreement.

         The Abex Merger

         In connection with the Abex Merger and the related Transfer to a
subsidiary of MCG of substantially all of Abex's consolidated assets and
liabilities, with the remainder being retained by the Company, the Company,
a subsidiary of Abex, Pneumo Abex and certain other subsidiaries of the
Company entered into the Transfer Agreement. Under the Transfer Agreement,
substantially all of Abex's consolidated assets and liabilities, other than
those relating to Aerospace, were transferred to a subsidiary of MCG, with
the remainder being retained by Pneumo Abex. The Transfer Agreement
provides for appropriate transfer, indemnification and tax sharing
arrangements, in a manner consistent with applicable law and existing
contractual arrangements.

         The Transfer Agreement requires such subsidiary of MCG to
undertake certain administrative and funding obligations with respect to
certain asbestos claims and other liabilities, including environmental
claims, retained by Pneumo Abex. The Company will be obligated to make
reimbursement for the amounts so funded only when amounts are received by
the Company under related indemnification and insurance agreements. Such
administrative and funding obligations would be terminated as to asbestos
products claims in the case of a bankruptcy of Pneumo Abex or M & F
Worldwide or of certain other events affecting the availability of coverage
for such claims from third party indemnitors and insurers. In the event of
certain kind of disputes with Pneumo Abex's indemnitors regarding their
indemnities, the Transfer Agreement permits the Company to require such
subsidiary to fund 50% of the costs of resolving the disputes.

         In connection with the Abex Merger, MCG and the Company entered
into a registration rights agreement (the "Company/MCG Registration Rights
Agreement") providing MCG with the right to require the Company to use its
best efforts to register under the Securities Act, and the securities or
blue sky laws of any jurisdiction designated by MCG, all or a portion of
the issued and outstanding common stock, if any, retained (the "Retained
Shares") by MCG in the Abex Merger (the "Registrable Shares"). Such demand
rights are subject to the conditions that the Company is not required to
(1) effect a demand registration more than once in any 12-month period, (2)
effect more than one demand registration with respect to the Retained
Shares, or (3) file a registration statement during periods (not to exceed
three months) (a) when the Company is contemplating a public offering, (b)
when the Company is in possession of certain material non-public
information, or (c) when audited financial statements are not available and
their inclusion in a registration statement is required. In addition, and
subject to certain conditions described in the Company/MCG Registration
Rights Agreement, if at any time the Company proposes to register under the
Securities Act an offering of common stock or any other class of equity
securities, then MCG will have the right to require the Company to use its
best efforts to effect the registration under the Securities Act and the
securities or blue sky laws of any jurisdiction designated by MCG of all or
a portion of the Registrable Shares as designated by MCG. The Company is
responsible for all expenses relating to the performance of, or compliance
with, the Company/MCG Registration Rights Agreement except that MCG is
responsible for underwriters' discounts and selling commissions with
respect to the Registrable Shares being sold. In subsequent amendments to
the Company/MCG Registration Rights Agreement, the Company has agreed that
shares of common stock acquired from time to time by MCG will be treated as
"Registrable Shares."

         Affiliated Payments

         During fiscal 2001, the three executive officers of the Company
were executives of Holdings. Such executive officers were not compensated
by the Company. Accordingly, in accordance with Securities and Exchange
Commission Staff Accounting Bulletin 79, "Accounting for Expenses or
Liabilities Paid by Principal Stockholder(s)," the value of the services
provided by such officers to the Company in the amount of $1.5 million is
reflected in the accompanying consolidated financial statements as
compensation expense and a corresponding increase to paid-in-capital.
Neither Holdings nor any of such executive officers received any payment
from the Company in connection with its recognition for accounting purposes
of such $1.5 million of compensation expense.

         Included in accounts payable in the consolidated balance sheet at
December 31, 2001, is $1.2 million due to Holdings.

         The Company paid a subsidiary of Holdings $0.8 million and $0.3
million to reimburse to it a portion of the chief executive officer's
compensation expense in 2000 and 1999, respectively, representing time
devoted by him to the affairs of the Company. The Company received from a
subsidiary of Holdings $0.1 million to reimburse to it a portion of another
executive of the Company's salary expense in both 2000 and 1999
representing time devoted by him to the affairs of such subsidiary of
Holdings.

         At December 31, 2001, the Company recorded amounts payable to DHD
Ventures, LLC of approximately $0.2 million relating to equipment rentals
facilitated by Panavision on behalf of DHD Ventures. Such amount is
included as a reduction of accounts receivable in the accompanying
consolidated balance sheets.

         Included in other assets at December 31, 2001 is a note receivable
of approximately $0.3 million due in 2003 from Pany Rental, Inc. (dba
Panavision New York), an agent in which Panavision holds a one-third
interest.

         In December 2001, Panavision entered into a lease agreement with
TFN Lighting Corp. ("TFN"), a wholly owned subsidiary of Pany Rental, Inc.
(dba Panavision New York), whereby Panavision leased to TFN certain of its
lighting and related equipment located in the United States. The lease term
commences on February 1, 2002 and continues for 45 months. Monthly rental
payments are due in specified amounts as outlined in the lease agreement.
At the end of the Option Term, as defined in the lease, TFN will have the
option to purchase the lighting and related equipment covered by the lease.

Liquidity and Capital Resources

         Cash provided by operating activities for the year ended December
31, 2001 totaled $81.7 million. The increase in cash provided by operating
activities of $51.1 million in 2001 was primarily attributable to net cash
provided by operating activities of Panavision of $32.1 million, the net
cash retained in connection with the termination of the Mafco Worldwide
Corporation Defined Benefit Plan of $33.8 million partially offset by the
shareholder litigation settlement expense of $4.5 million, by higher
corporate expenses of $2.4 million and the net change in working capital
(excluding cash). Cash used in investing activities were for the purchase
of Panavision stock of $76.0 million, the purchase of the Existing Notes of
$13.4 million, the EFILM acquisition of $5.7 million, and capital
expenditures of $16.4 million primarily at Panavision for camera rental
systems and accessories since the time of the Panavision Acquisition. Cash
provided by financing activities were primarily the result of the
refinancing of the Mafco Worldwide credit agreement to purchase Panavision,
repayments under both Panavision's and Mafco Worldwide's credit agreements,
and the proceeds from the issuance of preferred stock.

         The Company's net cash flows provided by operating activities were
$30.6 million and $28.0 million for the years ended December 31, 2000 and
1999, respectively primarily from net income and the realization of
deferred tax assets. Cash flows used in investing activities of $1.1
million in both 2000 and 1999 consisted of capital expenditures. Cash flows
used in financing activities of $28.6 million in 2000 were for the
repurchase of the Company's common stock and the repayment of debt. Cash
flows used in financing activities of $25.7 million in 1999 were for the
redemption of preferred stock, preferred dividends and reduction of debt.

         The following table sets forth certain information from the
Company's Consolidated Statements of Cash Flows for the years indicated:

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                       ----------------------------------------------
                                                           2001             2000              1999
                                                       ----------------------------------------------
                                                                        (in millions)
<S>                                                    <C>               <C>              <C>
     Net cash provided by (used in):
     Operating activities                              $     81.7        $     30.6       $     28.0
     Investing activities                                  (111.5)             (1.1)            (1.1)
     Financing activities                                    33.3             (28.6)           (25.7)
</TABLE>


         The Company has certain cash obligations and other commercial
commitments which will impact its short-term liquidity. At December 31,
2001, such obligations and commitments were as follows:

<TABLE>
<CAPTION>

                                                                      Payments Due by Period
                                                --------------------------------------------------------------------
                                                                  Less
                                                                 than 1         1 - 3        4 - 5       After 5
Contractual Obligations                             Total         year          years        years        years
-----------------------                         --------------------------------------------------------------------
                                                                           (in millions)

<S>                                            <C>          <C>            <C>            <C>           <C>
Long-Term Debt                                 $ 544.9      $ 43.3         $   316.0      $ 185.6       $    -

Operating Leases                                  43.2         7.9              16.9          8.0          10.4
                                              ----------------------------------------------------------------------
Total Contractual Cash Commitments             $ 588.1        51.2         $   332.9      $ 193.6       $  10.4
                                              ======================================================================
</TABLE>

Additionally, at December 31, 2001, Mafco Worldwide had obligations to
purchase approximately $9.9 million of raw materials.

         As of December 31, 2001 debt outstanding was comprised of the
following (in millions):

            Mafco Worldwide
                 Amended Credit Agreement - Term Loans                $82.5
                 Other                                                  1.5
                                                                     ---------
                                                                       84.0
            Panavision
            Existing Credit Agreement
                 Term loan                                            198.3
                 Revolving credit facility                             79.0
            9 5/8% Senior Subordinated Discount Notes due 2006        183.5
                                                                     --------
                                                                      460.8

            Las Palmas                                                  0.1
                                                                     ---------

                                                                     $544.9

         The book value of the Existing Notes at December 31, 2001 included
a step-up in basis of $3.8 million recorded in connection with the
Panavision Acquisition. Current maturities under the Mafco Worldwide
Amended Credit Agreement and Panavision's Existing Credit Agreement totaled
$41.8 million at December 31, 2001.

         On April 19, 2001 (the "Closing Date"), Mafco Worldwide entered
into an Amended and Restated Credit Agreement (the "Amended Credit
Agreement") with a group of banks pursuant to which Mafco Worldwide may
borrow up to $105.0 million. The Amended Credit Agreement includes a $90.0
million five-year term loan facility which was fully drawn on the Closing
Date and a $15.0 million five-year revolving loan facility, $5.0 million of
which was drawn on the Closing Date (the "Loans") and $4.6 million was
reserved to support lender guarantees for outstanding letters of credit.
The five-year $90.0 million term loan is repayable in quarterly
installments which commenced on June 30, 2001; totalling $7.5 million in
2001, $13.8 million in 2002, $18.7 million in 2003, $20.0 million in 2004,
$23.7 million in 2005 and $6.3 million in 2006. A mandatory repayment is
required in April of each year based upon prior year excess cash flow (as
the defined in the Amended Credit Agreement). This amount was $4.3 million
at December 31, 2001 and when paid will be applied to reduce amounts that
are due in 2006. The $15.0 million revolving loan is for five years and may
also be used to support lender guarantees for outstanding letters of
credit. The Amended Credit Agreement permits the Company to choose between
various interest rate options and specify the interest rate period to which
the interest rate options are to apply, subject to certain parameters.
Borrowing options available are (i) the Alternate Base Rate Loans ("ABR
Loans") and (ii) Eurodollar Loans, plus a borrowing margin (2.5% on ABR
Loans and 3.5% on Eurodollar Loans at December 31, 2001). The average
interest rate at December 31, 2001 was 5.89%. As of December 31, 2001, $4.6
million of the Revolving Credit Facility was reserved for lender guarantees
on outstanding letters of credit and $10.4 million was available under the
Revolving Credit Facility. Substantially all the domestic assets of Pneumo
Abex are pledged to secure the Amended Credit Agreement. The Amended Credit
Agreement contains various restrictive covenants which include, among other
things, limitations on indebtedness and liens, minimum interest coverage
and maximum leverage ratios, operating cash flow maintenance and
limitations on the sale of assets.

         On June 4, 1998, Panavision entered into the Existing Credit
Agreement. As of December 31, 2001, amounts outstanding under the Existing
Credit Agreement were $198.3 million and $79.0 million for the term
facilities and revolving facility, respectively.

         The Existing Credit Agreement is comprised of two facilities, the
term facility and the revolving facility. The term facility has two
tranches: the Tranche A Term Facility is a 6-year facility in an aggregate
principal amount of $90.0 million and the Tranche B Term Facility is a
7-year facility in an aggregate principal amount of $150.0 million. The
revolving facility is a 6-year facility in an aggregate principal amount of
$100.0 million. The Tranche A Term Facility and the Tranche B Term Facility
are repayable in quarterly installments. Borrowings under the Existing
Credit Agreement bear interest at a rate per annum equal to the Alternate
Base Rate ("ABR") (as defined in the Existing Credit Agreement) or the
Eurodollar Rate (as defined in the Existing Credit Agreement) plus, in each
case, a margin that will be based on the performance of Panavision at
agreed upon levels. The applicable margin at December 31, 2001 on loans
under the revolving facility and the Tranche A Term Facility was 2.75% for
Eurodollar Loans (as defined in the Existing Credit Agreement) and 1.75%
for ABR Loans (as defined in the Existing Credit Agreement). The applicable
margin at December 31, 2001 on loans under the Tranche B Term Facility was
3.00% for Eurodollar Loans and 2.00% for ABR Loans. Panavision may select
interest periods of one, two, three or six months for Eurodollar Loans. If
at any time Panavision is in default in the payment of any amount of
principal due under the Existing Credit Agreement, such amount will bear
interest at 2.00% above the rate otherwise applicable. Overdue interest,
fees and other amounts will bear interest at 2.00% above the rate
applicable to ABR Loans.

         Panavision's obligations under the Existing Credit Agreement are
secured by substantially all of Panavision's assets. The Existing Credit
Agreement requires that Panavision meet certain financial tests and
contains other restrictive covenants including limitations on indebtedness,
leverage ratio levels, interest coverage ratio levels and restrictions on
the ability of Panavision to declare or pay dividends to its stockholders.
As of December 31, 2001, the Company believes that Panavision was in
compliance with all financial covenants contained in the Existing Credit
Agreement.

         At the closing of the Panavision Acquisition, Ronald O. Perelman,
Holdings' sole shareholder, delivered a letter to M & F Worldwide in which
Mr. Perelman agreed that, if M & F Worldwide determines in its good faith
reasonable judgment that Panavision is unable to make required payments of
principal or interest under its Existing Credit Agreement or its Existing
Notes, he or corporations under his control will provide such financial
support to M & F Worldwide as may be required by Panavision in connection
with such payments of principal and interest. The financial support from
Mr. Perelman will be in such amount as M & F Worldwide determines.

         On March 15, 2002, Panavision amended its Existing Credit
Agreement to, among other things, revise certain of the financial tests and
required ratios that Panavision must maintain through December 31, 2002
(the "March Amendment").

         In connection with the March Amendment, Panavision agreed with the
lenders under the Existing Credit Agreement to pay the lenders a fee equal
to 1% of the amount of the Existing Credit Agreement if Panavision does not
reduce amounts outstanding under the Existing Credit Agreement by $100.0
million before June 30, 2002. Under the Existing Credit Agreement, as
amended, it is an event of default if Panavision does not receive $10.0
million in cash in exchange for shares of newly issued Panavision Common
Stock or perpetual preferred stock ("Perpetual Preferred Stock") by June
30, 2002 or it does not apply such amount, promptly after receiving it, as
an optional pre-payment of the revolving credit facility. The Company
currently expects that Panavision will receive such a cash contribution
from one of its affiliates unless the Existing Credit Agreement is
terminated or amended to remove this event of default prior to June 30,
2002. It is also an event of default under the amended Existing Credit
Agreement if Panavision does not receive $37.7 million principal amount at
maturity of the Existing Notes in exchange for shares of Panavision's newly
issued Common Stock or Perpetual Preferred Stock, on the earlier of two
business days after the settlement of the Consolidated Action (see Note 12
to the Company's Consolidated Financial Statements included elsewhere in
this Annual Report on Form 10-K) or June 30, 2002 or cancel such Existing
Notes promptly after receiving them. The board of M & F Worldwide has
approved the acquisition of $37.7 million principal amount at maturity of
the Existing Notes and has also agreed to contribute these Existing Notes
to Panavision in exchange for shares of Panavision's newly issued Perpetual
Preferred Stock and the assumption of related margin debt. The board of
Panavision has approved the issuance of shares of its Perpetual Preferred
Stock in exchange for the contribution of the Existing Notes.

         During 2002, Panavision is required to make principal payments
under its Existing Credit Agreement of $23.7 million.

         In December 2001, M & F Worldwide contributed $24.5 million
aggregate principal amount at maturity of Existing Notes to Panavision in
exchange for 1,381,690 shares of Panavision's Series A Preferred Stock.
After giving effect to this contribution, the Company has approximately
$182.0 million principal amount at maturity of its Existing Notes
outstanding (exclusive of $11.4 million principal amount owned by Pneumo
Abex that have been eliminated in consolidation and a step-up in basis of
$3.8 million less additional amortization of $0.7 million recorded in
connection with the Panavision Acquisition). Panavision is not required to
pay interest on the outstanding Existing Notes until August 1, 2002.

         Panavision intends to use the cash provided by operating
activities to make additional capital expenditures to manufacture camera
systems and accessories and purchase other rental equipment.

         Panavision is currently in discussions to enter into a new credit
agreement (the "New Credit Agreement") to replace the Existing Credit
Agreement. In order to provide Panavision with additional financial and
operating flexibility and to improve its overall capital structure,
Panavision is undertaking a series of related transactions which are
described more fully below and are collectively referred to as the
"Refinancing Transactions." In addition to entering into a New Credit
Agreement, Panavision intends to issue a new series of senior secured
notes. Panavision intends to use the proceeds of the issuance of the new
notes, together with borrowings under the New Credit Agreement, to repay
the Existing Credit Agreement and purchase Panavision's outstanding
Existing Notes. As part of the Refinancing Transactions, Panavision also
anticipates that M & F Worldwide will contribute certain of the Existing
Notes owned by affiliates of Holdings in exchange for shares of
Panavision's Perpetual Preferred Stock.

         The Company currently expects the New Credit Agreement will
provide for aggregate borrowings of up to $180.0 million, of which up to
$150.0 million is currently expected to be a term loan facility, and of
which $30.0 million is currently expected to be a revolving credit
facility.

         The Company also expects that Panavision will retire all of
Panavision's outstanding Existing Notes in the following series of
transactions. M & F Worldwide has agreed to contribute $37.7 million
principal amount at maturity of Existing Notes to Panavision in exchange
for shares of Perpetual Preferred Stock of Panavision. Panavision has
agreed to purchase $24.8 million principal amount at maturity of Existing
Notes held by its affiliates (including $11.4 million principal amount held
by M & F Worldwide) at $400 per $1,000 principal amount. Panavision has
also obtained an option to purchase an aggregate of $78.3 million principal
amount at maturity of Existing Notes at $650 per $1,000 principal amount
from certain unaffiliated holders plus a payment of $70 per $1,000
principal amount for the option which is payable upon the earlier of
Panavision's exercise of the option or its expiration. Finally, Panavision
is commencing a tender offer and consent solicitation in respect of any and
all of the outstanding Existing Notes not purchased in the foregoing
transactions at $650 per $1,000 principal amount. In the consent
solicitation, Panavision is seeking the approval of holders of the Existing
Notes to eliminate substantially all of the restrictive covenants and
certain default provisions from the indenture governing the Existing Notes.

         The Company currently expects that Panavision will consummate the
transactions described above during the second quarter of 2002. However,
there can be no assurance that Panavision will be able to consummate these
refinancing transactions, or any particular transaction, on the terms
described above or at all. In the event that Panavision is unable to
consummate these refinancing transactions, it may be required to seek
additional sources of liquidity in order to meet its obligations under the
Existing Credit Agreement. For example, it could be required to: reduce or
delay capital expenditures; restructure its indebtedness, sell assets or
operations; issue equity; or seek capital contributions or loans from its
affiliates. There can be no assurance that Panavision would be able to take
any of these actions, that these actions would enable it to continue to
satisfy Panavision's capital requirements or that these actions would be
permitted under the terms of its various debt instruments then in effect.

         Although there can be no assurance, the Company believes that
Panavision's and Mafco Worldwide's existing working capital, together with
the borrowings under their respective credit agreements and anticipated
cash flow from operating activities, will be sufficient to meet
Panavision's and Mafco Worldwide's expected operating, capital spending and
debt service requirements at least through December 31, 2002.

         M & F Worldwide is a holding company whose only material asset is
its ownership interest in its subsidiaries. M & F Worldwide's principal
business operations are conducted by its subsidiaries, and M & F Worldwide
has no operations of its own. Accordingly, M & F Worldwide's only source of
cash to pay its obligations is expected to be distributions with respect to
its ownership interest in its subsidiaries. There can be no assurance that
M & F Worldwide's subsidiaries will generate sufficient cash flow to pay
dividends or distribute funds to M & F Worldwide or that applicable state
law and contractual restrictions, including negative covenants contained in
the debt instruments of such subsidiaries, will permit such dividends or
distributions.

Impact of Inflation

         The Company's results of operations and financial condition are
presented based upon historical cost. While it is difficult to measure
accurately the impact of inflation due to the imprecise nature of the
estimates required, the Company believes that the effects of inflation, if
any, on its results of operations and financial condition have been minor.

Market Risk

         The Company is exposed to market risk from changes in foreign
currency exchange rates and interest rates, which could affect its
business, results of operations and financial condition. The Company
manages its exposure to these market risks through its regular operating
and financing activities.

         As of December 31, 2001 and 2000, Mafco Worldwide's net foreign
currency market exposures are primarily the Euro. Most of Mafco Worldwide's
export sales and purchases of licorice raw materials are made in U.S.
dollars. Mafco Worldwide's French subsidiary sells in several foreign
currencies as well as the U.S. dollar and purchases raw materials
principally in U.S. dollars. Panavision's primary net foreign currency
market exposures include the Euro, British pound, French franc, Canadian
dollar, Australian dollar and the New Zealand dollar. At the present time,
the Company does not generally hedge against foreign currency fluctuation.
Management does not foresee nor expect any significant changes in foreign
currency exposure in the near future.

         As of December 31, 2001 and 2000, a 10% appreciation in foreign
currency exchange rates from the prevailing market rates would increase the
related net unrealized gain by $1.6 million and $0.0 million, respectively.
Conversely, a 10% depreciation in these currencies from the prevailing
market rates would decrease the related net unrealized gain by $2.6 million
and $3.0 million, as of December 31, 2001 and 2000, respectively.

         The Company is exposed to changes in interest rates on its
variable rate debt. A hypothetical 10% increase in the interest rates
applicable to 2001 and 2000 would have resulted in an increase to interest
expense of approximately $2.0 million and $0.3 million, respectively.
Conversely, a hypothetical 10% decrease in the interest rates applicable to
2001 and 2000 would have decreased interest expense by approximately $2.0
million and $0.3 million, respectively. At December 31, 2001, the Company
believes that the carrying value of its amounts payable under Mafco
Worldwide's Amended Credit Agreement and Panavision's Existing Credit
Agreement approximate fair value based upon current yields for debt issues
of similar quality and terms.

         The fair value of the Company's fixed rate long-term debt is
sensitive to changes in interest rates. Based upon a hypothetical 10%
increase in the interest rate, assuming all other conditions affecting
market risk remain constant, the market value of the Company's fixed rate
debt would decrease approximately $1.2 million and $7.9 million at December
31, 2001 and 2000, respectively. Conversely, a hypothetical 10% decrease in
the interest rate and assuming all other conditions affecting market risk
remain constant, would result in an increase in market value of
approximately $1.2 million and $8.3 million over the same period.
Management does not foresee nor expect any significant changes in its
exposure to interest rate fluctuations or in how such exposure is managed
in the future.

         The Company manages its fixed and floating rate debt with the
objective of achieving a mix that management believes is appropriate. To
manage this mix in a cost-effective manner, the Company, from time to time,
has entered into interest rate swap agreements, in which it agrees to
exchange various combinations of fixed and/or variable interest rates based
upon agreed upon notional amounts. Neither the Company nor its subsidiaries
had any interest rate swap agreements in effect at December 31, 2001.
Management does not foresee nor expect any significant changes in its
exposure to interest rate fluctuations or in how such exposure is managed.

Tax Matters

         In connection with the Abex Merger and the Transfer, MCG and the
Company entered into a tax sharing agreement. Under the indemnification
provisions of the tax sharing agreement and with respect to periods ending
on or prior to June 15, 1995, MCG will generally be required to pay any tax
liabilities of the Company, except for foreign income taxes related to
Aerospace. At December 31, 2001, the Company had available net operating
loss carryforwards of approximately $50.0 million, which expire in years
2003 through 2011.

         In connection with the closing of the Panavision Acquisition,
Panavision, for federal income and certain state and local tax purposes,
became a member of the affiliated group of which M & F Worldwide is the
common parent and left the affiliated group of which Holdings is the common
parent. In connection with such event, Panavision, certain of its
subsidiaries and M & F Worldwide entered into the Panavision Tax Sharing
Agreement, pursuant to which Panavision, certain of its subsidiaries and M
& F Worldwide agreed to allocate and share any liabilities which arise by
virtue of the parties being consolidated for federal, and certain state and
local, income tax purposes. Pursuant to the Panavision Tax Sharing
Agreement, for all taxable periods beginning on or after April 19, 2001,
Panavision will pay to M & F Worldwide amounts equal to the taxes that the
Company would otherwise have to pay if it were to file separate federal,
state or local income tax returns. As of February 1, 1999, Panavision and
certain of its subsidiaries and Holdings entered into the Mafco Tax Sharing
Agreement, containing terms and conditions substantially the same as those
in the Panavision Tax Sharing Agreement. The Mafco Tax Sharing Agreement
governed tax matters between Panavision and Holdings for the period from
February 1, 1999 through April 18, 2001 and continues in effect as to
post-Holdings consolidation matters such as audit adjustments and
indemnities.

Other Liquidity Risks

         Licorice Root Extract Supply

         In addition to the liquidity risks noted above, Mafco Worldwide
may encounter liquidity risks arising from its supply of licorice extract.
Mafco Worldwide tries to maintain a sufficient licorice root inventory and
open purchase contracts to meet minimum production needs for two years. At
December 31, 2001, Mafco Worldwide had on hand approximately a three-year
supply of root. Licorice root has an indefinite retention period as long as
it is kept dry, and therefore Mafco Worldwide has experienced little, if
any, material spoilage. Although Mafco Worldwide has been able to obtain
licorice root without interruption since World War II, since there has been
periodic instability in the areas of the world where licorice root grows,
Mafco Worldwide may in the future experience a short supply of licorice
root due to these or other instabilities. If Mafco Worldwide is unable to
obtain licorice root, or is unable to obtain licorice root in a
cost-effective manner, Mafco Worldwide's business will be severely hampered
and the Company will experience severe liquidity difficulties.

         Customers

         In 2001, Mafco Worldwide's ten largest customers, seven of which
are manufacturers of tobacco products, accounted for approximately 64% of
Mafco Worldwide's net revenues and one customer, Philip Morris, accounted
for approximately 31% of Mafco Worldwide's 2001 sales. If Philip Morris
were to stop purchasing licorice from Mafco Worldwide, it would have a
significant adverse effect on the financial results of Mafco Worldwide,
which would also create severe liquidity problems for the Company.

         Corporate Indemnification Matters

         Prior to 1988, a former subsidiary of the Company manufactured
certain asbestos-containing friction products. Pneumo Abex has been named,
typically along with 10 to as many as 100 or more other companies, as a
defendant in various personal injury lawsuits claiming damages relating to
exposure to asbestos. Pursuant to indemnification agreements, the Original
Indemnitor has retained ultimate responsibility for asbestos-related claims
made through August 1998 and for certain asbestos-related claims asserted
thereafter. In connection with the sale by Abex in December 1994 of its
Friction Products Division, the Second Indemnitor assumed responsibility
for substantially all of the asbestos-related claims made after August
1998. Federal-Mogul Corporation purchased the Second Indemnitor in October
1998. In October 2001, the Second Indemnitor filed a petition under Chapter
11 of the U.S. Bankruptcy Code and stopped performing its indemnity
obligations to the Company. Performance of the Second Indemnitor's
indemnity obligation is guaranteed by the Indemnity Guarantor. Following
the bankruptcy filing of the Second Indemnitor, the Indemnity Guarantor
confirmed that it will fulfill the Second Indemnitor's indemnity
obligations to the extent that they are no longer being performed by the
Second Indemnitor for all claims other than a small portion of the
indemnified asbestos-related claims. As to that portion, the Company and
MCG in November 2001 commenced the Arbitration against the Indemnity
Guarantor seeking, among other things, an order confirming the Indemnity
Guarantor's obligation and reimbursement of amounts that the Company has
been required to advance on the Indemnity Guarantor's behalf in the
interim. The Indemnity Guarantor has filed two counterclaims in the
Arbitration. The first seeks an offset to the Company's claim for
reimbursement for any amount that the Indemnity Guarantor claims should
have been payable by insurance, to the extent that the Company prevails in
its claim. The second counterclaim seeks reimbursement of amounts the
Indemnity Guarantor has paid with respect to these claims to the extent
that the Arbitration panel upholds its position on the scope of the
indemnity. The Company expects that all presentations in the Arbitration
will be complete by May, 2002 and that it will prevail in all respects.
Accordingly, at December 31, 2001 the Company has not recorded any reserve
against its outstanding receivable of $2.8 million with the Indemnity
Guarantor.

         Pneumo Abex's former subsidiary maintained product liability
insurance covering substantially all of the period during which
asbestos-containing products were manufactured. The subsidiary commenced
litigation in 1982 against a portion of these insurers in order to confirm
the availability of this coverage. As a result of settlements in that
litigation, other coverage agreements with other carriers and payments by
the Original Indemnitor, the Second Indemnitor and the Indemnity Guarantor
pursuant to their indemnities, Pneumo Abex is receiving reimbursement in
full each month for its monthly expenditures for asbestos-related claims
other than expenses for the claims subject to the Arbitration. Pneumo Abex
is unable to forecast either the number of future asbestos-related
claimants or the amount of future defense and settlement costs associated
with present or future asbestos-related claims.

         The Transfer Agreement further provides that MCG will indemnify
Pneumo Abex with respect to all environmental matters associated with
Pneumo Abex's and its predecessor's operations to the extent not paid by
third-party indemnitors or insurers, other than the operations relating to
Pneumo Abex's Aerospace business which were sold to Parker Hannifin
Corporation in April 1996. Accordingly, environmental liabilities arising
after the 1988 transaction with the Original Indemnitor that relate to the
Company's former Aerospace facilities will be the responsibility of Pneumo
Abex. The Original Indemnitor is obligated to indemnify Pneumo Abex for
costs, expenses and liabilities relating to environmental and natural
resource matters to the extent attributable to the pre-1988 operation of
the businesses acquired from the Original Indemnitor, subject to certain
conditions and limitations principally relating to compliance with notice,
cooperation and other procedural requirements. The Original Indemnitor is
generally discharging its environmental indemnification liabilities in the
ordinary course.

         It is generally not possible to predict the ultimate total costs
relating to any remediation that may be demanded at any of the sites
subject to the indemnity from the Original Indemnitor due to, among other
factors, uncertainty regarding the extent of prior pollution, the
complexity of applicable environmental laws and regulations and their
interpretations, uncertainty regarding future changes to such laws and
regulations or their enforcement, the varying costs and effectiveness of
alternative cleanup technologies and methods, and the questionable and
varying degrees of responsibility and/or involvement by Pneumo Abex.
However, the aggregate cost of cleanup and related expenses with respect to
matters for which Pneumo Abex, together with numerous other third parties,
have been named potentially responsible parties should be substantially
less than $150.0 million, including approximately $10.0 million in remedial
action costs in respect of one site actively managed and funded by the
Original Indemnitor.

         On February 5, 1996, the Company, through Pneumo Abex, entered
into the Reimbursement Agreement. The Reimbursement Agreement provides for
letters of credit totaling $20.8 million covering certain environmental
issues relating to such site and not related to the current business of
Pneumo Abex. During 2000, the Environmental Protection Agency reduced the
letter of credit requirements to $2.2 million. The cost of the letters of
credit are being funded by MCG and/or the Original Indemnitor. Pneumo Abex
had $2.2 million of letters of credit outstanding at both December 31, 2001
and 2000, respectively, in connection with the Reimbursement Agreement.

         The Company has not recognized any liability in its financial
statements for matters covered by indemnification agreements. The Company
considers these obligations to be those of third-party indemnitors and
monitors their financial positions to determine the level of uncertainty
associated with their ability to satisfy their obligations. Based upon the
indemnitors' active management of indemnifiable matters, discharging of the
related liabilities when required, and financial positions based upon
publicly filed financial statements, as well as the history of insurance
recovery set forth above, the Company believes that the likelihood of
failing to obtain reimbursement of amounts covered by insurance and
indemnification is remote.

         During 1999, the Original Indemnitor and Pneumo Abex conducted an
arbitration concerning certain aspects of the scope of the indemnity from
the Original Indemnitor. On March 6, 2000, the arbitration panel issued its
decision confirming that the indemnity applies as described herein, except
that it did not extend to 87 asbestos-related claims, all of which have
been resolved previously.

         Various legal proceedings, claims and investigations are pending
against M & F Worldwide and Pneumo Abex, including those relating to
commercial transactions, product liability, safety and health matters and
other matters. M & F Worldwide and Pneumo Abex are involved in various
stages of legal proceedings, claims, investigations and cleanup relating to
environmental or natural resource matters, some of which relate to waste
disposal sites. Most of these matters are covered by insurance, subject to
deductibles and maximum limits, and by third-party indemnities.

         The former Aerospace business of the Company formerly sold certain
of its aerospace products to the U.S. Government or to private contractors
for the U.S. Government. Certain claims for allegedly defective pricing
made by the government with respect to certain of these aerospace product
sales were retained by Pneumo Abex in the Aerospace sale and remain
outstanding. In each case Pneumo Abex contests the allegations made by the
government and has been attempting to resolve these matters without
litigation.

         Panavision and its subsidiaries are defendants in actions for
matters arising out of normal business actions.

         The Company believes that the outcome of such pending legal
proceedings in the aggregate will not have a material adverse effect on the
Company's consolidated financial position or results of operations. The
Company carries general liability insurance but has no health hazard
policy, which, to the best of the Company's knowledge, is consistent with
industry practice.

Forward-Looking Statements

         This annual report on Form 10-K for the year ended December 31,
2001, as well as certain of the Company's other public documents and
statements and oral statements, contains forward-looking statements that
reflect management's current assumptions and estimates of future
performance and economic conditions. Such statements are made in reliance
upon the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. The Company cautions investors that any forward-looking
statements are subject to risks and uncertainties that may cause actual
results and future trends to differ materially from those projected, stated
or implied by the forward-looking statements. In addition, the Company
encourages investors to read the summary of the Company's critical
accounting policies under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Introduction."

         In addition to factors described in the Company's Securities and
Exchange Commission filings and others, the following factors could cause
the Company's actual results to differ materially from those expressed in
any forward-looking statements made by the Company: (a) a significant
reduction in the number of feature film, commercial and series television
productions; (b) competitive pressures arising from changes in technology,
customer requirements and industry standards; (c) an increase in expenses
related to new product initiatives and product development efforts; (d)
unfavorable foreign currency fluctuations; (e) significant increases in
interest rates; (f) economic, climatic or political conditions in countries
in which the Company sources licorice root; (g) economic, climatic or
political conditions that have an impact on the worldwide tobacco industry
or on the consumption of tobacco products in which licorice extract is
used; (h) additional government regulation of tobacco products, tobacco
industry litigation or enactment of new or increased taxes on cigarettes or
other tobacco products, to the extent any of the foregoing curtail growth
in or actually reduce consumption of tobacco products in which licorice
extract is used; (i) the failure of third parties to make full and timely
payment to the Company for environmental, asbestos, tax and other matters
for which the Company is entitled to indemnification; (j) any inability to
obtain indemnification for any significant group of asbestos-related claims
pending against the Company; (k) a substantially adverse result in the
pending shareholder litigation; (l) lower than expected cash flows from
operations; and (m) the inability to secure capital contributions or loans
from affiliates, refinance its indebtedness or sell its equity securities.
The Company assumes no responsibility to update the forward-looking
statements contained in this Annual Report on Form 10-K.

Item 8.  Financial Statements and Supplementary Data

         See the financial statements and supplementary data listed in the
accompanying Index to Consolidated Financial Statements and Financial
Statement Schedule on page F-1 herein. Information required by other
schedules called for under Regulation S-X is either not applicable or is
included in the financial statements or notes thereto.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None.


                                  PART III

         The information required by Part III, Items 10 through 13, of Form
10-K is incorporated by reference from the Registrant's definitive proxy
statement for its 2001 annual meeting of stockholders, which is to be filed
pursuant to Regulation 14A not later than April 30, 2002.


                                  PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)      (1 and 2) Financial statements and financial statement schedule.
         See Index to Consolidated Financial Statements and Financial
         Statement Schedule, which appears, on page F-1 herein.

         All other schedules for which provision is made in the applicable
accounting regulation of the Securities Exchange Commission (SEC) are not
required under the related instructions or are inapplicable and therefore
have been omitted.

(3)      Exhibits

         Exhibit No.      Description

         2.1              Stock Purchase Agreement, dated as of April 19,
                          2001 by and between PX Holding Corporation and M
                          & F Worldwide Corp. (incorporated by reference to
                          Exhibit 2.1 to M & F Worldwide Corp.'s Form 8-K
                          dated April 20, 2001).

         3.1              Restated Certificate of Incorporation of the
                          Company (incorporated by reference to Exhibit 3.1
                          to M & F Worldwide's Form 8-K dated April 30,
                          1996).

         3.2              By-Laws of the Company as currently in effect
                          (incorporated by reference to Exhibit 3.2 to M &
                          F Worldwide's Form 10-K dated December 31, 1995).

         4.1              Registration Rights Agreement, dated as of April
                          19, 2001, by and between PX Holding Corporation
                          and M & F Worldwide Corp. (incorporated by
                          reference to Exhibit 4.1 to M & F Worldwide
                          Corp.'s Form 8-K dated April 20, 2001).

         4.2              Certificate of Designation, Powers, Preferences
                          and Rights of Series B Non-Cumulative Perpetual
                          Participating Preferred Stock of M & F Worldwide
                          Corp. (incorporated by reference to Exhibit 4.2
                          to M & F Worldwide Corp.'s Form 8-K dated April
                          20, 2001).

         4.3              Registration Rights Transfer Agreement, dated as
                          of April 19, 2001, by and between PX Holding
                          Corporation, Panavision Inc. and M & F Worldwide
                          Corp. (incorporated by reference to Exhibit 4.3
                          to M & F Worldwide Corp.'s Form 8-K dated April
                          20, 2001).

         10.1             Transfer Agreement among the Company, MCG
                          Intermediate Holdings Inc., Pneumo Abex and PCT
                          International Holdings Inc. (incorporated by
                          reference to Exhibit 10.1 to PCT's Current Report
                          on Form 8-K dated June 28, 1995).

         10.2             Registration Rights Agreement between Mafco and
                          the Company (incorporated by reference to Exhibit
                          2 to the Schedule 13D dated June 26, 1995 filed
                          by Holdings Inc., MCG Holdings Inc. and Mafco in
                          connection with the Company's capital stock).

         10.3             Letter Agreement, dated as of June 26, 1995,
                          between the Company and Mafco (incorporated by
                          reference to Exhibit 10.2 to the Company's
                          Current Report on Form 8-K dated June 28, 1995).

         10.4             Letter Agreement, dated as of February 5, 1996,
                          between the Company and Mafco (incorporated by
                          reference to Exhibit 6 to Amendment No. 2 to
                          Schedule 13D dated February 8, 1996 filed by
                          Holdings Inc., MCG Holdings Inc. and Mafco in
                          connection with the Company's capital stock).

         10.5             Stock Purchase Agreement, dated April 28, 1988,
                          between Pneumo Abex and Whitman Corporation
                          (incorporated by reference to Exhibit 2.1 to
                          Pneumo Abex's Registration Statement on Form S-1,
                          Commission File No. 33-22725) as amended by an
                          Amendment, dated as of August 29, 1988, and a
                          Second Amendment and related Settlement
                          Agreement, dated September 23, 1991 (incorporated
                          by reference to exhibit 10.4 to Abex Inc.'s
                          Annual Report on Form 10-K for 1992).

         10.6             M & F Worldwide 1995 Stock Plan (the "1995 Stock
                          Plan") for employees of the Company and employees
                          of affiliated corporations (incorporated by
                          reference to Annex C to the Proxy
                          Statement/Prospectus included in the Company's
                          Registration Statement on Form S-1 (File No.
                          33-92186)), as amended (incorporated by reference
                          to exhibit 10.19 to M & F Worldwide Corp.'s Form
                          10-K for 1996).

         10.7             Employment agreement, dated January 7, 1997,
                          between the Registrant and J. Eric Hanson
                          (incorporated by reference to exhibit 10.24 to M
                          & F Worldwide Corp.'s Form 10-K for 1996).

         10.8             The Company's 1997 Stock Option Plan
                          (incorporated by reference to exhibit 10.25 to M
                          & F Worldwide Corp.'s Form 10-K for 1996).

         10.9             Credit Agreement dated as of November 17, 1997
                          among Pneumo Abex, the lenders (as defined in the
                          Credit Agreement), Chase Manhattan Bank, Chase
                          Securities Inc., Bank Boston, N.A. and Chase
                          Manhattan Bank Delaware (incorporated by
                          reference to exhibit 10.27 to M & F Worldwide
                          Corp.'s Form 10-K for 1997).

         10.10            Contract dated as of May 31, 1997 between Mafco
                          Worldwide and Licorice and Paper Employees
                          Association of Camden, New Jersey AFL-CIO
                          (incorporated by reference to exhibit 10.28 to M
                          & F Worldwide Corp.'s Form 10-K for 1997).

         10.11            First Amendment, dated as of April 1, 1999, to
                          the Credit Agreement dated as of November 17,
                          1997 (Exhibit 10.9).

         10.12            Second Amendment, dated as of November 23, 1999,
                          to the Credit Agreement dated as of November 17,
                          1997 (Exhibit 10.9).

         10.13            Amendment Number Three, dated as of April 24,
                          2000, to the Credit Agreement dated as of
                          November 17, 1997 (Exhibit 10.9).

         10.14            Employment agreements, dated August 1, 2000,
                          between the Registrant and Stephen G. Taub,
                          Pramathesh S. Vora, and Peter W. Grace.

         10.15            Amendment dated as of July 6, 1999, to employment
                          agreement dated January 7, 1997 between the
                          Registrant and J. Eric Hanson (Exhibit 10.7).

         10.16            The Company's 2000 Stock Option Plan for
                          employees of the Registrant and employees of
                          affiliated corporations (incorporated by
                          reference to exhibit 99.1 to M & F Worldwide's
                          Registrant Statement on Form S-8, Commission File
                          No. 333-9162).

         10.17            Letter Agreement, dated as of April 19, 2001, by
                          and between Ronald O. Perelman and M & F
                          Worldwide Corp. (incorporated by reference to
                          Exhibit 99.1 to M & F Worldwide Corp.'s Form 8-K
                          dated April 20, 2001).

         10.18            Tax Sharing Agreement, dated as of April 19,
                          2001, by and among Panavision Inc., certain of
                          its subsidiaries and M & F Worldwide Corp.
                          (incorporated by reference to Exhibit 99.2 to M &
                          F Worldwide Corp.'s Form 8-K dated April 20,
                          2001).

         10.19            Credit Agreement, dated as of April 19, 2001, by
                          and among Flavors Holdings Inc., the Lenders
                          party thereto, BNP Paribas, as Documentation
                          Agent and The Chase Manhattan Bank, as Paying
                          Agent (incorporated by reference to Exhibit 99.3
                          to M & F Worldwide Corp.'s Form 8-K dated April
                          20, 2001).

         10.20            Guarantee and Collateral Agreement, dated as of
                          April 19, 2001, by and among Pneumo Abex
                          Corporation, Flavors Holdings Inc., PVI
                          Acquisition Corp., EVD Holdings Inc., Concord
                          Pacific Corporation, the Lenders party thereto,
                          BNP Paribas, as Documentation Agent and The Chase
                          Manhattan Bank as Paying Agent (incorporated by
                          reference to Exhibit 99.4 to M & F Worldwide
                          Corp.'s Form 8-K dated April 20, 2001).

         10.21            Mafco Letter Agreement, dated as of April 19,
                          2001, by and between Holdings Inc. and M & F
                          Worldwide Corp. (incorporated by reference to
                          Exhibit 99.5 to M & F Worldwide Corp.'s Form 8-K
                          dated April 20, 2001).

         10.22            M & F Worldwide Letter, dated as of April 19,
                          2001, delivered by M & F Worldwide Corp. to
                          Panavision Inc. (incorporated by reference to
                          Exhibit 99.6 to M & F Worldwide Corp.'s Form 8-K
                          dated April 20, 2001).

         10.23            Amendment to the Company's By-laws concerning the
                          advance notice provision (incorporated by
                          reference to Exhibit 10.23 to M & F Worldwide
                          Corp.'s Form 10-Q dated August 14, 2001).

         10.24*           Letter Agreement relating to the Mafco
                          Disbursement, dated December 21, 2001, between
                          Holdings, Inc. and M & F Worldwide Corp.

         10.25*           Letter Agreement, dated December 21, 2001,
                          between Holdings, Inc. and M & F Worldwide Corp.

         10.26*           Letter dated December 21, 2001, from M & F
                          Worldwide Corp. to Panavision Inc.

         10.27*           Registration Rights Letter Agreement, dated
                          December 21, 2001, by and between PX Holding
                          Corporation and M & F Worldwide Corp.

         10.28*           Registration Rights Letter Agreement, dated
                          December 21, 2001, by and between Panavision Inc.
                          and M & F Worldwide Corp.

         10.29*           Employment agreement dated August 1, 2001,
                          between the Registrant and Stephen G. Taub

         21*              List of subsidiaries

         23.1*            Consent of Independent Auditors

         24*              Powers of attorney executed by Messrs. Perelman,
                          Durnan, Folz, Gittis, Hookstratten, Hanson,
                          Liebman, Meister, Slovin, and Taub

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

(b)      Reports on Form 8-K:

         None.


                                 SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereto duly authorized.


                                         M & F WORLDWIDE CORP.


Dated:  March 29, 2002                   By: /s/ Howard Gittis
                                              -------------------------------
                                                 Howard Gittis
                                                 Chairman of the Board,
                                                 President and Chief Executive
                                                 Officer


Dated:  March 29, 2002                   By: /s/ Todd J. Slotkin
                                             -------------------------------
                                                 Todd J. Slotkin
                                                 Executive Vice President and
                                                 Chief Financial Officer
                                                 (Principal Financial Officer)


Dated:  March 29, 2002                   By: /s/Peter W. Grace
                                             -------------------------------
                                                Peter W. Grace
                                                Principal Accounting Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and of the dates indicated.


         Signature                        Title              Date


      Ronald O. Perelman *             Director           March 29, 2002
-----------------------------------
      Ronald O. Perelman


      Jaymie A. Durnan *               Director           March 29, 2002
-----------------------------------
      Jaymie A. Durnan


      Theo W. Folz *                   Director           March 29, 2002
-----------------------------------
      Theo W. Folz


      Howard Gittis *                  Director           March 29, 2002
-----------------------------------
      Howard Gittis


      J. Eric Hanson *                 Director           March 29, 2002
-----------------------------------
      J. Eric Hanson


      Ed Gregory Hookstratten *        Director           March 29, 2002
-----------------------------------
      Ed Gregory Hookstratten


      Lance A. Liebman *               Director           March 29, 2002
-----------------------------------
      Lance A. Liebman


      Paul M. Meister *                Director           March 29, 2002
-----------------------------------
      Paul M. Meister


      Bruce Slovin *                   Director           March 29, 2002
-----------------------------------
      Bruce Slovin


      Stephen G. Taub *                Director           March 29, 2002
-----------------------------------
      Stephen G. Taub


*    The undersigned by signing his name hereto does hereby execute this
     Form 10-K pursuant to powers of attorney filed as exhibits to this
     Form 10-K.


Dated:  March 29, 2002                      By:  /s/ Glenn P. Dickes
                                                 ----------------------------
                                                     Glenn P. Dickes
                                                     Attorney-in-Fact




                   M & F WORLDWIDE CORP. AND SUBSIDIARIES

                     Item 8, Item 14 (a)(1) and (2) and
             (d) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
                        FINANCIAL STATEMENT SCHEDULE
                        YEAR ENDED DECEMBER 31, 2001



            The following consolidated financial statements of M & F
Worldwide are included in Item 8:

            As of December 31, 2001 and 2000 and for the years ended
December 31, 2001, 2000 and 1999.

                                                                        Pages

Report of Independent Auditors.......................................... F-2

Consolidated Balance Sheets............................................. F-3

Consolidated Statements of Operations................................... F-4

Consolidated Statements of Stockholders' Equity......................... F-5

Consolidated Statements of Cash Flows................................... F-6

Notes to Consolidated Financial Statements.............................. F-7

The following financial statement schedules of
M & F Worldwide are included in Item 14(a):

Schedule I - Condensed Financial Information of Registrant.............. F-34

Schedule II - Valuation and Qualifying Accounts and Reserves............ F-39

         All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and, therefore,
have been omitted.



                       REPORT OF INDEPENDENT AUDITORS



The Board of Directors and Stockholders
M & F Worldwide Corp.

We have audited the accompanying consolidated balance sheets of M & F
Worldwide Corp. and subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31,
2001. Our audits also included the financial statement schedules listed in
the Index at Item 14(a). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of M & F Worldwide Corp. and subsidiaries at December 31, 2001 and
2000, and the consolidated results of their operations and cash flows for
each of the three years in the period ended December 31, 2001, in
conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a
whole, present fairly in all material respects the information set forth
therein.



                                             Ernst & Young LLP


New York, New York
February 28, 2002, except for Note 10,
as to which the date is March 28, 2002

<TABLE>
<CAPTION>

                                          M & F Worldwide Corp. and Subsidiaries
                                               Consolidated Balance Sheets
                                           (in millions, except per share data)

                                                                                                      December 31,
                                                                                               ----------------------------
                                                                                                   2001           2000
                                                                                               -------------   ------------
                                           ASSETS
Current assets:
<S>                                                                                            <C>              <C>
      Cash and cash equivalents                                                                $        6.2     $    2.6
      Accounts receivable (net of allowances of $1.7 and $0.2)                                         35.6          9.6
      Inventories                                                                                      62.3         48.5
      Prepaid expenses and other                                                                       13.2          2.4
                                                                                               -------------   ------------
Total current assets                                                                                  117.3         63.1
Property, plant and equipment, net                                                                    255.3         22.5
Intangibles assets related to business acquired, net                                                  507.5        150.5
Deferred tax asset                                                                                      0.4         26.8
Pension asset                                                                                          13.2         33.9
Other                                                                                                  18.4          2.0
                                                                                               -------------   ------------
Total assets                                                                                    $     912.1     $  298.8
                                                                                               =============   ============
                            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Short term borrowings                                                                     $       1.5     $    0.4
      Accounts payable                                                                                 14.1          4.1
      Accrued liabilities                                                                              33.9         14.6
      Current maturities of long-term debt                                                             41.8           -
                                                                                               -------------   ------------
Total current liabilities                                                                              91.3         19.1
Long-term debt                                                                                        501.6         29.0
Deferred tax liabilities                                                                               16.6          1.7
Other liabilities                                                                                       6.7          3.3
Commitments and contingencies                                                                            -            -
Stockholders' equity:
      Common stock, par value $.01;  250,000,000 shares authorized;
           20,663,171 shares issued at December 31, 2001 and 2000                                       0.2          0.2
      Preferred stock, liquidation value $6.50;
           6,848,820 shares issued (aggregate liquidation preference of $44.5 plus declared
           and unpaid dividends)                                                                       41.7           -
      Additional paid-in capital                                                                       27.9         27.0
      Treasury stock at cost
           1,041,900 shares at December 31, 2001; 1,541,900 shares at December 31, 2000                (6.7)        (8.7)
       Retained earnings                                                                              241.3        235.4
      Accumulated other comprehensive loss                                                             (8.5)        (8.2)
                                                                                               -------------   ------------
            Total stockholders' equity                                                                295.9        245.7
                                                                                               -------------   ------------
Total liabilities and stockholders' equity                                                      $     912.1     $  298.8
                                                                                               =============   ============


               See Notes to Consolidated Financial Statements

</TABLE>

<TABLE>
<CAPTION>


                                          M & F Worldwide Corp. and Subsidiaries
                                          Consolidated Statements of Operations
                                           (in millions, except per share data)
                                                                                        Year Ended December 31,
                                                                              ---------------------------------------------
                                                                                   2001            2000           1999
                                                                              ---------------  -------------   ------------
<S>                                                                            <C>              <C>             <C>
Net revenues
      Panavision
         Rental income                                                         $   101.1        $    -          $    -
         Sales and other                                                            23.9             -               -
       Mafco Worldwide                                                              98.4           93.1            97.3
                                                                              ---------------  -------------   ------------
         Total revenues                                                            223.4           93.1            97.3
Cost of revenues
      Panavision
         Cost of rentals                                                            58.8             -               -
         Cost of sales                                                              13.3             -               -
       Mafco Worldwide                                                              51.6           49.2            51.2
                                                                              ---------------  -------------   ------------
         Total cost of revenues                                                    123.7           49.2            51.2
                                                                              ---------------  -------------   ------------
 Gross profit                                                                       99.7           43.9            46.1
 Selling, general and administrative expenses                                       62.2            8.9            11.6
 Shareholder litigation settlement                                                   4.5             -               -
 Gain on pension reversion                                                         (11.1)            -               -
                                                                              ---------------  -------------   ------------
 Operating income                                                                   44.1           35.0            34.5
 Interest expense, net                                                             (31.8)          (3.0)           (2.7)
 Foreign exchange gain                                                               0.2            0.2             0.2
 Other loss, net                                                                    (0.2)            -             (0.1)
                                                                              ---------------  -------------   ------------
 Income before income taxes and net extraordinary gain                              12.3           32.2            31.9
 Provision for income taxes                                                        (10.5)         (13.1)          (12.8)
                                                                              ---------------  -------------   ------------
 Income before net extraordinary gain                                                1.8           19.1            19.1
 Net extraordinary gain, net of taxes                                                4.3             -               -
                                                                              ---------------  -------------   ------------
 Net income                                                                          6.1           19.1            19.1
 Preferred stock dividends                                                          (0.2)            -             (1.5)
                                                                              ---------------  -------------   ------------
 Net income available to shareholders                                          $     5.9       $   19.1        $   17.6
                                                                              ===============  =============   ============
Basic earnings per share:
      Common stock-undistributed earnings
        before net extraordinary gain                                          $     0.06      $    0.96        $   0.85
      Common stock-undistributed net extraordinary gain                              0.18            -               -
                                                                              ---------------  -------------   ------------
        Total common stock                                                     $     0.24      $    0.96        $   0.85
                                                                              ===============  =============   ============
Diluted earnings per share:
      Common stock-undistributed earnings
        before net extraordinary gain                                          $     0.06      $    0.96        $   0.83
      Common stock-undistributed net extraordinary gain                              0.18            -               -
                                                                             ----------------  -------------  ------------
       Total common stock                                                      $     0.24      $    0.96        $   0.83
                                                                             ================  =============  ============
Basic and diluted earnings per preferred share:
      Preferred stock-distributed earnings                                     $     0.05      $      -         $    -
      Preferred stock-undistributed earnings
        before net extraordinary gain                                                 0.06            -              -
      Preferred stock-undistributed net extraordinary gain                            0.18            -              -
                                                                              ---------------  -------------   ------------
        Total preferred stock                                                  $      0.29     $      -         $    -
                                                                              ===============  =============   ============

               See Notes to Consolidated Financial Statements

</TABLE>

<TABLE>
<CAPTION>

                                            M & F Worldwide Corp. and Subsidiaries
                                       Consolidated Statements of Stockholders' Equity
                                             (in millions, except per share data)

                                                                                                     Accumulated
                                                                   Additional  Treasury                 Other
                                               Common   Preferred   Paid-in     Stock     Retained  Comprehensive
                                               Stock      Stock     Capital    At cost    Earnings       Loss         Total

<S>                                            <C>       <C>       <C>        <C>         <C>         <C>           <C>
Balance, December 31, 1998                     $  0.2    $   -     $   26.7   $   -       $  198.7    $   (2.5)     $  223.1
     Net income                                                                               19.1                      19.1
     Currency translation adjustment                                                                      (3.9)         (3.9)
                                                                                                                    ---------
     Comprehensive income                                                                                               15.2
     Exercise of stock options, net of tax                              0.1                                              0.1
     Preferred stock dividends                                                                (1.5)                     (1.5)
                                               ------    -------    --------  --------    ---------   ---------     ---------
Balance, December 31, 1999                        0.2        -         26.8       -          216.3        (6.4)         236.9
     Net income                                                                               19.1                       19.1
     Currency translation adjustment                                                                      (1.6)         (1.6)
     Minimum pension liability                                                                            (0.2)         (0.2)
                                                                                                                     --------
     Comprehensive income                                                                                               17.3
                                                                                                                     --------
     Purchase of treasury common stock                                          (8.7)                                   (8.7)
     Capital contribution                                               0.2                                              0.2
                                               -------    -------    -------  -------      -------      -------      --------
Balance, December 31, 2000                        0.2        -         27.0     (8.7)        235.4        (8.2)        245.7

     Net income                                                                                6.1                       6.1
     Currency translation adjustment                                                                      (0.1)         (0.1)
     Minimum pension liability                                                                            (0.2)         (0.2)
                                                                                                                      --------
     Comprehensive income                                                                                                5.8
                                                                                                                      --------
     Issuance of treasury common stock                                 (0.8)     8.5                                     7.7
     Purchase of treasury common stock                                          (6.5)                                   (6.5)
     Issuance of preferred stock                           41.7                                                         41.7
     Preferred stock dividends                                                                (0.2)                     (0.2)
     Capital contributions                                              1.7                                              1.7
                                            ---------  --------     --------   -------     --------     -------      ---------
Balance, December 31, 2001                  $     0.2   $  41.7     $  27.9    $(6.7)      $  241.3     $ (8.5)      $ 295.9
                                            =========  ========     ========   =======     ========     =======      =========


                                           See Notes to Consolidated Financial Statements
</TABLE>


<TABLE>
<CAPTION>

                                          M & F Worldwide Corp. and Subsidiaries
                                          Consolidated Statements of Cash Flows
                                           (in millions, except per share data)

                                                                                      Year Ended December 31,
                                                                           ----------------------------------------------
                                                                              2001              2000            1999
                                                                           ------------     -------------    ------------
Operating activities
<S>                                                                             <C>             <C>             <C>
Net income                                                                      $6.1            $19.1           $19.1
Adjustments to derive net cash provided by operating activities:
    Depreciation and amortization                                               45.1              7.1             7.0
    Loss on sale of property and equipment                                      (0.6)             -               -
    Amortization of discount on Existing Notes                                  13.7              -               -
    Write-off of deferred financing fees                                         0.4              -               -
    Deferred income taxes                                                        5.5             10.4             9.9
    Extraordinary gain due to repurchase of Existing Notes                      (7.1)             -               -
    Compensation expense paid by principal stockholder                           1.5              0.2             -
    Changes in operating assets and liabilities, net of effects of
    acquisitions:
      Decrease (increase) in accounts receivable                                 7.1              0.6            (1.2)
      (Increase) decrease in inventories                                        (4.2)             1.4            (1.1)
      (Increase) decrease in prepaid expenses and other                         (6.6)             0.1            (0.3)
      Increase (decrease) in accounts payable and accrued expenses               0.2             (0.9)            0.7
      Decrease (increase) in pension asset                                      20.7             (6.6)           (5.4)
    Other, net                                                                  (0.1)            (0.8)           (0.7)
                                                                           ------------     -------------    ------------
      Net cash provided by operating activities                                 81.7             30.6            28.0

Investing activities
Purchase of Panavision stock, net of cash acquired of $5.6                     (76.0)             -               -
Purchase of Existing Notes                                                     (13.4)             -               -
EFILM acquisition, net of cash acquired of $0.3                                 (5.7)             -               -
Capital expenditures                                                           (16.4)            (1.1)           (1.1)
                                                                           ------------     -------------    ------------
      Net cash used in investing activities                                   (111.5)            (1.1)           (1.1)

Financing activities
Proceeds from notes payable and credit agreements                              103.2             10.3            23.0
Repayments of notes payable and credit agreements                              (69.0)           (29.9)          (27.2)
Repurchase of common stock                                                      (6.5)            (8.7)            -
Proceeds from preferred stock issued                                            10.0              -               -
Debt issuance costs                                                             (4.3)            (0.3)            -
Redemption of redeemable preferred stock                                         -                -             (20.0)
Preferred stock dividends                                                       (0.1)             -              (1.5)
                                                                           ------------     -------------    ------------
         Net cash provided by (used in) financing activities                    33.3            (28.6)          (25.7)

Effect of exchange rate changes on cash                                          0.1             (0.1)           (0.1)

Net increase in cash and cash equivalents                                        3.6              0.8             1.1
Cash and cash equivalents at beginning of period                                 2.6              1.8             0.7
                                                                           ------------     -------------    ------------
Cash and cash equivalents at end of period                                      $6.2             $2.6            $1.8
                                                                           ============     =============    ============

Supplemental disclosure of cash paid for:
    Interest                                                                   $20.1             $3.4            $2.3
    Taxes paid, net of refunds                                                   5.1              1.4             1.2

               See Notes to Consolidated Financial Statements
</TABLE>


                   M & F Worldwide Corp. and Subsidiaries
                 Notes to Consolidated Financial Statements
                (dollars in millions, except per share data)


1.       Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

         M & F Worldwide Corp. ("M & F Worldwide" or the "Company"), an
indirect majority-owned subsidiary of Mafco Holdings, Inc. ("Holdings"),
was incorporated in Delaware on June 1, 1988 and is a holding company which
conducts its operations through its indirect wholly owned subsidiary Pneumo
Abex Corporation ("Pneumo Abex" or "Mafco Worldwide") and, after April 19,
2001, its indirect 85.7% owned subsidiary Panavision Inc. ("Panavision")
(see Note 2).

         The consolidated financial statements include the accounts of the
Company and its subsidiaries after elimination of all material intercompany
accounts and transactions. The Company accounts for its investments in 50%
or less owned affiliates on the equity method.

         Certain amounts in previously issued financial statements may have
been reclassified to conform to the 2001 presentation.

         Mafco Worldwide produces a variety of licorice flavors from
intermediary licorice root, licorice flavors produced by others and certain
other ingredients at its facilities in Camden, New Jersey, Richmond,
Virginia and Gardanne, France. Approximately 70% of Mafco Worldwide's
licorice sales are to the worldwide tobacco industry for use as flavoring
and moistening agents in the manufacture of American blend cigarettes,
moist snuff, chewing tobacco and pipe tobacco. While licorice represents a
small percentage of the total cost of manufacturing American blend
cigarettes and the other tobacco products, the particular formulation and
quantity used by each brand is an important element in the brand's flavor.
Mafco Worldwide also sells licorice to worldwide confectioners, food
processors and pharmaceutical manufacturers for use as flavoring or masking
agents. In addition, Mafco Worldwide sells licorice root residue as garden
mulch under the name Right Dress. Mafco Worldwide manufactures and sells
other flavor products and plant products which include natural roots,
spices and botanicals that are used in food, tobacco, pharmaceutical and
health food products.

         Panavision is a leading designer, manufacturer and supplier of
high-precision camera systems, comprising cameras, lenses and accessories,
for the motion picture and television industries. Panavision rents its
products through its owned-and-operated facilities in North America,
Europe, and the Asia Pacific region, as well as through a worldwide agent
network. In addition to manufacturing and renting camera systems,
Panavision also rents lighting, lighting grip, power distribution,
generation and related transportation equipment and sells lighting filters
and other color correction and diffusion filters. Panavision also operates
Las Palmas Productions, Inc. ("EFILM"), a digital laboratory (see Note 2).

Use of Estimates

         The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.

Revenue Recognition

         Mafco Worldwide records revenues when title passes to customers.
Panavision recognizes rental revenue over the related equipment rental
period and sales revenue upon shipment to customers. Returns and
allowances, which have not been significant, are provided for in the period
of sale.

Freight Costs

         For the years ended December 31, 2001, 2000, and 1999, freight
costs of Mafco Worldwide amounted to $1.4, $1.3, and $1.4, respectively,
and are included in cost of revenues in the accompanying consolidated
statements of operations. Panavision's freight costs of $1.2 in 2001 are
included in selling, general and administrative expenses in the
accompanying consolidated statements of operations.

Cash Equivalents

         Cash equivalents with maturities of 90 days or less when purchased
(primarily short term money market funds) are carried at cost which
approximates market value.

Inventories

         Inventories are stated at the lower of cost or market value. Cost
is determined principally by the first-in, first-out method.

Property, Plant and Equipment

         Property, plant and equipment, including rental equipment, are
stated at cost. Maintenance and repairs are charged to expense as incurred.
Additions, improvements and replacements that extend asset life are
capitalized.

         Depreciation is provided on a straight-line basis over the
estimated useful lives of the assets. Leasehold improvements are amortized
over the shorter of the useful life of the related asset or the remaining
lease term. Cost and accumulated depreciation applicable to assets retired
or otherwise disposed of are eliminated from the accounts, and any gain or
loss on such disposition is reflected in operating results.

         Depreciation is provided principally over the following useful
lives:

Buildings and improvements                              10-30 years
Rental assets                                            3-20 years
Machinery and equipment                                  3-10 years
Furniture and fixtures                                   5-10 years


Intangible Assets Related to Businesses Acquired and Other Intangibles

         In June 2001, the Financial Accounting Standards Board ("FASB")
issued Statements of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations" and No. 142, "Goodwill and Other Intangible
Assets." The Company adopted SFAS No. 141 as of July 1, 2001. SFAS No. 142
is effective for fiscal years beginning after December 15, 2001, with the
exception of goodwill and intangible assets acquired after June 30, 2001,
which are subject immediately to the nonamortization provisions of SFAS No.
142. Under the new rules, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized, but will be subject to annual
impairment tests. Other intangible assets will continue to be amortized
over their useful lives.

         The Company will apply the new rules on accounting for goodwill
and other intangible assets beginning in the first quarter of 2002, with
the exception of nonamortization of goodwill relating to the EFILM
acquisition on July 2, 2001 (see Note 2) which was effective as of the date
of the acquisition. Application of the nonamortization provisions of SFAS
No. 142 is expected to result in a decrease in amortization expense of
approximately $11.9 per year, which reflects estimated amortization for the
year ended December 31, 2001 on goodwill and intangible balances that are
expected to be affected by the new rules. During 2002, the Company will
perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and
financial position of the Company.

         Intangible assets, including goodwill, patents and trademarks and
product formulations, are being amortized over periods ranging from 4 to 40
years. Accumulated amortization aggregated $32.1 and $17.2 at December 31,
2001 and 2000, respectively. Amortization expense amounted to $14.9, $4.2,
and $4.2 for 2001, 2000 and 1999, respectively.

Accounting for Long-Lived Assets

         The Company assesses on an ongoing basis the recoverability of
long-lived tangible and intangible assets based on estimates of future
undiscounted cash flows compared to net book value. If the future
undiscounted cash flow estimates were less than net book value, net book
value would then be reduced to estimated fair value, which generally
approximates discounted cash flows. The Company also evaluates the
amortization periods of assets to determine whether events or circumstances
warrant revised estimates of useful lives. The Company's accounting policy
regarding the assessment of the recoverability of the carrying value of
intangible assets is to review the carrying value of intangible assets if
the facts and circumstances suggest that they may be impaired. If this
review indicates that intangible assets will not be recoverable, as
determined based on the undiscounted future cash flows of the Company, the
carrying value of intangible assets will be reduced to their estimated fair
value.

Income Taxes

         The Company computes income taxes under the liability method.
Under the liability method, deferred income taxes are generally determined
based on the difference between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect in the years in
which the differences are expected to reverse. Net deferred tax assets are
recorded when it is more likely than not that such tax benefits will be
realized.

Pension Plans

         The Company has defined benefit and defined contribution pension
plans which cover certain current and former employees of the Company who
meet eligibility requirements. Benefits are based on years of service and,
in some cases, the employee's compensation. The Company's policy is to
contribute annually the minimum amount required pursuant to the Employee
Retirement Income Security Act. Plan assets are principally invested in
common stocks, mutual funds, fixed income securities and cash equivalents.
Subsidiaries of the Company outside the United States have retirement plans
that provide certain payments upon retirement.

Research and Development

         Research and development expenditures are expensed as incurred.
The amounts charged against income were $3.4 in 2001, primarily incurred by
Panavision, and were not significant in 2000 and 1999.

Translation of Foreign Currencies

         The functional currency for the Company's foreign subsidiaries is
the local currency. All assets and liabilities denominated in foreign
functional currencies are translated into U.S. dollars at rates of exchange
in effect at the balance sheet date. Statement of operations items are
translated at the average rates of exchange prevailing during the period.
Translation gains and losses are recorded as a component of accumulated
other comprehensive loss in the Company's statements of stockholders'
equity. Gains and losses resulting from transactions in other than
functional currencies are reflected in operating results.

Stock-Based Compensation

         The Company accounts for stock-based compensation plans using the
intrinsic value method prescribed in Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees" and related
Interpretations. Accordingly, compensation cost for stock options is
measured as the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee must pay to
acquire the stock (see Note 8).

Investments

         Investments of approximately $5.0 and $1.2 at December 31, 2001
and 2000, respectively, accounted for under the equity method are included
in other assets in the accompanying consolidated balance sheet. The
Company's share of earnings or losses in its equity investees is included
in other, net in the accompanying consolidated statements of operations.

Derivatives and Hedging Activities

         In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133, as amended,
is effective for fiscal years beginning after June 15, 2000. SFAS No. 133
requires the Company to recognize all derivatives as either assets or
liabilities and measure those instruments at fair value. It further
provides criteria for derivative instruments to be designated as fair
value, cash flow and foreign currency hedges and establishes respective
accounting standards for reporting changes in the fair value of the
derivative instruments.

         The Company adopted SFAS No. 133 on January 1, 2001, and is
required to adjust hedging instruments to fair value in the balance sheet
and recognize the offsetting gains or losses as adjustments to net income
(loss) or other comprehensive income (loss), as appropriate. The adoption
of SFAS No. 133 did not have a material impact on the Company's financial
position or results of operations.

2.       Acquisitions

Flavors Acquisition

         On November 25, 1996, Mafco Consolidated Group Inc. ("MCG") and M
& F Worldwide consummated the transactions contemplated by a Stock and VSR
Purchase Agreement (the "Purchase Agreement"), dated as of October 23,
1996, by and among MCG, M & F Worldwide and PCT International Holdings Inc.
("Purchaser"), a Delaware corporation and wholly owned subsidiary of M & F
Worldwide. Pursuant to the Purchase Agreement, Purchaser acquired from MCG
(the "Flavors Acquisition"), all the issued and outstanding shares (the
"Shares") of capital stock of Flavors Holdings Inc. ("Flavors"), a Delaware
corporation and wholly owned subsidiary of MCG, and 23,156,502 Value
Support Rights (each a "VSR" and, collectively, the "VSRs") issued pursuant
to a Value Support Rights Agreement (the "VSR Agreement"), dated November
25, 1996 between MCG and American Stock Transfer & Trust Company, as
trustee. On December 31, 1996, the Company distributed to its stockholders
the VSRs received as part of the Flavors Acquisition.

         In consideration for the Shares and VSRs, Purchaser paid MCG cash
in the amount of $180.0. In addition, Purchaser paid MCG deferred cash
payments of $3.7 on June 30, 1997 and $3.5 on January 2, 1998.

         Immediately following the Flavors Acquisition, Mafco Worldwide
Corporation, a wholly-owned subsidiary of Flavors, through a series of
transactions merged with and into Pneumo Abex, with Pneumo Abex being the
surviving corporation and Pneumo Abex becoming a wholly owned subsidiary of
Flavors.

         The Flavors Acquisition was accounted for using the purchase
method of accounting. The allocation of the purchase price to assets and
liabilities was based on their respective fair values at November 25, 1996.
The purchase price and expenses associated with the acquisition exceeded
the fair value of Flavors' net assets by $95.1 and has been assigned to
goodwill, which is being amortized over 40 years on the straight-line
basis.

Panavision Acquisition

         Pursuant to a Stock Purchase Agreement dated as of April 19, 2001
(the "Stock Purchase Agreement") between PX Holding Corporation ("PX
Holding"), a subsidiary of Holdings, and the Company, the Company acquired
from PX Holding 7,320,225 shares of common stock (the "Acquired Shares") of
Panavision. The aggregate consideration for the Acquired Shares, including
fees, was $121.0 and consisted of (i) $80.0 in cash, (ii) 1,500,000 shares
of M & F Worldwide common stock held in treasury and (iii) 6,182,153 shares
of Series B Non-Cumulative Perpetual Participating Preferred Stock (the
"Series B Preferred Stock") of M & F Worldwide having a liquidation
preference of $6.50 per share and one vote per share. The $80.0 in cash was
funded in part pursuant to an Amended and Restated Credit Agreement
totaling $105.0 (the "Amended Credit Agreement") entered into on April 19,
2001 among Pneumo Abex, Flavors, BNP Paribas, JP Morgan Chase, and the
lenders group thereto pursuant to which Pneumo Abex drew $95 at closing.
Immediately following the acquisition of the Acquired Shares (the
"Panavision Acquisition"), the Company contributed the Acquired Shares to
the capital of a wholly owned subsidiary, PVI Acquisition Corp.

         Immediately after the transaction, MCG, an indirect subsidiary of
Holdings, owned 6,648,800 shares of common stock of M & F Worldwide
(representing 32.24% of the outstanding common stock and 24.81% of the
outstanding voting stock); PX Holding owned 1,500,000 shares of common
stock of M & F Worldwide (representing 7.27% of the outstanding common
stock and 5.60% of the outstanding voting stock); and PX Holding owned
6,182,153 shares of the Series B Preferred Stock (representing 100% of the
class and 23.06% of the outstanding voting stock). Accordingly, Holdings'
indirect beneficial ownership of M & F Worldwide represented 39.51% of the
outstanding M & F Worldwide common stock and 53.47% of the outstanding M &
F Worldwide voting stock immediately after the transaction.

         In connection with the closing of the Panavision Acquisition,
Panavision, for federal income and certain state and local tax purposes,
became a member of the affiliated group of which the Company is the common
parent and left the affiliated group of which Holdings is the common
parent. In connection with such event, Panavision, certain of its
subsidiaries and the Company entered into a tax sharing agreement dated as
of April 19, 2001, pursuant to which Panavision, certain of its
subsidiaries and the Company agreed to allocate and share any liabilities
which arise by virtue of the parties being consolidated for federal, and
certain state and local income tax purposes.

         Panavision, PX Holding and M & F Worldwide entered into a letter
agreement (the "Registration Rights Agreement Transfer Letter"), dated as
of April 19, 2001, confirming that upon acquisition of the Acquired Shares,
M & F Worldwide or its designated affiliate, PVI Acquisition Corp., will
become a "Holder" under the Registration Rights Agreement dated as of June
5, 1998, between Panavision and PX Holding (the "Registration Rights
Agreement"), and that all Acquired Shares will become "Registrable
Securities" under such agreement.

         At the closing of the Panavision Acquisition, Ronald O. Perelman,
the sole owner of Holdings, delivered a letter to the Company in which Mr.
Perelman agreed that, if the Company determines in its good faith
reasonable judgment that Panavision is unable to make required payments of
principal or interest under its existing bank credit facilities (the
Panavision credit facility, originally entered into on June 4, 1998, as
subsequently amended on September 30, 1998 and June 30, 1999, the "Existing
Credit Agreement") or 9 5/8% Senior Subordinated Discount Notes due 2006
(the "Notes" or "Existing Notes"), he or corporations under his control
will provide such financial support to the Company as may be required by
Panavision in connection with such payments of principal and interest. The
financial support from Mr. Perelman will be in an amount as M & F Worldwide
determines. However, there can be no assurance that M & F Worldwide will
make such determination or if such determination is made, whether such
determination will be adequate and timely in order to meet Panavision's
needs, if such needs arise. Also at the closing of the Panavision
Acquisition, Holdings delivered a letter to M & F Worldwide pursuant to
which Holdings agreed that it or corporations under its control would
disburse to M & F Worldwide an aggregate amount of $10.0 to be invested by
M & F Worldwide in Panavision (the "M & F Investment") if Panavision was
unable to make required payments of principal or interest under its
Existing Credit Agreement or Existing Notes, but in any event no later than
December 31, 2001. Concurrently, M & F Worldwide delivered to Panavision a
letter pursuant to which M & F Worldwide agreed that it would make
available to Panavision an aggregate amount of $10.0 as required by
Panavision to make payments of principal or interest under its Existing
Credit Agreement or Existing Notes, but in any event no later than December
31, 2001, in exchange for subordinated debt, common stock or voting
preferred stock of Panavision. The M & F Worldwide Investment was
conditioned upon M & F Worldwide having previously received an equivalent
cash amount pursuant to its letter agreement with Holdings. The financial
support to be provided by Mr. Perelman and Holdings to the Company would be
evidenced by either or both of (i) subordinated debt of the Company,
maturing as the Company determines based on its cash flow projections and
bearing on interest rate equal to that of the bank credit facilities
outstanding at Pneumo Abex and (ii) newly issued shares of Series B
Preferred Stock priced at the greater of (a) $15.00 per share and (b) the
then fair market value of the Company's common stock.

         On December 21, 2001, in satisfaction of the obligation set forth
in the letter dated April 19, 2001 from Holdings to the Company, PX Holding
disbursed $10.0 to the Company in exchange for which the Company issued
666,667 shares of Series B Preferred Stock to PX Holding. Also on December
21, 2001, the Company purchased from PX Holding $22.0 principal amount of
Existing Notes from PX Holding for $8.1. Such Existing Notes, together with
$2.5 principal amount of Existing Notes owned by the Company, were
delivered to Panavision in exchange for 1,381,690 newly issued shares (the
"Exchanged Shares") of Panavision's Series A Non-Cumulative Perpetual
Participating Preferred Stock (the "Series A Preferred Stock") in
satisfaction of the Company's obligation to make the M & F Investment. The
Exchanged Shares were issued at a value of approximately $9.3, which
represents the Company's cost to purchase the Existing Notes delivered to
Panavision. Because the Company delivered the Existing Notes to Panavision
in satisfaction of obligations under an agreement entered into at the time
of the Panavision Acquisition, the difference between the Company's cost
and Panavision's book value of the Existing Notes was recorded as an
adjustment to goodwill.

         Panavision and M & F Worldwide entered into a letter agreement,
dated as of December 21, 2001, pursuant to which Panavision and M & F
Worldwide agreed to amend the Registration Rights Agreement to, among other
things, include the Exchanged Shares within the definition of "Registrable
Securities."

         Accordingly, Holdings' indirect beneficial ownership of M & F
Worldwide represents 41.53% of the outstanding M & F Worldwide common stock
and 56.66% of the outstanding M & F Worldwide voting stock at December 31,
2001.

         M & F Worldwide's indirect beneficial ownership of Panavision
represents 83.5% of the Panavision common stock and 85.7% of the
outstanding Panavision voting stock at December 31, 2001.

         In accordance with APB Opinion No. 16, the Panavision Acquisition
has been accounted for by the purchase method. The allocation of the
purchase price to assets and liabilities was based on their respective
estimated fair values at April 19, 2001 to the extent of the Company's
83.5% controlling interest. The remaining 16.5% is accounted for at
Panavision's carryover basis. The purchase price and expenses associated
with the Panavision Acquisition exceeded the estimated fair value of
Panavision's net liabilities by $302.7 and has been assigned to goodwill,
which is being amortized over thirty years on a straight-line basis.

         As a result of the Panavision Acquisition, the following
adjustments to Panavision's assets and liabilities representing 83.5% of
the totals were recorded as of the acquisition date to adjust the
historical carrying values:

                                                              Increase
                                                             (Decrease)
Property, plant and equipment                                $  40.8
Patents and trademarks                                          68.6
Other                                                           (2.8)
Long-term debt                                                   3.8
Deferred tax assets                                             15.6
Deferred tax liabilities                                        45.1

         The purchase price allocation for Panavision is preliminary and is
subject to adjustment with respect to the fair value of $37.7 principal
amount of Existing Notes, due to uncertainty of the outcome of a pending
settlement relating to the Panavision Acquisition (see discussion of the
Consolidated Action in Note 12).

         The following unaudited pro forma financial information gives
effect to the Panavision Acquisition as if it had occurred on January 1,
2000. The pro forma information for the twelve-month periods ended December
31, 2001 and December 31, 2000 include certain adjustments, primarily
increased depreciation and amortization, increased interest expense and
decreased income tax expense, and are not necessarily indicative of what
the results would have been had the acquisition occurred on January 1, 2000
and do not purport to project results of operations of the Company in any
future period (in millions, except per share amounts).

                                                           December 31,
                                                      2001            2000
                                                    --------         ------
           Revenue                                  $ 289.2        $ 297.7
           Gross margin                               132.9          137.2
           Operating income                            55.2           50.6
           Net income (loss)                            0.6          (13.5)
           Basic and diluted undistributed
              income (loss) per share               $   0.01       $  (0.50)

Las Palmas Productions, Inc. Acquisition

         Pursuant to the Stock Purchase Agreement dated as of July 2, 2001
(the "EFILM Purchase Agreement"), M & F Worldwide acquired all of the
shares of Las Palmas Productions, Inc. ("EFILM"). EFILM is an operator of
digital laboratories, serving the major studios, independent filmmakers,
advertisers, animators, large format filmmakers and restoration clients.
EFILM services include high resolution scanning, laser film recording of
digital video and high definition images to film, and digital color timing.
The consideration for the acquisition consisted of (i) $6.0 in cash at
closing and (ii) an additional cash payment equal to the greater of (a) 90%
of the average annual EBITDA (as defined in the EFILM Purchase Agreement)
of the EFILM business over a two-year Earnout Period (as defined in the
EFILM Purchase Agreement) or (b) $1.5. The additional cash payment is
payable at the shareholders' election beginning approximately four months
after the end of fiscal 2003 and ending approximately four months after the
end of fiscal 2006. The present value of the minimum additional cash
payment of $1.5 as of December 31, 2001 is included in other liabilities.
Panavision operates the EFILM business pursuant to employment, license and
lease agreements entered into between M & F Worldwide and Panavision,
whereby the assets and employees of EFILM were leased to Panavision. In
accordance with SFAS No. 141, the EFILM acquisition has been accounted for
by the purchase method. The allocation of the purchase price to assets and
liabilities was based on their estimated fair values at July 2, 2001. The
purchase price exceeded the estimated fair value of EFILM's net assets by
$5.3 and has been assigned to goodwill, which, in accordance with SFAS No.
142, is not being amortized.

3.       Inventories

         Inventories consisted of the following:

                                                 December 31,
                                            2001               2000
                                          ------             ----------
           Raw materials                   $ 42.3             $ 34.2
           Work-in-progress                   0.6                0.1
           Finished goods                    19.4               14.2
                                          -------            --------
                                           $ 62.3             $ 48.5
                                          =======            ========

4.       Property, Plant and Equipment

         Property, plant and equipment consisted of the following:

                                                          December 31,
                                                     2001            2000
                                                     ----            ----
                 Land                               $   1.6        $   1.6
                 Buildings                             23.7            9.7
                 Rental assets                        229.3             -
                 Machinery and equipment               32.5           20.8
                 Furniture and fixtures                 2.6             -
                 Other                                  2.3            0.1
                                                    --------       --------
                                                      292.0           32.2
                 Accumulated depreciation             (36.7)          (9.7)
                                                    --------       --------
                                                    $ 255.3        $  22.5
                                                    ========       =========

         Depreciation expense was $27.8, $2.7 and $2.7 in 2001, 2000 and
1999, respectively.

5.       Accrued Liabilities

         Accrued liabilities consist of the following:

                                                        December 31,
                                                    2001            2000
                                                    ----            ----
                 Interest payable                  $   2.2        $   0.3
                 Professional fees                     1.2            0.2
                 Taxes other than income taxes         2.3            0.5
                 Payroll and related costs             8.7            3.7
                 Rent                                  2.9             -
                 Income taxes payable                 10.2            6.5
                 Accrued other                         6.4            3.4
                                                   --------        --------
                                                   $  33.9        $  14.6
                                                   ========       =========

6.       Income Taxes

         Since the closing of the Panavision Acquisition on April 19, 2001,
Panavision, for federal income tax purposes, has been included in the
affiliated group of which M & F Worldwide is the common parent, and
Panavision's federal taxable income and loss will be included in such
group's consolidated tax return filed by M & F Worldwide. Panavision also
may be included in certain state and local tax returns of M & F Worldwide
or its subsidiaries. As of April 19, 2001, Panavision and M & F Worldwide
entered into a tax sharing agreement (the "Panavision Tax Sharing
Agreement"), pursuant to which the M & F Worldwide has agreed to indemnify
Panavision against federal, state or local income tax liabilities of the
consolidated or combined group of which M & F Worldwide (or a subsidiary of
M & F Worldwide other than Panavision or its subsidiaries) is the common
parent for taxable periods beginning on or after April 19, 2001 during
which Panavision or a subsidiary of Panavision is a member of such group.
Pursuant to the Panavision Tax Sharing Agreement, for all taxable periods
beginning on or after April 19, 2001, Panavision will pay to M & F
Worldwide amounts equal to the taxes that Panavision would otherwise have
to pay if it were to file separate federal, state or local income tax
returns (including any amounts determined to be due as a result of a
redetermination arising from an audit or otherwise of the consolidated or
combined tax liability relating to any such period which is attributable to
Panavision), except that Panavision will not be entitled to carry back any
losses to taxable periods ending prior to April 19, 2001. Since the
payments to be made under the Panavision Tax Sharing Agreement will be
determined by the amount of taxes that Panavision would otherwise have to
pay if it were to file separate federal, state and local income tax
returns, the Panavision Tax Sharing Agreement will benefit M & F Worldwide
to the extent M & F Worldwide can offset the taxable income generated by
Panavision against losses and tax credits generated by M & F Worldwide and
its other subsidiaries. To the extent that Panavision has losses for tax
purposes, the Panavision Tax Sharing Agreement permits Panavision to carry
those losses back to April 19, 2001 and forward for so long as Panavision
is included in the affiliated group of which M & F Worldwide is the common
parent (in both cases, subject to federal, state and local rules on
limitation and expiration of net operating losses) to reduce the amount of
the payments Panavision otherwise would be required to make to M & F
Worldwide in years in which it has current income for tax purposes.

         For the period from February 1, 1999 through April 18, 2001,
Panavision, for federal income tax purposes, had been included in the
affiliated group of which Holdings was the common parent, and for such
period Panavision's federal taxable income and loss had been included in
such group's consolidated tax return filed by Holdings. As of February 1,
1999, Panavision and certain of its subsidiaries and Holdings entered into
a tax sharing agreement (the "Mafco Tax Sharing Agreement") containing
terms and conditions substantially the same as those in the Panavision Tax
Sharing Agreement. The Mafco Tax Sharing Agreement governed tax matters
between Panavision and Holdings for the period from February 1, 1999
through April 18, 2001 and continues in effect as to post Holdings
consolidation matters such as audit adjustments and indemnities.

         Information pertaining to the Company's income before income taxes
and the applicable provision (benefit) for income taxes is as follows:

<TABLE>
<CAPTION>

                                                                             Year ended December 31,
                                                                  -----------------------------------------------
                                                                      2001              2000               1999
                                                                  ----------         ---------         ---------
         Income before income taxes:
<S>                                                               <C>                <C>               <C>
           Domestic                                               $    8.2           $  29.8           $  29.7
           Foreign                                                     4.1               2.4               2.2
                                                                  ---------          -------           --------
          Total income before taxes                               $   12.3           $  32.2           $  31.9
                                                                  =========          =======           ========

                                                                             Year ended December 31,
                                                                  -----------------------------------------------
                                                                      2001              2000               1999
                                                                  ----------         ---------         ---------

         Provision (benefit) for income taxes:
           Current:
              Federal                                             $    1.5           $   0.6           $   0.6
              State and local                                          2.1               1.3               1.3
              Foreign                                                  3.7               0.8               1.0
                                                                  --------           -------           -------
                                                                       7.3               2.7               2.9
              Deferred:
              Federal                                                  4.0              10.7               9.9
              State and local                                         (0.8)               -                 -
              Foreign                                                   -               (0.3)               -
                                                                  ----------         ---------         --------
Total provision for income taxes                                  $   10.5           $  13.1           $  12.8
                                                                  ==========         =========         ========

</TABLE>


         The Company recorded a tax provision of $10.5 (an effective tax
rate of 85.4%) and $13.1 (an effective tax rate of 40.7%) for the years
ended December 31, 2001 and 2000, respectively. In 2001 the Company also
recorded a tax provision of $2.3 relating to the net extraordinary gain. The
effective rate in 2001 reflects non-deductible items, such as
non-deductible excise tax on the pension reversion, a reduction in the
valuation allowance, and foreign taxes in excess of the domestic rate. The
2000 provision reflects a foreign benefit relating to a decrease in the tax
rate. The 1999 provision reflects a reduction of the valuation allowance
for prior year minimum tax credits.

         Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and income tax purposes. Significant
components of the Company's deferred tax liabilities and assets are as
follows:

<TABLE>
<CAPTION>

                                                                                     December 31,
                                                                              2001                 2000
                                                                            ---------            --------
         Deferred tax assets:
           Current
<S>                                                                          <C>               <C>
              Inventory                                                      $  0.8            $    0.8
              Accrued expenses and other liabilities                            4.5                 0.3
           Long-term
              Other liabilities                                                 4.8                 1.5
              Property, plant and equipment                                     1.3                 1.1
              Debt original issue discount                                     11.2                  -
              Net operating loss carryforwards                                 33.9                39.1
              Capital loss carryforwards                                         -                  7.0
              Tax credit carryforwards (primarily alternative
                  minimum tax)                                                 17.6                 2.0
                                                                            ---------            ---------
                Total deferred tax asset                                       74.1                51.8
              Valuation allowance                                              (7.3)               (7.0)
                                                                            ---------            ---------
                   Total deferred tax asset net of valuation allowance         66.8                44.8

         Deferred tax liabilities:
           Long-term
              Property, plant and equipment                                    35.1                 0.6
              Pension asset                                                     4.6                11.9
              Intangibles                                                      36.3                 6.0
              Unremitted foreign earnings                                       4.2                  -
              Other                                                             0.2                  -
                                                                            ---------            ---------
                  Total deferred tax liability                                 80.4                18.5
                                                                            ---------            ---------
         Net deferred tax (liabilities) assets                              $ (13.6)             $ 26.3
                                                                            =========            =========

</TABLE>

         The effective tax rate before income taxes varies from the current
statutory federal income tax rate as follows:

<TABLE>
<CAPTION>

                                                                     2001              2000                1999
                                                                  ---------          ---------          -------
<S>                                                                  <C>               <C>                <C>
         Statutory rate                                              35.0%             35.0%              35.0%
         State and local taxes                                       15.4               4.0                4.0
         Non-deductible excise tax                                   23.9                -                  -
         Non-deductible goodwill                                     22.4                -                  -
         Foreign tax in excess of U.S. including foreign
             losses for which no benefit was provided                17.3              (0.9)               0.7
         Decrease in valuation allowance                            (30.4)               -                (2.2)
         Other                                                        1.8               2.6                2.6
                                                                  ---------          ---------          --------
                                                                     85.4%             40.7%              40.1%
                                                                  =========          =========          ========
</TABLE>


         As of December 31, 2001, the Company's accumulated foreign
earnings were approximately $23.9. The Company has provided deferred income
taxes, including withholding taxes, on undistributed Canadian earnings
totaling approximately $5.6. All other foreign earnings are permanently
reinvested.

         The Company at December 31, 2001, had federal net operating loss
carryforwards of approximately $94.8, of which $50.0 relate to M & F
Worldwide and expire in the years 2004 to 2010, and $44.8 relate to
Panavision and expire in the years 2008 to 2019. Utilization of the
Panavision net operating loss carryforwards may be subject to an annual
limitation pursuant to the ownership change limitations provided by the
Internal Revenue Code and similar state provisions. The annual limitation
may result in the expiration of a portion of the net operating loss before
utilization.

         In March 2002 new tax legislation was enacted that will allow for
utilization of alternative minimum tax net operating losses to fully offset
alternative minimum taxable income for 2001 and 2002. The impact relating
to this new legislation will be recorded in the first quarter of 2002,
which primarily results in accelerating utilization of alternative minimum
tax net operating losses.

         In order to protect the availability of the Company's net
operating loss carryforwards, the M & F Worldwide charter prohibits,
subject to certain exceptions, transfers of M & F Worldwide common stock
until such date as fixed by the Board of Directors of M & F Worldwide to
any person who owns, or after giving effect to such transfer would own, at
least 5% of the outstanding M & F Worldwide common stock. The Company has
been advised by counsel that the transfer restriction in the M & F
Worldwide charter is enforceable. The Company intends to take all
appropriate action to preserve the benefit of the restriction including, if
necessary, the institution of legal proceedings seeking enforcement.

         In connection with the merger (the "Abex Merger") of Abex Inc.
("Abex") and a wholly owned subsidiary of Holdings and the related transfer
(the "Transfer") to a subsidiary of MCG of substantially all of Abex's
consolidated assets and liabilities, other than those relating to its Abex
NWL Aerospace Division ("Aerospace"), MCG and the Company entered into a
tax sharing agreement. Under the indemnification provisions of the tax
sharing agreement and with respect to periods ending on or prior to June
15, 1995, MCG will generally be required to pay any tax liabilities of the
Company, except for foreign income taxes related to the Aerospace division.

7.       Authorized Capital Stock

         M & F Worldwide's authorized capital stock consists of 250,000,000
shares of common stock, par value $0.01 per share and 250,020,000 shares of
preferred stock, par value $0.01 per share. The preferred stock is issuable
in one or more series or classes, any or all of which may have such voting
powers, full or limited, or no voting powers, and such designations,
preferences and related participating, optional or other special rights and
qualifications, limitations or restrictions thereof, are set forth in the
Company's Certificate of Incorporation or any amendment thereto, or in the
resolution providing for the issuance of such stock adopted by the
Company's Board of Directors, which is expressly authorized to set such
terms for any such issue.

         There were 20,663,171 shares of common stock outstanding at
December 31, 2001 of which 1,041,900 shares were held in treasury and there
were 20,663,171 shares of common stock outstanding at December 31, 2000 of
which 1,541,900 shares were in treasury. There were 20,000 shares of Series
A Preferred Stock outstanding at December 31, 2001 and December 31, 2000,
all of which were held in treasury as a result of a redemption in December
1999. At December 31, 2001, 6,848,820 shares of Series B Preferred Stock
were issued and outstanding. The Company issued 6,182,153 shares of Series
B Preferred Stock in connection with the Panavision Acquisition and issued
666,667 shares of Series B Preferred Stock for $10.0 in December 2001. The
Series B Preferred Stock has one vote per share and a liquidation value of
$6.50 per share, plus declared and unpaid dividends. Dividends on the
Series B Preferred Stock are non-cumulative at a rate of $.05 per share per
annum payable, if declared, quarterly in arrears. In addition to the stated
dividend, the Series B Preferred Stock will also participate pro rata on a
share-for-share basis with the common stock with respect to any dividends
declared or paid on the common stock.

8.       Stock Option Plans

         The Company has elected to follow APB Opinion No. 25 and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under
SFAS No. 123, "Accounting for Stock-Based Compensation," requires use of
option valuation models that were not developed for use in valuing employee
stock options.

         The Company established three stock plans, one in 1995, one in
1997, and one in 2000 (the "Stock Plans") which provide for the grant of
awards covering up to 3.5 million shares of M & F Worldwide common stock.

         A summary of the Company's stock option activity for the Stock
Plans and related information for the years ended December 31 follows:

<TABLE>
<CAPTION>

                                                                                         Exercise Price
                                                               Shares                                   Weighted
                                                               (000)               Range               Avg. Price

<S>                                                               <C>          <C>     <C>                  <C>
    Options Outstanding at December 31, 1999                      1,993        $5.50 - $7.625               $7.07
         Grants                                                     815             5.50                     5.50
                                                            -------------
    Options Outstanding at December 31, 2000                      2,808         5.50 - 7.625                 6.62
         Options expired                                           (260)        5.50 - 7.375                 5.57
                                                            -------------
    Options Outstanding at December 31, 2001                      2,548         5.50 - 7.625                 6.72
                                                            =============
</TABLE>

         The weighted-average remaining contractual life of options
outstanding under the Stock Plans at December 31, 2001 is 6.3 years.

         Information regarding stock options exercisable under the Stock
Plans is as follows:

<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                                  ---------------------------------------------
                                                                     2001              2000               1999
                                                                  ---------          --------           -------
         Options Exercisable:
<S>                                                                 <C>                <C>                <C>
             Number  of shares (000)                                2,048              2,170              860
             Weighted average exercise price                        $6.54              $6.49             $7.17
</TABLE>

         The weighted average fair value of options granted in 1999 and
2000 was $3.16 and $3.04, respectively. In 1997, 1.6 million non-qualified
options were granted which included 0.5 million options to the Chairman of
the Executive Committee of the Board of Directors and 1.1 million options
to employees. These options have a 10 year term and are fully vested at
December 31, 2001 except for the 0.5 million granted to the Chairman of the
Executive Committee which vest on the fifth anniversary of the grant date.
The options granted in 1999 have a 10 year term and are fully vested at
December 31, 2001. The options granted in 2000 have a 10 year term and were
generally fully vested at December 31, 2001.

         The exercise price of the stock options granted in 1999 were equal
to the market value of the Company's stock on the dates of grant and
accordingly, no compensation cost has been recognized for stock options
issued in 1999. Compensation expense of $0.1 has been recognized for the
options granted under the 2000 Plan as the market price exceeded the
exercise price of the underlying stock on May 18, 2000, which was the date
of the approval of the 2000 Plan by the stockholders. Additional
compensation expense of $0.1 was recognized in 2000 as a consequence of a
modification to the terms of the Chief Executive's stock option agreement.

         The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model. The following
weighted-average assumptions were used for grants under the Stock Plans in
1999 and 2000, respectively: dividend yield of 0.0% and 0.0%; expected
stock price volatility of 32.3% and 29.2%; risk-free interest rate of 6.24%
and 6.20%; and expected life of 10 and 10 years.

         In addition to the Company's Stock Plans, Panavision has its own
stock option plan (the "Panavision Stock Plan"). During 1999, the Board of
Directors of Panavision adopted the Panavision Stock Plan, which is open to
participation by directors, officers, consultants, and other key employees
of Panavision or of its subsidiaries and certain other key persons. The
Panavision Stock Plan provides for the issuance of incentive and
nonqualified stock options under the Internal Revenue Code. An aggregate of
1,500,000 shares of Panavision Common Stock are reserved for issuance under
the Panavision Stock Plan. The options are granted for a term of ten years.
If an incentive stock option is granted to an individual owning more than
10% of the total combined voting power of all stock, the exercise price of
the option may not be less than 110% of the fair market value of the
underlying shares on the date of grant and the term of the option may not
exceed five years. The Panavision Stock Plan also provides that the
aggregate fair market value (determined as of the time the option is
granted) of Panavision Common Stock with respect to which incentive stock
options are exercisable for the first time by an optionee during any
calendar year shall not exceed $0.1.

         A summary of Panavision's stock option activity and related
information for the years ended December 31 is as follows:

<TABLE>
<CAPTION>

                                                                                       Exercise Price
                                                               Shares        ----------------------------------
                                                            ------------                                Weighted
                                                               (000)               Range               Avg. Price

<S>                                                               <C>              <C>                     <C>
    Options Outstanding at December 31, 1999                      1,162            $10.00                  $10.00
         Options expired                                            (67)            10.00                   10.00
         Grants                                                     130              7.50                    7.50
                                                            -------------
    Options Outstanding at December 31, 2000                      1,225         10.00 - 7.50                 9.73
                                                            -------------
    Options expired                                                (233)           10.00                    10.00
                                                            -------------
    Options Outstanding at December 31, 2000                        992         10.00 - 7.50                 9.67
                                                            =============
</TABLE>

         The weighted-average remaining contractual life of options
outstanding under the Panavision Stock Plan at December 31, 2001 is 7.8
years.

         Information regarding stock options exercisable under the
Panavision Stock Plan is as follows:

<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                                  ---------------------------------------------
                                                                     2001              2000               1999
                                                                  ---------          --------           -------
         Options Exercisable:
<S>                                                                    <C>             <C>                 <C>
              Number of shares (000)                                   949             1,139               155
              Weighted average exercise price                         $9.77             $9.90            $10.00

</TABLE>


         There were no options granted under the Panavision Stock Plan in
2001. For 2000, the weighted average fair value of options whose exercise
price is less than the market price of the stock on the date of the grant
is $4.97. For 2000 and 1999, the weighted average fair value of options
granted whose exercise price is more than the market price of the stock on
the grant date is $3.39 and $1.07, respectively. The fair values are as of
the respective grant dates and were estimated using the following
assumptions and the Black-Scholes option valuation model:

<TABLE>
<CAPTION>

                                                                     2001              2000               1999
                                                                  ---------          --------           -------
<S>                                                                <C>                <C>                <C>
         Risk-free interest rate                                     N/A                6.53%              6.05%
         Expected life                                               N/A              5 years            5 years
         Expected volatility                                         N/A                 0.44               0.38
         Expected dividend yields                                    N/A                0.00%              0.00%
</TABLE>

         Had compensation cost for the stock options issued by the Company
been determined based on the fair value at grant date for awards under the
Stock Plans, and after April 19, 2001, the Panavision Stock Plan,
consistent with the provisions of SFAS No. 123, the Company's net income
and income per share for the years ended December 31, 2001, 2000, and 1999,
respectively, would have been reduced to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>

                                                                              Year Ended December 31,
                                                                  ---------------------------------------------
                                                                     2001              2000               1999
                                                                  ---------          --------           -------
<S>                                                                 <C>              <C>                 <C>
         Net income - as reported                                   $ 6.1            $19.1               $19.1
         Net income - pro forma                                       5.1             15.5                17.8
         Basic undistributed income per share - as reported           0.24             0.96                0.85
         Diluted undistributed income per share - as reported         0.24             0.96                0.83
         Basic undistributed income per share - pro forma             0.20             0.78                0.79
         Diluted undistributed income per share - pro forma           0.20             0.78                0.77
</TABLE>

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options. M & F Worldwide's and
Panavision's stock options have characteristics significantly different
from those of traded options such as vesting restrictions and
non-transferability of options. In addition, the assumptions used in option
valuation models are subjective, particularly the expected stock price
volatility for the underlying stock. Because changes in these subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing model does not provide a reliable single
measure of the fair value of its employee stock options.

9.       Pension Plans

         Certain current and former employees of Mafco Worldwide are
covered under various defined benefit retirement plans. Plans covering
salaried employees generally provide pension benefits based on years of
service and compensation. Plans covering hourly employees and union members
generally provide stated benefits for each year of credited service. Plan
assets are invested primarily in common stocks, mutual funds, fixed income
securities and cash equivalents. Mafco Worldwide's funding policy is to
contribute annually the statutory required minimum amount as actuarially
determined.

         On February 15, 2001, the Mafco Worldwide Corporation Defined
Benefit Pension Plan was terminated. The amount of cash retained by Mafco
Worldwide in connection with the termination was $33.8 after settlement of
benefit obligations, the payment of a federal excise tax and the transfer
of approximately $14.1 of residual assets to a new pension plan for current
salaried employees similar in terms to the terminated plan. As a result of
the termination, the Company recorded a net gain of $11.1 after federal
excise taxes of $8.5.

         The following table reconciles the funded status of Mafco
Worldwide's pension plans:

<TABLE>
<CAPTION>

                                                                                    December 31,
                                                                              2001               2000
                                                                           ---------           ---------
<S>                                                                        <C>                 <C>
         Accumulated Benefit Obligation                                    $    3.5            $ 128.0
                                                                           =========           =========

         Change in Projected Benefit Obligation
           Projected benefit obligation at beginning of year               $  129.9            $ 127.7
           Service cost                                                         0.3                0.3
           Interest cost                                                        1.5                9.2
           Plan amendments                                                      0.4                 -
           Assumption changes                                                   0.2                 -
           Actuarial loss                                                      20.0                1.9
           Benefits paid                                                       (1.7)              (9.2)
           Settlements                                                       (145.2)                -
                                                                            ---------           ---------
           Projected benefit obligation at end of year                          5.4              129.9
                                                                            ---------           ---------

         Change in Plan Assets
           Fair value of assets at beginning of year                          198.2              188.8
           Actual return on plan assets                                         8.2               18.6
           Benefits paid                                                       (1.7)              (9.2)
           Settlements                                                       (145.2)                -
           Asset reversion                                                    (42.3)                -
                                                                           ----------           ----------
           Fair value of assets at end of year                                 17.2              198.2
                                                                           ----------           ----------

         Plan assets in excess of projected benefit obligations                11.8               68.3
           Unrecognized prior service cost                                      0.5                0.1
           Unrecognized net loss (gain)                                         1.1              (34.5)
                                                                           --------            ----------
         Net pension asset                                                 $   13.4             $ 33.9
                                                                           ========            ==========
</TABLE>

         Mafco Worldwide has an unfunded supplemental benefit plan to
provide salaried employees with additional retirement benefits due to
limitations established by U.S. income tax regulation. In addition, Mafco
Worldwide has an unfunded benefit plan which provides benefits to certain
former employees of Pneumo Abex. The projected benefit obligations, after
adjusting for prior service costs, minimum pension liabilities, and
unrecognized actuarial gains and losses for the plans, were $2.4 and $2.2
at December 31, 2001 and 2000 respectively and are included in other
liabilities.

         The weighted-average discount rate used in determining the
actuarial present value of the projected benefit obligations was 7.25% and
7.5% as of December 31, 2001 and 2000 respectively. The rate of increase in
future compensation levels reflected in the determination of Mafco
Worldwide's salaried plans and the supplemental benefit plan was 5% for
2001 and 2000. Certain employees of Mafco Worldwide are covered under a
union pension plan which provides for a benefit accrual based upon a flat
dollar amount for each year of credited service. The expected long-term
rate of return on assets for both the non-union and union plans was 9.5% in
2001, 2000, and 1999.

         Plan assets and liabilities were primarily measured on December
31, 2001 and October 31 for 2000.

         Net periodic pension income for Mafco Worldwide's funded plans,
which is included in selling, general and administrative expenses, is due
to the overfunded status of the plans and consisted of the following
components:

<TABLE>
<CAPTION>

                                                                              Year Ended December 31,
                                                                      -----------------------------------------
                                                                       2001         2000             1999
                                                                       ----         ----             ----
<S>                                                                  <C>           <C>             <C>
         Service cost - benefits earned during the period            $  0.3        $  0.3          $   0.3
         Interest cost on projected benefit obligations                 1.5           9.2              9.0
         Expected return on plan assets                                (3.9)        (16.1)           (14.7)
                                                                     --------      -------         --------
         Net pension income                                          $ (2.1)        $(6.6)           $(5.4)
                                                                     ========      ========        ========
</TABLE>

         In addition, Mafco Worldwide has a defined contribution 401(k)
plan covering domestic salaried employees. Mafco Worldwide contributes up
to 2% of an employees' salary to this plan.

         Panavision sponsors a defined contribution 401(k) plan covering a
majority of its domestic employees. Eligible employees may contribute from
1% to 16% of their base compensation. Panavision makes matching
contributions equal to 75% of employee before-tax contributions from 1% to
6%. For the period April 20, 2001 to December 31, 2001, the Company
expensed $0.6, related to the 401(k) plan.

         In addition, Panavision sponsors a defined contribution retirement
plan covering certain foreign employees. Participating employees contribute
from 4% to 15% of their base compensation. Panavision contributes 10.5% to
13.0% of base compensation for participating employees depending upon their
level of contribution. For the period April 20, 2001 to December 31, 2001,
the Company expensed $0.6, representing Panavision's contributions.

10.      Short-Term Borrowings and Debt

<TABLE>
<CAPTION>

                                                                                    December 31,
                                                                           -----------------------------
                                                                              2001                 2000
                                                                           ---------            --------
 <S>                                                                         <C>                 <C>
        Mafco Worldwide
           Amended Credit Agreement:
              Term loan                                                     $   82.5            $   -
              Revolving credit facility                                          -                29.0
           Other                                                                 1.5               0.4
                                                                            ---------           ---------
                                                                                84.0              29.4
         Panavision
           Existing Credit Agreement:
              Term loan                                                        198.3                -
              Revolving credit facility                                         79.0                -
           9 5/8% Senior Subordinated Discount Notes Due 2006                  183.5                -
                                                                            ---------           ---------
                                                                               460.8                -

         EFILM                                                                   0.1                -
                                                                            ---------           ---------

         Total short-term borrowings and debt                                  544.9              29.4
                                                                             --------           ---------

         Less short-term borrowings and current maturities                     (43.3)             (0.4)
                                                                             ---------          --------

         Long-term debt                                                     $  501.6            $  29.0
                                                                            =========           ========

</TABLE>

         On April 19, 2001 (the "Closing Date"), Mafco Worldwide entered
into an Amended and Restated Credit Agreement (the "Amended Credit
Agreement") with a group of banks pursuant to which Mafco Worldwide may
borrow up to $105.0. The Amended Credit Agreement includes a $90.0
five-year term loan facility which was fully drawn on the Closing Date and
a $15.0 five-year revolving loan facility, $5.0 of which was drawn on the
Closing Date (the "Loans") and $4.6 was reserved to support lender
guarantees for outstanding letters of credit. The five-year $90.0 term loan
is repayable in quarterly installments which commenced on June 30, 2001;
totalling $7.5 in 2001, $13.8 in 2002, $18.7 in 2003, $20.0 in 2004, $23.7
in 2005 and $6.3 in 2006. A mandatory repayment is required in April of
each year based upon prior year excess cash flow (as the defined in the
Amended Credit Agreement). This amount is $4.3 at December 31, 2001 and,
when paid, will be applied to reduce amounts that otherwise are due in
2006. The $15.0 revolving loan is for five years and may also be used to
support lender guarantees for outstanding letters of credit. The Amended
Credit Agreement permits the Company to choose between various interest
rate options and specify the interest rate period to which the interest
rate options are to apply, subject to certain parameters. Borrowing options
available are (i) the Alternate Base Rate Loans ("ABR Loans") and (ii)
Eurodollar Loans, plus a borrowing margin (2.5% on ABR Loans and 3.5% on
Eurodollar Loans at December 31, 2001). As of December 31, 2001, there was
$82.5 outstanding under the term loan, and $4.6 of the revolving loan
facility was reserved for lender guarantees on outstanding letters of
credit. The average interest rate at December 31, 2001 was 5.89%.
Substantially all the domestic assets of Pneumo Abex are pledged to secure
the Amended Credit Agreement. The Amended Credit Agreement contains various
restrictive covenants which include, among other things, limitations on
indebtedness and liens, minimum interest coverage and maximum leverage
ratios, operating cash flow maintenance and limitations on the sale of
assets.

         As of December 31, 2000, $29.0 was outstanding under the revolving
loan facility and $4.6 was reserved for lender guarantees on outstanding
letters of credit.

         Mafco Worldwide's French subsidiary has credit agreements
renewable annually with two banks whereby it may borrow up to 2,897,000
Euros (approximately $2.6 at December 31, 2001) for working capital
purposes. The amounts borrowed which are included in short-term borrowings
were $1.5 and $0.4 at December 31, 2001 and 2000, respectively.

         Panavision's Existing Credit Agreement is comprised of two
facilities, the Term Facility and the Revolving Facility. The Term Facility
has two tranches: the Tranche A Term Facility is a 6-year facility in an
aggregate principal amount equal to $90.0 and the Tranche B Term Facility
is a 7-year facility in an aggregate principal amount of $150.0. The
Revolving Facility is a 6-year facility in an aggregate principal amount of
$100.0. The Tranche A Term Facility and the Tranche B Term Facility are
repayable in quarterly installments. Borrowings under the Existing Credit
Agreement bear interest at a rate per annum equal to the Alternate Base
Rate ("ABR") (as defined in the Existing Credit Agreement) or the
Eurodollar Rate (as defined in the Existing Credit Agreement) plus, in each
case, a margin that will be based on the performance of Panavision at
agreed upon levels. The applicable margin at December 31, 2001 on loans
under the Revolving Facility and the Tranche A Term Facility was 2.75% for
Eurodollar Loans (as defined in the Existing Credit Agreement) (4.85% to
6.23% at December 31, 2001) and 1.75% for ABR Loans (as defined in the
Existing Credit Agreement). The applicable margin at December 31, 2001 on
loans under the Tranche B Term Facility was 3.00% for Eurodollar Loans
(4.91% to 5.10% at December 31, 2001) and 2.00% for ABR Loans. Panavision
may select interest periods of one, two, three or six months for Eurodollar
Loans. If at any time Panavision is in default in the payment of any amount
of principal due under the Existing Credit Agreement, such amount will bear
interest at 2.00% above the rate otherwise applicable. Overdue interest,
fees and other amounts will bear interest at 2.00% above the rate
applicable to ABR Loans.

         Panavision's obligations under the Existing Credit Agreement are
secured by substantially all of Panavision's assets. The Existing Credit
Agreement requires that Panavision meet certain financial tests and contains
other restrictive covenants including limitations on indebtedness, leverage
ratio levels, interest coverage ratio levels and restrictions on the ability
of Panavision to declare or pay dividends to its stockholders. As of December
31, 2001, the Company believes that Panavision was in compliance with all
financial covenants of the Existing Credit Agreement.

         At the closing of the Panavision Acquisition, Ronald O. Perelman,
Holdings' sole shareholder, delivered a letter to M & F Worldwide in which
Mr. Perelman agreed that, if M & F Worldwide determines in its good faith
reasonable judgment that Panavision is unable to make required payments of
principal or interest under its Existing Credit Agreement or its Existing
Notes, he or corporations under his control will provide such financial
support to M & F Worldwide as may be required by Panavision in connection
with such payments of principal and interest. The financial support from
Mr. Perelman will be in such amount as M & F Worldwide determines.

         On March 15, 2002, Panavision amended its Existing Credit
Agreement to, among other things, revise certain of the financial tests and
required ratios that Panavision must maintain through December 31, 2002
(the "March Amendment").

         In connection with the March Amendment, Panavision agreed with the
lenders under the Existing Credit Agreement to pay the lenders a fee equal
to 1% of the amount of the Existing Credit Agreement if Panavision does not
reduce amounts outstanding under the Existing Credit Agreement by $100.0
before June 30, 2002. Under the Existing Credit Agreement, as amended, it
is an event of default if Panavision does not receive $10.0 in cash equity
in exchange for shares of newly issued Panavision Common Stock or perpetual
preferred stock ("Perpetual Preferred Stock") by June 30, 2002 or it does
not apply such amount, promptly after receiving it, as an optional
pre-payment of the revolving credit facility. The Company currently expects
that Panavision will receive such a cash contribution from one of its
affiliates unless the Existing Credit Agreement is terminated or amended to
remove this event of default prior to June 30, 2002. It is also an event of
default under the amended Existing Credit Agreement if Panavision does not
receive $37.7 principal amount at maturity of the Existing Notes in
exchange for shares of Panavision's newly issued Common Stock or Perpetual
Preferred Stock, on the earlier of two business days after the settlement
of the Consolidated Action (see Note 12) or June 30, 2002 or cancel such
Existing Notes promptly after receiving them. The board of M & F Worldwide
has approved the acquisition of $37.7 principal amount at maturity of the
Existing Notes and has also agreed to contribute these Existing Notes to
Panavision in exchange for shares of Panavision's Perpetual Preferred
Stock. The board of Panavision has approved the issuance of shares of its
Perpetual Preferred Stock in exchange for the contribution of the Existing
Notes.

         During 2002, Panavision is required to make principal payments
under its Existing Credit Agreement of $23.7.

         The Existing Notes were issued at a discount representing a yield
to maturity of 95/8%. There are no periodic payments or interest through
February 1, 2002. Thereafter, they bear interest at a rate of 95/8% per
annum, payable semi-annually on February 1 and August 1 of each year,
commencing August 1, 2002.

         As discussed in Note 2, in December 2001, M & F Worldwide
delivered Existing Notes with an aggregate principal amount of $24.5 to
Panavision in exchange for 1,381,690 shares of Panavision's Series A
Preferred Stock. The Existing Notes, which remain outstanding at December
31, 2001, have a principal amount at maturity of $182.0, exclusive of $11.4
principal amount at maturity owned by Pneumo Abex at December 31, 2001 that
have been eliminated in consolidation.

         The following sets forth the aggregate principal maturities of
Panavision's debt during the twelve-month periods ending December 31st :

                    2002                          $  23.7
                    2003                             42.8
                    2004                            180.9
                    2005                             29.9
                    2006                            182.0

         The aggregate principal amount for 2006 represents the fully
accreted value of the Existing Notes, exclusive of the effects of the
step-up in basis in connection with the Panavision Acquisition and $11.4
principal amount at maturity owned by Pneumo Abex that have been eliminated
in consolidation.

         In order to provide Panavision with additional financial and
operating flexibility and to improve its overall capital structure,
Panavision intends to undertake a refinancing of its existing debt which
Panavision expects to include a new credit agreement which Panavision
currently expects will provide for a term loan of up to $150.0 and a $30.0
revolving credit facility, an issuance of approximately $250.0 of secured
securities and the retirement of a substantial amount of its Existing
Notes. Panavision intends to use the proceeds of the issuance of the new
securities, together with borrowings under the new credit agreement, to
repay the Existing Credit Agreement and purchase or otherwise retire the
outstanding Existing Notes.

         Panavision currently expects that it will consummate the
refinancing transactions described above during the second quarter of 2002.
However, there can be no assurance that Panavision will be able to
consummate these refinancing transactions, or any particular transaction,
on the terms described above or at all. In the event that Panavision is
unable to consummate these refinancing transactions, it may be required to
seek additional sources of liquidity in order to meet its obligations under
the Existing Credit Agreement.

11.      Financial Instruments

         Most of the Company's customers are in the tobacco and
entertainment industries. The Company performs ongoing credit evaluations
of its customers and maintains allowances for potential credit losses. The
Company does not generally require collateral. Actual losses and allowances
have been within management's expectations.

         The carrying amounts for cash and cash equivalents, trade accounts
receivable, accounts payable, accrued liabilities and debt approximate fair
value.

12.      Commitments and Contingencies

Lease and Purchase Commitments

         Rental expense, which includes rent for facilities, equipment and
vehicles, under operating leases amounted to $6.0 (including Panavision
after April 19, 2001), $0.3 and $0.1 for the years ended December 31, 2001,
2000 and 1999, respectively. Future minimum rental commitments for
operating leases with noncancelable terms in excess of one year from
December 31, 2001 are as follows:

                          2002                           $  7.9
                          2003                              6.7
                          2004                              5.5
                          2005                              4.7
                          2006                              4.0
                          Thereafter                       14.4
                                                         -------
                                                         $ 43.2

         Mafco Worldwide had outstanding letters of credit totaling $4.6 at
both December 31, 2001 and 2000. Amounts available to Panavision under
various letters of credit total approximately $0.6, all with expiration
dates ranging from June, 2002 through June, 2004. In addition, Panavision
has various lines of credit totaling approximately $1.3 at December 31,
2001, under which no amounts were drawn.

         At December 31, 2001, Mafco Worldwide had obligations to purchase
approximately $9.9 of raw materials.

Corporate Indemnification Matters

         The Company is indemnified by third parties with respect to
certain of its contingent liabilities, such as certain environmental and
asbestos matters, as well as certain tax and other matters. In connection
with the Abex Merger, a subsidiary of Abex, M & F Worldwide, Pneumo Abex
and certain other subsidiaries of M & F Worldwide entered into a transfer
agreement (the "Transfer Agreement"). Under the Transfer Agreement,
substantially all of Abex's consolidated assets and liabilities, other than
those relating to Aerospace, were transferred to a subsidiary of MCG, with
the remainder being retained by Pneumo Abex. The Transfer Agreement
provides for appropriate transfer, indemnification and tax sharing
arrangements, in a manner consistent with applicable law and existing
contractual arrangements.

         The Transfer Agreement requires such subsidiary of MCG to
undertake certain administrative and funding obligations with respect to
certain asbestos claims and other liabilities, including environmental
claims, retained by Pneumo Abex. The Company will be obligated to make
reimbursement for the amounts so funded only when amounts are received by
the Company under related indemnification and insurance agreements. Such
administrative and funding obligations would be terminated as to asbestos
products claims in the case of a bankruptcy of Pneumo Abex or M & F
Worldwide or of certain other events affecting the availability of coverage
for such claims from third-party indemnitors and insurers. In the event of
certain kind of disputes with Pneumo Abex's indemnitors regarding their
indemnities, the Transfer Agreement permits the Company to require such
subsidiary to fund 50% of the costs of resolving the disputes.

         Prior to 1988, a former subsidiary of the Company manufactured
certain asbestos-containing friction products. Pneumo Abex has been named,
typically along with 10 to as many as 100 or more other companies, as a
defendant in various personal injury lawsuits claiming damages relating to
exposure to asbestos. Pursuant to indemnification agreements,
PepsiAmericas, Inc., formerly known as Whitman Corporation (the "Original
Indemnitor"), has retained ultimate responsibility for asbestos-related
claims made through August 1998 and for certain asbestos-related claims
asserted thereafter. In connection with the sale by Abex in December 1994
of its Friction Products Division, a subsidiary (the "Second Indemnitor")
of Cooper Industries, Inc. (the "Indemnity Guarantor") assumed
responsibility for substantially all of the asbestos-related claims made
after August 1998. Federal-Mogul Corporation purchased the Second
Indemnitor in October 1998. In October 2001, the Second Indemnitor filed a
petition under Chapter 11 of the U.S. Bankruptcy Code and stopped
performing its indemnity obligations to the Company. Performance of the
Second Indemnitor's indemnity obligation is guaranteed by the Indemnity
Guarantor. Following the bankruptcy filing of the Second Indemnitor, the
Indemnity Guarantor confirmed that it will fulfill the Second Indemnitor's
indemnity obligations to the extent that they are no longer being performed
by the Second Indemnitor for all claims other than a small portion of the
indemnified asbestos-related claims. As to that portion, the Company and
MCG in November 2001 commenced an arbitration (the "Arbitration") against
the Indemnity Guarantor seeking, among other things, an order confirming
the Indemnity Guarantor's obligation and reimbursement of amounts that the
Company has been required to advance on the Indemnity Guarantor's behalf in
the interim. The Indemnity Guarantor has filed two counterclaims in the
Arbitration. The first seeks an offset to the Company's claim for
reimbursement for any amount that the Indemnity Guarantor claims should
have been payable by insurance, to the extent that the Company prevails in
its claim. The second counterclaim seeks reimbursement of amounts the
Indemnity Guarantor has paid with respect to these claims to the extent
that the Arbitration panel upholds its position on the scope of the
indemnity. The Company expects that all presentations in the Arbitration
will be complete by May 2002 and that it will prevail in all respects.
Accordingly, at December 31, 2001, the Company has not recorded any reserve
against its outstanding receivable of $2.8 with the Indemnity Guarantor.

         Pneumo Abex's former subsidiary maintained product liability
insurance covering substantially all of the period during which
asbestos-containing products were manufactured. The subsidiary commenced
litigation in 1982 against a portion of these insurers in order to confirm
the availability of this coverage. As a result of settlements in that
litigation, other coverage agreements with other carriers and payments by
the Original Indemnitor, the Second Indemnitor and the Indemnity Guarantor
pursuant to their indemnities, Pneumo Abex is receiving reimbursement in
full each month for its monthly expenditures for asbestos-related claims
other than expenses for the claims subject to the Arbitration. Pneumo Abex
is unable to forecast either the number of future asbestos-related
claimants or the amount of future defense and settlement costs associated
with present or future asbestos-related claims.

         The Transfer Agreement further provides that MCG will indemnify
Pneumo Abex with respect to all environmental matters associated with
Pneumo Abex's and its predecessor's operations to the extent not paid by
third party indemnitors or insurers, other than the operations relating to
Pneumo Abex's Aerospace business which were sold to Parker Hannifin
Corporation in April 1996. Accordingly, environmental liabilities arising
after the 1988 transaction with the Original Indemnitor that relate to the
Company's former Aerospace facilities will be the responsibility of Pneumo
Abex. The Original Indemnitor is obligated to indemnify Pneumo Abex for
costs, expenses and liabilities relating to environmental and natural
resource matters to the extent attributable to the pre-1988 operation of
the businesses acquired from the Original Indemnitor, subject to certain
conditions and limitations principally relating to compliance with notice,
cooperation and other procedural requirements. The Original Indemnitor is
generally discharging its environmental indemnification liabilities in the
ordinary course.

         It is generally not possible to predict the ultimate total costs
relating to any remediation that may be demanded at any of the sites
subject to the indemnity from the Original Indemnitor due to, among other
factors, uncertainty regarding the extent of prior pollution, the
complexity of applicable environmental laws and regulations and their
interpretations, uncertainty regarding future changes to such laws and
regulations or their enforcement, the varying costs and effectiveness of
alternative cleanup technologies and methods, and the questionable and
varying degrees of responsibility and/or involvement by Pneumo Abex.
However, the aggregate cost of cleanup and related expenses with respect to
matters for which Pneumo Abex, together with numerous other third parties,
have been named potentially responsible parties should be substantially
less than $150.0, including approximately $10.0 in remedial action costs in
respect of one site actively managed and funded by the Original Indemnitor.

         On February 5, 1996, the Company, through Pneumo Abex, entered
into a reimbursement agreement with Chemical Bank and MCG (the
"Reimbursement Agreement"). The Reimbursement Agreement provides for
letters of credit totaling $20.8 covering certain environmental issues
relating to such site and not related to the current business of Pneumo
Abex. During 2000, the Environmental Protection Agency reduced the letter
of credit requirements to $2.2. The cost of the letters of credit are being
funded by MCG and/or the Original Indemnitor. Pneumo Abex had $2.2 of
letters of credit outstanding at both December 31, 2001 and 2000,
respectively, in connection with the Reimbursement Agreement.

         The Company has not recognized any liability in its financial
statements for matters covered by indemnification agreements. The Company
considers these obligations to be those of third-party indemnitors and
monitors their financial positions to determine the level of uncertainty
associated with their ability to satisfy their obligations. Based upon the
indemnitors' active management of indemnifiable matters, discharging of the
related liabilities when required, and financial positions based upon
publicly filed financial statements, as well as the history of insurance
recovery set forth above, the Company believes that the likelihood of
failing to obtain reimbursement of amounts covered by insurance and
indemnification is remote.

         During 1999, the Original Indemnitor and Pneumo Abex conducted an
arbitration concerning certain aspects of the scope of the indemnity from
the Original Indemnitor. On March 6, 2000, the arbitration panel issued its
decision confirming that the indemnity applies as described herein, except
that it did not extend to 87 asbestos-related claims, all of which have
been resolved previously.

         Various legal proceedings, claims and investigations are pending
against M & F Worldwide and Pneumo Abex, including those relating to
commercial transactions, product liability, safety and health matters and
other matters. M & F Worldwide and Pneumo Abex are involved in various
stages of legal proceedings, claims, investigations and cleanup relating to
environmental or natural resource matters, some of which relate to waste
disposal sites. Most of these matters are covered by insurance, subject to
deductibles and maximum limits, and by third-party indemnities.

         The former Aerospace business of the Company formerly sold certain
of its aerospace products to the U.S. Government or to private contractors
for the U.S. Government. Certain claims for allegedly defective pricing
made by the U.S. Government with respect to certain of these aerospace
product sales were retained by Pneumo Abex in the Aerospace sale and remain
outstanding. In each case Pneumo Abex contests the allegations made by the
U.S. Government and has been attempting to resolve these matters without
litigation.

         Panavision and its subsidiaries are defendants in actions for
matters arising out of normal business actions.

         The Company believes that the outcome of such pending legal
proceedings in the aggregate will not have a material adverse effect on the
Company's consolidated financial position or results of operations. The
Company carries general liability insurance but has no health hazard
policy, which, to the best of the Company's knowledge, is consistent with
industry practice.

Other Litigation Matters

         In November 2000, five purported derivative and/or class actions
were filed in New Castle County, Delaware Chancery Court against the
Company, its board of directors and, in one case, Holdings and MCG. These
actions, as well as a similar action filed in New York County, New York
Supreme Court, challenged as unfair to the Company's public shareholders
the original proposal to sell to the Company the stake in Panavision then
indirectly owned by Holdings. Following consummation of the Panavision
transaction in April 2001, the five Delaware actions were consolidated
under the caption In re M & F Worldwide Corp. Shareholders Litigation, C.A.
No. 18502-NC (the "Consolidated Action"), the operative complaint in the
Consolidated Action was amended to challenge the transaction as
consummated, and another shareholder filed a related action in the Delaware
Chancery Court, captioned Vannini v. Perelman, et al., C.A. No. 18850-NC.
The operative complaints sought, among other things, rescission of the
transaction, damages, a declaratory judgment that the transaction was
unfair as to process and as to price, and plaintiffs' costs and attorneys'
fees. The Company and the parties to the Vannini action settled that
litigation, pursuant to which, among other things, the Company acquired one
million shares of Company common stock held by the plaintiff, the plaintiff
dismissed his claim with prejudice, and the Company agreed to pay to
plaintiff $10.0 plus up to $1.0 for reimbursement of his legal costs. The
Company recorded treasury stock of $6.5 and shareholder litigation
settlement expense of $4.5 in 2001 in connection with the Vannini
settlement. After the Vannini settlement, plaintiffs in the Consolidated
Action commenced a separate derivative action in the Delaware Chancery
Court against the Company's directors and Holdings challenging the
settlement as a breach of fiduciary duty.

         In January 2002, during the trial of the Consolidated Action, the
defendants and certain of the plaintiffs reached an agreement in principle,
which agreement has subsequently been reduced to a definitive written
agreement, concerning the settlement and ultimate dismissal of the
Consolidated Action and the action challenging the Vannini settlement. The
principal terms of the agreement, which are subject to court approval, are
as follows:

         o        Shareholders who held Company common stock on April 19,
                  2001 and who continue to hold through the date of the
                  settlement hearing (the "Settlement Class") will be
                  entitled to obtain up to $2.15 per share, with the amount
                  being reduced proportionately if necessary so that the
                  total payout will not exceed $12 (the "Settlement Fund").

         o        Counsel for the Settlement Class will receive attorneys'
                  fees and expenses as awarded by the court, up to $2.75.

         o        All decisions contemplated to be made by the Company
                  under that certain letter agreement dated April 19, 2001
                  between the Company and the sole shareholder of Holdings
                  shall be made by a committee of Company directors who are
                  and were not directly or indirectly employed by such sole
                  shareholder and are otherwise disinterested (the
                  "Independent Committee").

         o        Defendants in the Consolidated Action shall not make, or
                  cause or permit their affiliates to make, any future
                  purchase of the Existing Notes of Panavision without
                  first offering to the Company the opportunity to make
                  such purchase, which opportunity shall be evaluated by
                  the Independent Committee.

         o        The Company shall have the right to purchase from
                  Holdings approximately $37.7 principal amount at maturity
                  of Existing Notes at any time through the maturity of
                  such Existing Notes and in the sole discretion of the
                  Independent Committee, at a price equal to the current
                  holder's purchase price plus a reasonable cost of carry.

         o        The Consolidated Action and the action challenging the
                  Vannini settlement shall be dismissed with prejudice, and
                  the Settlement Class shall provide to defendants a full
                  release of all claims relating to the subject of such
                  lawsuits or any corporate opportunity claim relating to
                  the purchase of Existing Notes by certain defendants or
                  their affiliates.

         Pursuant to agreements, the Settlement Fund is not the
responsibility of the Company and the cash portion of the settlement will
be funded entirely from insurance. As a result, the Company has neither
accrued any liability nor recorded a receivable for recovery from insurers
as of December 31, 2001. Certain of the named plaintiffs in the
Consolidated Action have indicated to the court that they intend to oppose
the settlement when it is presented for approval. While the Company
believes that the settlement is fair, reasonable and in the best interests
of the Company's shareholders, it can give no assurance that the court will
approve it.

13.      Related Party Transactions

         During fiscal 2001, the three executive officers of the Company
were executives of Holdings. Such executive officers were not compensated
by the Company. Accordingly, in accordance with Securities and Exchange
Commission Staff Accounting Bulletin 79, "Accounting for Expenses or
Liabilities Paid by Principal Stockholder(s)," the value of the services
provided by such officers to the Company in the amount of $1.5 is reflected
in the accompanying consolidated financial statements as compensation
expense and a corresponding increase to paid-in-capital. Neither Holdings
nor any of such executive officers received any payment from the Company in
connection with its recognition for accounting purposes of such $1.5 of
compensation expense.

         Included in accounts payable in the consolidated balance sheet at
December 31, 2001, is $1.2 due to Holdings.

         The Company paid a subsidiary of Holdings $0.8 and $0.3 to
reimburse to it a portion of the chief executive officer's compensation
expense in 2000 and 1999, respectively, representing time devoted by him to
the affairs of the Company. The Company received from a subsidiary of
Holdings $0.1 to reimburse to it a portion of another executive of the
Company's salary expense in both 2000 and 1999 representing time devoted by
him to the affairs of such subsidiary of Holdings.

         At December 31, 2001, the Company recorded amounts payable to DHD
Ventures, LLC (see Note 15) of approximately $0.2 relating to equipment
rentals facilitated by Panavision on behalf of DHD Ventures. Such amount is
included as a reduction of accounts receivable in the accompanying
consolidated balance sheets.

         Included in other assets at December 31, 2001 is a note receivable
of approximately $0.3 due in 2003 from Pany Rental, Inc. (dba Panavision
New York), an agent in which Panavision holds a one-third interest.

         In December 2001, Panavision entered into a lease agreement with
TFN Lighting Corp. ("TFN"), a wholly owned subsidiary of Pany Rental, Inc.
(dba Panavision New York), whereby Panavision leased to TFN certain of its
lighting and related equipment located in the United States. The lease term
commences on February 1, 2002 and continues for 45 months. Monthly rental
payments are due in specified amounts as outlined in the lease agreement.
At the end of the Option Term, as defined in the lease, TFN will have the
option to purchase the lighting and related equipment covered by the lease.

         See also Note 2, Acquisitions, and Note 12, Commitments and
Contingencies.

14.      Significant Customer

         Mafco Worldwide has a significant customer in the tobacco
industry, Philip Morris Companies Inc., which accounted for approximately
31% of Mafco Worldwide's net revenues in 2001, 30% of 2000 net revenues and
29% of net revenues in 1999.

15.      DHD Ventures

         In July 2000, Panavision announced the establishment of a
strategic relationship with Sony Electronics Inc. ("Sony") to form DHD
Ventures, LLC ("DHD Ventures"). Panavision owns 51% of DHD Ventures but
does not exercise control. As a result, Panavision's investment in DHD
Ventures is accounted for under the equity method. DHD Ventures, along with
Panavision, couples Sony's 24P CINEALTA(TM) high definition digital camera
with Panavision's advanced PRIMO DIGITAL(TM) lenses to form a
state-of-the-art digital camera system for use in the motion picture and
television industry. These camera systems are available for rent
exclusively through Panavision's domestic and international owned and
operated facilities and worldwide agent network.

         In addition, Sony purchased, for an aggregate consideration of
$10.0, 714,300 shares of Panavision Common Stock, representing
approximately 8% of Panavision's Common Stock, and a warrant to acquire an
additional 714,300 shares of Panavision Common Stock at an exercise price
of $17.50 per share, subject to adjustment. The warrants are fully
exercisable at any time through July 25, 2010.

16.      Segment and Geographic Information

         As a result of the Panavision Acquisition in April of 2001, the
Company has two significant industry segments. Mafco Worldwide produces
licorice extract for the tobacco and confectionery industries. Panavision
designs, manufactures and supplies high precision camera systems for the
motion picture and television industries, rents lighting equipment and
sells goods and services for those markets.

<TABLE>
<CAPTION>

                                                                             Year ended December 31,
                                                                  -----------------------------------------------
                                                                     2001              2000               1999
                                                                  ----------         ---------         ---------
         Net sales to external customers (a)
           Panavision
<S>                                                               <C>                <C>               <C>
              North America                                       $   66.7           $   -             $   -
              Europe                                                  43.8               -                 -
              Asia/Pacific                                            14.5               -                 -
                                                                  ---------          ---------         ---------
                Subtotal                                             125.0               -                 -
           Mafco Worldwide
              North America (b)                                       84.7              79.8              81.8
              France                                                  13.7              13.3              15.5
                                                                  ---------          ---------         ---------
                Subtotal                                              98.4              93.1              97.3
                                                                  ---------          ---------         ---------
                Total                                             $  223.4             $93.1             $97.3
                                                                  =========          =======           ========

(a)      Revenues reported by country of domicile.
(b)      Includes export sales of $30.7, $28.2, and $28.9 in 2001, 2000, and 1999 respectively.

</TABLE>

<TABLE>
<CAPTION>

                                                                              Year ended December 31,
                                                                  ----------------------------------------------
                                                                     2001              2000               1999
                                                                  ----------         ---------         ---------
         Operating income (loss)
           Panavision
<S>                                                               <C>                <C>               <C>
              North America                                       $    4.5           $   -             $   -
              Europe                                                  (1.1)              -                 -
              Asia/Pacific                                             1.1
              Corporate                                                1.7               -                 -
                                                                  ---------          ---------         ---------
                Subtotal                                               6.2               -                 -
           Mafco Worldwide
              North America (b)                                       34.1             31.1              32.5
              France                                                   4.4              3.9               4.0
              Pension reversion gain                                  11.1               -                 -
              Corporate                                               (4.4)             0.4              (1.5)
                                                                  ----------         ---------         ---------
                Subtotal                                              45.2              35.4              35.0

           Corporate expenses                                         (7.3)             (0.4)             (0.5)
                                                                  ----------         ----------         --------

           Operating income                                       $   44.1               $35.0             $34.5
                                                                  ==========         ===========        ========
</TABLE>

<TABLE>
<CAPTION>

                                                                           December 31,
                                                                     2001              2000
                                                                  ----------         ---------
         Long lived assets
           Panavision
<S>                                                               <C>                <C>
              North America                                       $  464.0           $   -
              Europe                                                  79.6               -
              Asia/Pacific                                            12.1               -
              Corporate                                               53.8               -
                                                                  ---------          ---------
                Subtotal                                             609.5               -
           Mafco Worldwide
              North America                                           19.0              39.9
              France                                                  15.0              16.0
              Other, foreign                                           1.5               2.0
              Corporate                                              149.4             150.9
                                                                  ---------          ---------
                Subtotal                                             184.9             208.8
                                                                  --------           ---------
                Total                                             $  794.4            $208.8
                                                                  ========            ========
</TABLE>

17.      Unaudited Quarterly Financial Information

         The following is a summary of unaudited quarterly financial
information for 2001 and 2000:

<TABLE>
<CAPTION>

                                                                                    2001
                                                       -------------------------------------------------------------
                                                           First          Second(1)          Third(1)      Fourth(1)
                                                           -----          ------             -----         ------

<S>                                                        <C>               <C>              <C>            <C>
         Net sales                                         $25.4             $69.1            $61.5          $67.4
         Gross profit                                       12.0              34.1             24.6           29.0
         Net income (loss)                                   9.0               3.8             (8.2)           1.5
         Income (loss) per common share:
           Basic                                           $0.47            $0.15            $(0.31)         $0.06
           Diluted                                         $0.47            $0.15            $(0.31)         $0.06


                                                                                    2000
                                                        ------------------------------------------------------------
                                                           First            Second            Third           Fourth

         Net sales                                         $23.0             $24.9            $22.6          $22.6
         Gross profit                                       10.8              11.9             10.6           10.6
         Net income                                          4.4               5.1              4.6            5.0
         Income per common share:
           Basic                                           $0.21             $0.25             $0.24          $0.26
           Diluted                                         $0.21             $0.25             $0.24          $0.26
</TABLE>

         Certain amounts previously reported have been reclassified to
conform to the December 31, 2001 presentation.

(1)  The second, third and fourth quarters of 2001 include the results of
     Panavision after April 19, 2001.


18.      Earnings Per Share

         The following table sets forth the computation of basic and
diluted earnings per share:

<TABLE>
<CAPTION>

                                                                                 Year ended December 31,
                                                                       -----------------------------------------
                                                                        2001              2000            1999
                                                                       ------            ------          -------
         Numerator:
<S>                                                                    <C>               <C>             <C>
             Income before net extraordinary gain                      $   1.8           $  19.1         $  19.1
           Net extraordinary gain, net of taxes                            4.3                -               -
                                                                       --------          --------        -------
           Net income                                                      6.1              19.1           19.1
           Preferred stock dividends                                      (0.2)               -            (1.5)
                                                                       --------          --------        -------
           Numerator for basic earnings per share:
              Income available to common stockholders                  $   5.9           $  19.1         $ 17.6
                                                                       =========         ========        ========

           Numerator for diluted earnings per share:
             Income available to common stockholders
                Net income                                             $  5.9           $  19.1          $ 19.1
                                                                       =========        =========        ========

         Denominator (in millions):
           Basic earnings per share-weighted average shares
              Common                                                     20.0              20.0            20.7
              Preferred - participating                                   4.3                -               -
           Effect of dilutive securities:
              Convertible preferred stock                                 -                 -               2.3
              Employee stock options                                      -                 -               0.1
                                                                       ---------       ----------        ----------
           Diluted earnings per share-weighted
               average shares and assumed conversions                    24.3              20.0             23.1
                                                                       =========       ==========        ==========

         Basic earnings per share:
           Income before net extraordinary gain                           0.06              0.96             0.85
           Net extraordinary gain, net of taxes                           0.18               -                -
                                                                       ---------       ----------        ----------
           Available to common stockholders                            $  0.24           $  0.96          $  0.85
                                                                       =========       ==========        ==========

         Diluted earnings per share:
           Income before net extraordinary gain                           0.06              0.96             0.83
           Net extraordinary gain, net of taxes                           0.18               -                -
                                                                       ---------       ----------        ----------
           Available to common stockholders                            $  0.24           $  0.96          $  0.83
                                                                       =========       ==========        ==========
</TABLE>


19.      Subsequent Event (Unaudited)

         M & F Worldwide has agreed to sell Panavision all of the issued
and outstanding shares of Las Palmas Productions, Inc., for a purchase
price of approximately $6.7, subject to the consummation of a refinancing
of its Existing Credit Agreement.

<TABLE>
<CAPTION>

         Schedule I - Condensed Financial Information of Registrant
                        Balance Sheets (Parent Only)
                    (in millions, except per share data)

                                                                                      December 31,
                                                                             ------------------------------
                                                                                  2001               2000
                                                                             -------------   ---------------
                                 ASSETS
Current assets:

<S>                                                                           <C>                 <C>
    Cash and cash equivalents                                                 $      2.8          $        -
    Prepaid expenses and other                                                       3.8                  0.2
                                                                             ---------------    ---------------
      Total current assets                                                           6.6                  0.2

Investment in subsidiaries                                                         291.6                243.3
Receivable from subsidiaries                                                          -                   1.0
Other assets                                                                         1.7                  1.3
                                                                             ---------------    ---------------
                                                                              $     299.9         $     245.8
                                                                             ===============    ===============


                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

   Accounts payable                                                           $      1.6          $        -
   Accrued expenses                                                                  0.2                  0.1
   Payable to subsidiaries                                                           1.1                   -
                                                                             ---------------    ---------------
     Total current liabilities                                                       2.9                  0.1

Other liabilities                                                                    1.1                  -
Stockholders' equity:
   Common stock, par value $.01;  250,000,000 shares authorized;
      20,663,171 shares issued at December 31, 2001 and 2000                         0.2                  0.2
   Preferred stock, liquidation value $6.50
      6,848,820 shares issued (aggregate liquidation preference of
         $44.5 plus declared and unpaid dividends)                                  41.7                  -
    Additional paid-in capital                                                      27.9                 27.0
    Treasury stock at cost
      1,041,900 shares at December 31, 2001; 1,541,900 shares at
      December 31, 2000                                                             (6.7)                (8.7)
   Retained earnings                                                               241.3                235.4
   Accumulated other comprehensive income                                           (8.5)                (8.2)
                                                                             ---------------    ---------------
      Total stockholders' equity                                                   295.9                245.7
                                                                             ---------------    ---------------
    Total liabilities and stockholders' equity                                $     299.9         $     245.8
                                                                             ===============    ===============

                      See Note to Schedule I - Condensed Financial Information of Registrant

</TABLE>

<TABLE>
<CAPTION>

                       Schedule I - Condensed Financial Information of Registrant
                            Consolidated Statements of Income (Parent Only)
                                  (in millions, except per share data)

                                                                     Year Ended December 31,
                                                         ------------------------------------------------
                                                             2001             2000              1999
                                                         -------------    --------------    -------------

<S>                                                      <C>              <C>               <C>
General and administrative expenses                      $       2.8      $      0.4        $      0.5
Shareholder litigation settlement                                4.5             -                 -
                                                         -------------    --------------    -------------
    Operating loss                                               7.3             0.4               0.5

Interest, investment and other income, net                      (0.3)            -                 -
                                                         -------------    --------------    -------------
    Loss from continuing operations before taxes                 7.0             0.4               0.5
Benefit from income taxes                                       (2.4)           (0.1)             (0.2)
                                                         -------------    --------------    -------------
    Loss from continuing operations                              4.6             0.3               0.3

Equity in income of subsidiaries                                10.7            19.4              19.4
                                                         -------------    --------------    -------------
     Net income                                                  6.1            19.1              19.1
                                                         -------------    --------------    -------------
Preferred stock dividends                                       (0.2)            -                (1.5)
                                                         -------------    --------------    -------------
    Net income available to common stockholders          $       5.9      $     19.1        $     17.6
                                                         =============    ==============    =============



              See Note to Schedule I - Condensed Financial Information of Registrant

</TABLE>


<TABLE>
<CAPTION>

         Schedule I - Condensed Financial Information of Registrant
            Consolidated Statements of Cash Flows (Parent Only)
                               (in millions)

                                                                            Year Ended December 31,
                                                           -----------------------------------------------------------
                                                                 2001                 2000                 1999
                                                           -----------------    -----------------    -----------------
Operating activities
<S>                                                        <C>                  <C>                  <C>
Net income                                                 $       6.1          $        19.1        $        19.1
Adjustments to reconcile net income to total cash
        provided by operating activities:
              Equity in income of subsidiaries less
               than/ (in excess of) cash distributions            90.8                  (10.7)                 0.6
         Compensation expense paid by principal
                     stockholder                                   1.5                    -                     -
Changes in assets and liabilities:
         Receivable from/payables to subsidiaries                  2.1                    0.8                  2.1
         Other, net                                               (4.5)                  (0.5)                (0.3)
                                                           -----------------    -----------------    -----------------
         Cash provided by operating activities                    96.0                    8.7                 21.5
                                                           -----------------    -----------------    -----------------

Investing activities
Purchase of Panavision Inc. stock                                (81.6)                   -                    -
Purchase of Panavision Inc. Existing Notes                        (9.0)                   -                    -
Purchase of Las Palmas Productions Inc. stock                     (6.0)                   -                    -
                                                           -----------------    -----------------    -----------------
         Cash used in financing activities                       (96.6)                   -                    -
                                                           -----------------    -----------------    -----------------

Financing activities
Redemption of preferred stock                                      -                      -                  (20.0)
Proceeds from preferred stock issued                              10.0                    -                    -
Repurchase of common stock                                        (6.5)                  (8.7)                 -
Preferred stock dividends paid                                    (0.1)                   -                   (1.5)
                                                           -----------------    -----------------    -----------------
         Cash used in financing activities                         3.4                   (8.7)               (21.5)
                                                           -----------------    -----------------    -----------------

Net increase in cash and cash equivalents                          2.8                    -                    -
Cash and cash equivalents at beginning of period                   -                      -                    -
                                                           -----------------    -----------------    -----------------
Cash and cash equivalents at end of period                 $       2.8          $         -          $         -
                                                           =================    =================    =================




                      See Note to Schedule I - Condensed Financial Information of Registrant

</TABLE>

         Schedule I - Condensed Financial Information of Registrant
          Note to Consolidated Financial Statements (Parent Only)
                (dollars in millions, except per share data)

Commitments and Contingencies

         In November 2000, five purported derivative and/or class actions
were filed in New Castle County, Delaware Chancery Court against the M & F
Worldwide Corp. (the "Company"), its board of directors and, in one case,
Mafco Holdings, Inc. ("Holdings") and Mafco Consolidated Group, Inc.
("MCG"). These actions, as well as a similar action filed in New York
County, New York Supreme Court, challenged as unfair to the Company's
public shareholders the original proposal to sell to the Company the stake
in Panavision Inc. ("Panavision") then indirectly owned by Holdings.
Following consummation of the Panavision transaction in April 2001, the
five Delaware actions were consolidated under the caption In re M & F
Worldwide Corp. Shareholders Litigation, C.A. No. 18502-NC (the
"Consolidated Action"), the operative complaint in the Consolidated Action
was amended to challenge the transaction as consummated, and another
shareholder filed a related action in the Delaware Chancery Court,
captioned Vannini v. Perelman, et al., C.A. No. 18850-NC. The operative
complaints sought, among other things, rescission of the transaction,
damages, a declaratory judgment that the transaction was unfair as to
process and as to price, and plaintiffs' costs and attorneys' fees. The
Company and the parties to the Vannini action settled that litigation,
pursuant to which, among other things, the Company acquired one million
shares of Company common stock held by the plaintiff, the plaintiff
dismissed his claim with prejudice, and the Company agreed to pay to
plaintiff $10.0 plus up to $1.0 for reimbursement of his legal costs. The
Company recorded treasury stock of $6.5 and shareholder litigation
settlement expense of $4.5 in 2001 in connection with the Vannini
settlement. After the Vannini settlement, plaintiffs in the Consolidated
Action commenced a separate derivative action in the Delaware Chancery
Court against the Company's directors and Holdings challenging the
settlement as a breach of fiduciary duty.

         In January 2002, during the trial of the Consolidated Action, the
defendants and certain of the plaintiffs reached an agreement in principle,
which agreement has subsequently been reduced to a definitive written
agreement, concerning the settlement and ultimate dismissal of the
Consolidated Action and the action challenging the Vannini settlement. The
principal terms of the agreement, which are subject to court approval, are
as follows:

         o        Shareholders who held Company common stock on April 19,
                  2001 and who continue to hold through the date of the
                  settlement hearing (the "Settlement Class") will be
                  entitled to obtain up to $2.15 per share, with the amount
                  being reduced proportionately if necessary so that the
                  total payout will not exceed $12 (the "Settlement Fund").

         o        Counsel for the Settlement Class will receive attorneys'
                  fees and expenses as awarded by the court, up to $2.75.

         o        All decisions contemplated to be made by the Company
                  under that certain letter agreement dated April 19, 2001
                  between the Company and the sole shareholder of Holdings
                  shall be made by a committee of Company directors who are
                  and were not directly or indirectly employed by such sole
                  shareholder and are otherwise disinterested (the
                  "Independent Committee").

         o        Defendants in the Consolidated Action shall not make, or
                  cause or permit their affiliates to make, any future
                  purchase of Panavision's 9 5/8% Senior Subordinated
                  Discount Notes (the "Existing Notes") without first
                  offering to the Company the opportunity to make such
                  purchase, which opportunity shall be evaluated by the
                  Independent Committee.

         o        The Company shall have the right to purchase from
                  Holdings approximately $37.7 principal amount at maturity
                  of Existing Notes at any time through the maturity of
                  such Existing Notes and in the sole discretion of the
                  Independent Committee, at a price equal to the current
                  holder's purchase price plus a reasonable cost of carry.

         o        The Consolidated Action and the action challenging the
                  Vannini settlement shall be dismissed with prejudice, and
                  the Settlement Class shall provide to defendants a full
                  release of all claims relating to the subject of such
                  lawsuits or any corporate opportunity claim relating to
                  the purchase of Existing Notes by certain defendants or
                  their affiliates.

         Pursuant to agreements, the Settlement Fund is not the
responsibility of the Company and the cash portion of the settlement will
be funded entirely from insurance. As a result, the Company has neither
accrued any liability nor recorded a receivable for recovery from insurers
as of December 31, 2001. Certain of the named plaintiffs in the
Consolidated Action have indicated to the court that they intend to oppose
the settlement when it is presented for approval. While the Company
believes that the settlement is fair, reasonable and in the best interests
of the Company's shareholders, it can give no assurance that the court will
approve it.


        Schedule II - Valuation and Qualifying Accounts and Reserves
                               (in millions)


         The following is a summary of the valuation and qualifying
accounts and reserves for the years ended December 31, 2001, 2000 and 1999.

<TABLE>
<CAPTION>

                                                         Impact of
                                                        Panavision
                                           Beginning      Inc.          Amounts       Balance       Ending
                                           Balance     Acquisition     Reserved     Written Off     Balance
                                       --------------- ------------- ------------- --------------- -------------
Allowance for Doubtful Accounts

<S>                                        <C>            <C>          <C>            <C>            <C>
December 31, 2001                          $ 0.2          $    1.8     $   0.2        $  0.5         $ 1.7
December 31, 2000                          $ 0.2          $    -       $   -          $    -         $ 0.2
December 31, 1999                          $ 0.1          $    -       $   0.1        $    -         $ 0.2

</TABLE>