<PAGE>




                                 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, 2003

                                       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.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

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

35 EAST 62ND STREET, NEW YORK, N.Y.                            10021
--------------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)

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

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
<S>                                                   <C>
           TITLE OF EACH CLASS                 NAME OF EACH EXCHANGE ON WHICH REGISTERED
           -------------------                 -----------------------------------------
Common Stock, par value $.01 per share               New York Stock Exchange, Inc.
</TABLE>

        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. [X]

         Indicate by checkmark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934). [X] Yes [ ]No

         The aggregate market value of the Common Stock held by non-affiliates
of the registrant (using the New York Stock Exchange closing price as of June
30, 2003, the last business day of the registrant's most recently completed
second fiscal quarter) was approximately $81,639,389. The number of shares of
Common Stock outstanding as of March 5, 2004 was 18,386,804.

         Portions of the registrant's 2004 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.



<PAGE>


                           M & F WORLDWIDE CORPORATION

                       INDEX TO ANNUAL REPORT ON FORM 10-K

                      FOR THE YEAR ENDED DECEMBER 31, 2003

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<CAPTION>
                                                                                                               PAGE

                                     PART I

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

Item 2        Properties....................................................................................     9

Item 3        Legal Proceedings.............................................................................     9

Item 4        Submission of Matters to a Vote of Security Holders...........................................    10


                                     PART II

Item 5        Market for Registrant's Common Equity and Related Stockholders Matters........................    11

Item 6        Selected Financial Data.......................................................................    11

Item 7        Management's Discussion and Analysis of Financial Condition and
              Results of Operations.........................................................................    13

Item 7A       Quantitative and Qualitative Disclosures about Market Risks...................................    22

Item 8        Financial Statements and Supplementary Data...................................................    23

Item 9        Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure......................................................................    23

Item 9A       Controls and Procedures.......................................................................    23


                                    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
              and Related Stockholder Matters...............................................................     *

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

Item 14       Principal Accountant Fees and Services........................................................     *

                                     PART IV

Item 15       Exhibits, Financial Statement Schedules and Reports on Form 8-K...............................    25
</TABLE>



--------------------------------

* Incorporated by reference from M & F Worldwide Corp. 2004 Proxy Statement



                                       2
<PAGE>




                                     PART I

ITEM 1.  BUSINESS

(A)      GENERAL

         M & F Worldwide Corp. ("M & F Worldwide" or the "Company") 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"). From April 19, 2001 until
December 3, 2002, the Company also conducted operations through its indirect
85.7%-owned subsidiary, Panavision Inc. ("Panavision"). On December 3, 2002, the
Company sold its interest in Panavision to Mafco Holdings Inc. ("Holdings")
pursuant to a settlement of various lawsuits challenging the Company's
acquisition of Panavision. Accordingly, the Company has treated the results of
Panavision as discontinued operations.

         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 Mafco Consolidated Group Inc.
("MCG"), the company resulting from the Abex Merger and currently a wholly owned
subsidiary of Holdings, 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. The Company sold
Aerospace to Parker Hannifin Corporation in April 1996.

         On November 25, 1996, M & F Worldwide 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. 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,
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 "Panavision
Acquisition"). The aggregate consideration for the Acquired Shares was $121.0
million, consisting 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 of M & F Worldwide having
a liquidation preference of $6.50 per share and one vote per share (the "Series
B Preferred Stock").

         On December 21, 2001, 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 9 5/8% Senior Subordinated Notes of Panavision
due 2006 (the "Notes") for $8.1 million. Such Notes, together with $2.5 million
principal amount of 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 (the "Panavision Series A
Preferred Stock").

         Certain shareholders of the Company brought suits against the Company
and its directors challenging the Panavision Acquisition as an alleged breach of
fiduciary duty and seeking, among other things, rescission of the transaction.
One of the shareholders dismissed his lawsuit pursuant to a settlement in 2001.
On July 26, 2002, the Company and the other parties to the litigation reached a
Stipulation of Settlement (the "Settlement"). Under the terms of the Settlement
approved by the Chancery Court, Holdings (i) acquired (a) the shares of
Panavision common stock that the Company purchased in April 2001, (b) the shares
of Panavision Series A Preferred Stock that the Company acquired in December
2001, (c) $11.4 million principal amount of Notes that Pneumo Abex acquired in
November 2001, and (d) a note in the amount of $6.7 million (the "Las Palmas
Note") that Panavision issued to the Company on its acquisition of the shares of
Las Palmas Productions, Inc. ("Las Palmas") in July 2002, and (ii) delivered to
the Company $90.1 million in cash and all of the shares of M & F Worldwide
Common Stock and Series B Preferred Stock that Holdings had acquired since April
2001. In addition, all agreements to which the Company was a party that were
entered into in connection with the Panavision Acquisition and the December 2001
issuance of the Panavision Series A Preferred Stock were terminated. The
Settlement was consummated on December 3, 2002, and the Company has presented
the operations of Panavision as discontinued (see Item 3. Legal Proceedings).

         At December 31, 2003, Holdings' indirect beneficial ownership of M & F
Worldwide represented 38.3% of the outstanding M & F Worldwide Common Stock.



                                       3
<PAGE>


(B)      INDUSTRY SEGMENTS

         Subsequent to the Settlement, the Company has one segment, which is the
production of flavorings, primarily licorice flavorings, for sale to the tobacco
and confectionery industries.

(C)      NARRATIVE DESCRIPTION OF BUSINESS

         The Company produces a variety of licorice flavors from licorice root,
intermediary licorice flavors produced by others and certain other ingredients
at its facilities in Camden, New Jersey; Richmond, Virginia; Gardanne, France;
and Xianyang Shaanxi, People's Republic of China. Over 70% of the Company'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 other tobacco
products, the particular formulation and quantity used by each brand is an
important element in the brand's flavor. The Company also sells licorice
flavorings to worldwide confectioners, food processors and pharmaceutical
manufacturers for use as flavoring or masking agents. In addition, the Company
sells licorice root residue as garden mulch under the name Right Dress. The
Company 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 foods.

         The Company 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

         The Company 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 enhance its overall licorice
business.

PRODUCTS AND MANUFACTURING

         LICORICE FLAVORING AGENTS. The Company 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 Shaanxi, People's Republic of China. The Company 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, semi fluid 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. The Company
maintains finished goods inventories of sufficient quantity to normally provide
immediate shipment to its tobacco and non-tobacco customers.

         NON-LICORICE FLAVORING AGENTS AND PLANT PRODUCTS. The Company also
sells flavoring agents and plant products to the tobacco, spice, pharmaceutical
and health food industries. The Company cleans, grinds or cuts raw spices, herbs
and plant products into finished 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, the
Company acquires the root in local markets for shipment to the Company's
processing facilities in Camden, New Jersey or Gardanne, France. Most of the
licorice root processed by the Company originates in Afghanistan, the People's
Republic of China, Pakistan, Iraq, Azerbaijan, Uzbekistan, Turkmenistan, Syria
and Turkey. Through many years of experience, the Company has developed
extensive knowledge and relationships with its suppliers in these areas.
Although the amount of licorice root the Company purchases from any individual
source or country varies from year to year depending on cost and quality, the
Company endeavors to purchase some licorice root from all available sources.
This enables the Company 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, the Company will be able
to replace that source with licorice root from another area or supplier. The
unrest in Afghanistan did not have a significant effect on the Company's total
root supply, and root supplies, which had been interrupted in 2001, resumed in
2002. During 2003, the Company had numerous suppliers of root and one vendor who
supplied over 50% of the Company's total root purchases. The Company tries to
maintain a sufficient licorice raw material inventory and open purchase
contracts to meet normal production needs for three years. At December 31, 2003,
the Company had on hand a supply of licorice raw material approaching three
years. Licorice root has an



                                       4
<PAGE>


indefinite retention period as long as it is kept dry, and therefore the Company
has experienced little, if any, material spoilage. The Company has been able to
obtain licorice raw materials without interruption since World War II, even
though there has been periodic instability in the areas of the world where
licorice raw materials are obtained.

         In addition to licorice root, the Company also uses intermediary
licorice flavors produced by the Company's Chinese factory and purchases them
from other manufacturers for use as a raw material. These flavors are available
from producers primarily in the People's Republic of China and Central Asia in
quantities sufficient to meet the Company's current requirements and anticipated
requirements for the foreseeable future. During 2003, the Company had numerous
suppliers of intermediary licorice flavors of which one supplied over 20% of
total purchases.

         Other raw materials for the Company'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 the Company's offices located in Camden, New Jersey or Richmond,
Virginia, with technical support from the Company's research and development
department. Outside the U.S., the Company sells its products from its Camden,
New Jersey offices, through its Chinese and French subsidiaries, through
exclusive agents as well as independent distributors.

         The Company 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. The Company ships
products worldwide and provides technical assistance for product development for
both tobacco and non-tobacco applications.

         The Company sells licorice root residue, a by-product of the licorice
extract manufacturing process, as 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 2003, the Company's ten largest customers, eight of which are
manufacturers of tobacco products, accounted for approximately 64% of the
Company's net revenues and one customer, Altria Group Inc., accounted for
approximately 33% of the Company's 2003 net revenues. If Altria Group Inc. were
to stop purchasing licorice from the Company, it would have a significant
adverse effect on the financial results of the Company.

COMPETITION

         The Company'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
requires an experienced work force, careful manufacturing and rigorous quality
control. The Company's long-term relationships and knowledge of the licorice
root market are of great value in enabling it to consistently acquire quality
raw materials. Although the Company could face increased competition in the
future, the Company 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 the Company operates, particularly the
confectionery licorice market in Europe, are more competitive. Significant
competing producers of licorice flavors are government-owned and private
corporations in the People's Republic of China and Iran and a private
corporation based in Israel.

THE TOBACCO INDUSTRY

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

         During the period from 1999-2003, U.S. cigarette consumption declined
at an estimated average rate of 1.2% 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, continuing restrictions on smoking areas and sales tax
increases on cigarettes. Exports of cigarettes by U.S. manufacturers decreased
at an estimated average rate of 8.3% per year from 1999-2003. 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. The Company also sells certain of its products to offshore
manufacturers of American blend cigarettes.


                                       5
<PAGE>


         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 1999-2003 it has declined on average by
5.2% 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
on average 3.1% per year from 1999-2003 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, as well as in foreign countries. Together
with changing public attitudes toward tobacco products, a constant expansion of
tobacco regulations in the U.S. 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. Restrictive foreign tobacco legislation has been on the
rise in recent years as well, including restrictions on where tobacco may be
sold and used, warning labels and other graphic packaging images, product
constituent limitations and a general increase in taxes.

         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. In addition, the World Health Organization ("WHO") has identified
smoking as a significant world health risk. 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, federal and foreign taxes on cigarettes have resulted in lower tobacco
consumption, which is likely to continue in the future. The Company 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 the Company.

         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. As a result of
settlements in certain of this litigation, the cigarette companies have
significantly increased the wholesale price of cigarettes in order to recoup the
cost of the settlements. Since 1999, cigarette consumption in the U.S. has
decreased approximately 4.6% 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 the Company is unable to determine
whether additional price increases in the future will reduce tobacco consumption
or the effect of reduced consumption on the Company'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 the Company, 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 the Company.

         The tobacco industry, including cigarettes and smokeless tobacco, has
been subject to federal, state, local and foreign excise taxes for many years.
In recent years, federal, state, local and foreign governments have increased or
proposed increases to such taxes as a means of both raising revenue and
discouraging the consumption of tobacco products. The Company 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 the Company.

ENVIRONMENTAL MATTERS

         The Company is subject to all state and federal environmental laws.
During 2003, the Company replaced the oil-fired boilers in its Camden, New
Jersey facility with a new gas fired boiler in order to bring the Company into
compliance with current regulations. The cost was approximately $1.2 million,
and management believes that the Company's operations are in substantial
compliance with all applicable environmental laws. Although no other material
capital or operating expenditures relating to environmental controls or other
environmental matters are currently anticipated, there can be no assurance that
the Company will not incur costs in the future relating to environmental matters
that would have a material adverse effect on the Company'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 the Company at any time is generally not
significant. Domestic and foreign orders from tobacco and non-tobacco customers
are received with shipment requirements annually, 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,
2003.


                                       6
<PAGE>


EMPLOYEES

         At December 31, 2003, the Company had approximately 249 employees. The
Company has 109 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

         GENERAL

         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 in
1995, a subsidiary of Abex, M & F Worldwide, Pneumo Abex and another subsidiary
of M & F Worldwide entered into a transfer agreement (the "Transfer Agreement").
Under the Transfer Agreement, Pneumo Abex retained the assets and liabilities
relating to Aerospace, as well as certain contingent liabilities and the related
assets, including its historical insurance and indemnification arrangements.
Abex transferred substantially all of its other assets and liabilities to a
subsidiary of MCG. 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
categories of asbestos-related 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 these
categories of asbestos-related 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 kinds 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 ultimate
responsibility for all the remaining asbestos-related claims asserted against
Pneumo Abex 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
asbestos-related claims asserted against Pneumo Abex after August 1998 and not
indemnified by the Original Indemnitor. 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 Company confirmed that the
Indemnity Guarantor would fulfill the Second Indemnitor's indemnity obligations
to the extent that they are no longer being performed by the Second Indemnitor.
During the third quarter of 2002, the Indemnity Guarantor repaid the Company,
following an arbitration between the Company and the Indemnity Guarantor, $3.5
million that the Company had advanced for indemnified matters.

         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 each month for substantially all of its
monthly expenditures for asbestos-related claims. As of December 31, 2003, the
Company incurred or expected to incur approximately $525,000 of unindemnified
costs, as to which it either has received or expects to receive approximately
$393,000 in insurance reimbursements for matters pending or settled during 2003.
Management does not expect these unindemnified matters to have a material
adverse effect on the Company's financial position or results of operations, but
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 Pneumo Abex 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
are 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



                                       7
<PAGE>


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 environmental site 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 $100.0
million.

         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 one site not
part of 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, 2003 and 2002, respectively, in connection with the
Reimbursement Agreement.

         The Company has not recognized a 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 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. The Company retained in the Aerospace sale certain claims for
allegedly defective pricing made by the government with respect to certain of
these products. During 2003, the Company resolved one of those matters at a cost
of $0.4 million. In the remaining matter, the Company contests the allegations
made by the government and has been attempting to resolve the matter without
litigation.

         In addition, various other legal proceedings, claims and investigations
are pending against the Company, 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
these matters will not have a material adverse effect on the Company's financial
position or results of operations.

         FEDERAL-MOGUL BANKRUPTCY

         As noted above in "--General," the Second Indemnitor ceased performing,
upon filing its Chapter 11 petition, the indemnity and other obligations that it
owed to Pneumo Abex under the 1994 agreements entered into in connection with
the sale of Pneumo Abex's Friction Products Division ("the "1994 Sale
Agreements"). As a result, Pneumo Abex asserted claims for breach of such
indemnity and other obligations, and, in connection with such breaches, Pneumo
Abex asserted its rights of recoupment and setoff (the "Recoupment/Setoff
Claim"), recognized under bankruptcy law, against $5.6 million in insurance
reimbursements that came into Pneumo Abex's possession but that Pneumo Abex
would otherwise have been obliged to turn over to the Second Indemnitor under
the 1994 Sale Agreements had the Second Indemnitor continued to perform. Pending
the resolution of the Recoupment/Setoff Claim, Pneumo Abex recorded in accounts
payable an amount equal to the full value of the claim.

         During December 2003, Pneumo Abex reached an agreement with the Second
Indemnitor and certain other parties, subsequently confirmed by the bankruptcy
court, pursuant to which Pneumo Abex paid to the Second Indemnitor $3.0 million
in 2004. Of the remainder it retained, Pneumo Abex paid $0.7 million in 2004 to
a subsidiary of MCG in accordance with the Transfer Agreement to reimburse
expenses that the subsidiary incurred on behalf of Pneumo Abex while procuring
the insurance reimbursements. Pneumo Abex recorded a gain of $1.9 million in the
fourth quarter of 2003 for the amount it retained.



                                       8
<PAGE>


AVAILABILITY OF CERTAIN DOCUMENTS CONCERNING THE COMPANY

         The Company does not currently maintain a website. Current versions of
the following documents are available without charge upon request to the
Secretary, M & F Worldwide Corp., 35 East 62nd Street, New York, New York 10021:

         o        The Company's Code of Business Conduct, which includes its
                  Code of Financial Ethics for Senior Financial Officers.

         o        The charters for all standing committees of the Company's
                  Board of Directors, namely its Audit, Compensation and
                  Nominating/Governance Committees.

         o        The Company's Corporate Governance Guidelines.

         o        The policy that the Nominating/Governance Committee of the
                  Company's Board of Directors adopted concerning criteria for
                  the nomination of candidates to the Board of Directors.

        Paper copies of this annual report on Form 10-K, the Company's quarterly
reports on Form 10-Q, any current report on Form 8-K and any amendment to any of
these documents are similarly available.

ITEM 2.  PROPERTIES

         The Company's principal properties are as follows:

<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 non-  Owned                    65,000
                                            licorice products
Shaanxi, People's Republic of China         Licorice manufacturing and administration     Owned(c)                 28,300
</TABLE>


---------------------
(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.

ITEM 3.  LEGAL PROCEEDINGS

         Various legal proceedings, claims and investigations are pending
against the Company, including those relating to commercial transactions,
product liability, safety and health matters and other matters. The Company is
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. The Company retained in the Aerospace sale certain claims for
allegedly defective pricing made by the U.S. Government with respect to certain
of these products. During 2003, the Company resolved one of those matters at a
cost of $0.4 million. In the remaining matter, the Company contests the
allegations made by the U.S. Government and has been attempting to resolve the
matter 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.


                                       9
<PAGE>


         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 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 July 2002, during the trial of the Consolidated Action, the parties
reached the Settlement concerning the resolution and ultimate dismissal of the
Consolidated Action and the action challenging the Vannini settlement. Under the
terms of the Settlement, approved by the Chancery Court, Holdings (i) acquired
(a) the shares of Panavision common stock that the Company purchased in April
2001, (b) the shares of Panavision Series A Preferred Stock that the Company
acquired in December 2001, (c) the Notes that Pneumo Abex acquired in November
2001, and (d) the Las Palmas Note, and (ii) delivered to the Company $90.1
million in cash and all of the shares of Company's common stock and Series B
Preferred Stock that Holdings had acquired since April 2001. In addition, all
agreements entered into in connection with the Panavision Acquisition and the
December 2001 issuance of Series B Preferred Stock were terminated.

         In a separate agreement contemporaneous with the Settlement, the
Company's insurance carrier agreed to reimburse $2.0 million of the amount that
the Company paid in connection with the Vannini settlement, and certain
attorneys' fees and expenses awarded by the court in connection with the
Settlement.

         The Company incurred various legal and related costs in connection with
the defense of the shareholder lawsuits that were reimbursed by insurance. The
Company had unreimbursed legal and related expenses of $3.6 million, which the
Company included in discontinued operations for 2002 and 2001, net, in the
accompanying condensed consolidated statements of operations.

         During the third quarter of 2002, the Company's indirect wholly owned
French subsidiary (the "Indirect Subsidiary") received official notice from the
French tax administration that certain interest payments made on a note payable
to the Company would be disallowed as a deduction in determining French income
taxes for 1996, 1997 and 1998 and have assessed the Indirect Subsidiary
approximately 1.8 million Euros ($2.2 million as of December 31, 2003) for the
taxes, interest and penalties. The Indirect Subsidiary does not agree with the
tax authorities' position and is in the process of appealing the assessment. As
part of its appeal, the Indirect Subsidiary was required to obtain bank
guarantees in favor of the French tax administration in the amount of 1.4
million Euros ($1.8 million as of December 31, 2003). The Company believes that
the Indirect Subsidiary's position is correct under French tax regulations and
that the Indirect Subsidiary will prevail in any future negotiation or
litigation. In addition, the Indirect Subsidiary has taken an interest expense
deduction on its French tax return for each completed tax year subsequent to
1998, of which several years are currently under audit.

         See Item 1. (C) Narrative Description of Business; Tobacco Industry;
and Corporate Indemnification Matters.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No one sought a vote of security holders during the fourth quarter of
2003.



                                       10
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The M & F Worldwide Common 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 M & F Worldwide Common Stock on the NYSE based on published financial
sources.

                                               HIGH              LOW
                                               ----              ---
CALENDAR 2002
   First Quarter                              $5.10             $2.25
   Second Quarter                              4.70              2.80
   Third Quarter                               5.72              3.74
   Fourth Quarter                              5.64              4.53

CALENDAR 2003
   First Quarter                               7.55              5.50
   Second Quarter                              8.08              7.00
   Third Quarter                               9.73              7.49
   Fourth Quarter                             14.70              9.74



         The number of holders of record of the M & F Worldwide Common Stock as
of March 5, 2004 was 11,891.

         The Company has not paid any cash dividend on the M & F Worldwide
Common Stock to date and does not intend to pay regular cash dividends on the M
& F Worldwide Common Stock. The Company's Board of Directors will review the
Company's dividend policy from time to time in light of the Company's results of
operations and financial position and such other business considerations as the
Board of Directors considers relevant. Pneumo Abex's credit agreement limits its
ability to pay dividends to the Company, 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 M & F Worldwide Common 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 M & F
Worldwide Common Stock. The Company believes 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.

         During the fourth quarter of 2003, the Company did not repurchase any
of its equity securities.

         The Chief Executive Officer of the Company will certify to the NYSE in
March 2004 that he is not aware of any violation by the Company of the NYSE's
corporate governance listing standards.

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, 2003.

         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). On December 3, 2002, the Company divested itself of
Panavision pursuant to the Settlement. The Company presents the results of
Panavision's operations from April 19, 2001 until December 3, 2002 as
discontinued operations.

         The selected financial data are 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.


                                       11
<PAGE>



<TABLE>
<CAPTION>
                                                                                    YEAR ENDED DECEMBER 31,
                                                                        ------------------------------------------------
                                                                        2003       2002       2001       2000       1999
                                                                        ----       ----       ----       ----       ----
STATEMENT OF INCOME DATA:                                                   (in millions, except per share amounts)
<S>                                                                     <C>       <C>         <C>        <C>        <C>
Net revenues                                                            $95.7     $ 96.9      $98.4      $93.1      $97.3
Cost of revenues                                                         46.3       47.3       51.6       49.2       51.2
                                                                        -----     ------      -----      -----      -----
Gross profit                                                             49.4       49.6       46.8       43.9       46.1
Selling, general and administrative expenses                             17.3       14.5       15.6        8.9       11.6
Gain on pension reversion                                                 -          -        (11.1)       -          -
                                                                        -----     ------      -----      -----      -----
Operating income                                                         32.1       35.1       42.3       35.0       34.5
Interest income                                                           1.2        0.3        0.8        0.1        0.1
Interest expense                                                         (2.9)      (4.1)      (5.0)      (3.1)      (2.8)
Other income (expense), net                                               2.7       (0.5)      (1.0)       0.2        0.1
                                                                        -----     ------      -----      -----      -----
Income from continuing operations before income taxes                    33.1       30.8       37.1       32.2       31.9
Income taxes                                                            (10.5)     (12.2)     (18.7)     (13.1)     (12.8)
                                                                        -----     ------      -----      -----      -----
Income from continuing operations                                        22.6       18.6       18.4       19.1       19.1
Gain (loss) from operations of discontinued business,
  net of taxes of $0.6, $0.2, $8.4, respectively;
  (including gain on disposal of $17.6 in 2002)                           0.6        5.5      (12.3)       -          -
                                                                        -----     ------      -----      -----      -----
Net income                                                               23.2       24.1        6.1       19.1       19.1
Preferred stock dividends                                                 -         (0.3)      (0.2)       -         (1.5)
                                                                        -----     ------      -----      -----      -----
Net income available to shareholders                                    $23.2     $ 23.8       $5.9      $19.1      $17.6
                                                                        =====     ======       ====      =====      =====

Basic earnings (loss) per common share:
  Undistributed earnings from continuing operations                     $1.23     $ 0.71      $0.74      $0.96      $0.85
  Undistributed earnings (loss) from discontinued
    operations                                                           0.04       0.21      (0.50)       -          -
                                                                        -----     ------      -----      -----      -----
Total common stock                                                      $1.27     $ 0.92      $0.24      $0.96      $0.85
                                                                        =====     ======      =====      =====      =====

Diluted earnings (loss) per common share:
  Undistributed earnings from continuing operations                     $1.18     $ 0.71      $0.74      $0.96      $0.83
  Undistributed earnings (loss) from discontinued
    operations                                                           0.03       0.21      (0.50)       -          -
                                                                        -----     ------      -----      -----      -----
Total common stock                                                      $1.21     $ 0.92      $0.24      $0.96      $0.83
                                                                        =====     ======      =====      =====      =====

Basic and diluted earnings (loss) per preferred share:
  Distributed earnings                                                  $ -       $ 0.04      $0.05      $ -        $  -
  Undistributed earnings from continuing operations                       -         0.71       0.74        -           -
  Undistributed loss from discontinued operations                         -         0.21      (0.50)       -           -
                                                                        -----     ------      -----      -----      -----
Total preferred stock                                                   $ -       $ 0.96      $0.29      $ -        $  -
                                                                        =====     ======      =====      =====      =====
</TABLE>


                                       12
<PAGE>


<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                     ---------------------------------------------------------
                                                     2003        2002          2001          2000         1999
                                                     ----        ----          ----          ----         ----
                                                                           (in millions)
BALANCE SHEET DATA (A):
<S>                                                 <C>           <C>        <C>             <C>         <C>
Total assets (b)                                    $ 382.4       $ 373.2    $ 275.2         $ 298.8     $ 311.4
Long- term debt including current portion and
  short-term borrowings (c)                            34.6          60.4       84.0            29.4        49.0

Participating preferred stock (d)                      -             -          41.7            -           -
Stockholders' equity                                  304.7         274.1      295.9           245.7       236.9
</TABLE>


-----------------
(a)  The Company reclassified certain amounts in previously issued financial
     statements to conform to the 2003 presentation.

(b)  Excludes the assets of discontinued operations at December 31, 2001 of
     $636.9 million.

(c)  Excludes long-term debt of discontinued operations at December 31, 2001 of
     $472.3 million.

(d)  During 2001, the Company issued to PX Holding 6,182,153 shares of Series B
     Preferred Stock valued at $31.7 million in connection with the Panavision
     Acquisition and 666,667 shares of Series B Preferred Stock in exchange for
     $10.0 million. PX Holding returned the Series B Preferred Stock in 2002 as
     part of the Panavision divestiture.

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, which is the world's largest producer of licorice extract,
produces a variety of licorice flavors from licorice root, intermediary licorice
flavors produced by others and certain other ingredients at its facilities in
the United States, France and the People's Republic of China. Over 70% of the
Company's licorice sales are to the worldwide tobacco industry for use as
flavoring and moistening agents in the manufacture of American blend cigarettes
and other tobacco products. Over the last several years, the rate of consumption
of tobacco products has declined in the United States. Despite this trend, the
Company has experienced stable sales volume in the United States tobacco
industry principally because its customers have emphasized the sale of their
premium quality branded products in which licorice is a key ingredient. The
Company's stable sales to the international tobacco industry have been aided by
stable to slightly growing consumption of tobacco products in that region.
Although the Company's licorice sales to its confectionary customers have
experienced some decline in recent years, licorice sales to food and
pharmaceutical customers, where the product is used as a flavoring or masking
agent, have experienced some growth and added to the Company's overall sales
stability for its licorice products. Non-licorice sales have decreased due to
the Company's decision to discontinue selling certain of these products.

         During the period April 19, 2001 to December 3, 2002, the Company also
operated a second business segment through its interest in Panavision. See
Related Party Transactions-The Panavision Acquisition/Disposition, below. Due to
the disposition of that segment as part of the Settlement, the Company now
reports the Panavision segment as a discontinued business.

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The bases of management's discussion and analysis of the Company's
financial condition and results of operation are the Company's Consolidated
Financial Statements, which it prepares in accordance with accounting principles
generally accepted in the United States. The Company reviews its accounting
policies on a regular basis. The Company makes estimates and judgments as part
of its financial reporting that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities. On an ongoing basis, the Company evaluates its estimates,
including those related to accounts receivable, investments, intangible assets,
income taxes, contingencies and litigation. The Company bases its estimates on
historical experience and on various other assumptions that it believes
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 the assumed outcomes. The Company
believes the following critical accounting policies affect its more significant
judgments and estimates.

         ALLOWANCE FOR DOUBTFUL ACCOUNTS - The Company's estimate of losses
         relating to its customers' inability to make required payments is based
         on a review of historical payments of amounts due on trade receivables
         as well as purchasing trends of customers and a review of the economic
         conditions in their industries. The Company attempts to limit its
         exposure by



                                       13
<PAGE>


         investigating the credit history and reviewing the financial status of
         any potential customer. If any of these factors upon which these
         estimates are based were to significantly change, additional allowances
         may be necessary.

         INCOME TAXES - The Company estimates actual current tax liability
         together with 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. The Company must assess the likelihood that it
         will recover deferred tax assets from future taxable income and, to the
         extent it believes that recovery is not likely, establish a valuation
         allowance. At December 31, 2002, the Company established a $5.8 million
         valuation allowance against its deferred tax assets. The valuation
         allowance at December 31, 2003, was reduced to $4.1 million. To the
         extent it establishes a valuation allowance or increases this allowance
         in a period, it must include and expense the allowance within the tax
         provision in the consolidated statement of income. Significant
         management judgment is required in determining the provision for income
         taxes, deferred tax assets and liabilities and any valuation allowance
         recorded against net deferred tax assets.

         LONG-LIVED ASSETS - The Company assesses the impairment of property,
         plant and equipment and investments in joint ventures whenever events
         or changes in circumstances indicate that the carrying value may not be
         recoverable. Some factors the Company considers important that 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 use of these assets or the
              strategy for the Company's overall business; and

         o    Significant negative industry or economic trends.

         When the Company determines that the carrying value of long-lived
         assets may not be recoverable based upon the existence of one or more
         indicators of impairment, it measures the impairment based on a
         projected discounted cash flow method using a discount rate determined
         by management to be commensurate with the risk inherent in the
         Company's current business model.

         GOODWILL AND INTANGIBLE ASSETS - Upon adoption of Statement of
         Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
         Intangible Assets" in 2002, the Company discontinued amortization of
         goodwill resulting from business acquisitions. A reassessment of the
         useful life of other intangible assets, consisting of product
         formulations, determined the useful life of these formulations to be
         indefinite; therefore, the Company also discontinued amortization of
         the formulations in 2002.

         The Company performs impairment tests on goodwill and product
         formulations annually or more frequently if events or changes in
         circumstances indicate a possible impairment. The Company has elected
         to test these assets for impairment in the fourth quarter of each year.

         The goodwill impairment test is a two-step process, which requires
         management to make judgments in determining what assumptions to use in
         the calculation. The first step of the process consists of estimating
         the fair value of the Company based on a discounted cash flow model
         using revenue and profit forecasts and comparing the estimated fair
         value with the carrying value, which includes the goodwill. If the
         estimated fair value is less than the carrying value, a second step is
         performed to compute the amount of the impairment by determining an
         "implied fair value" of goodwill. The determination of the Company's
         "implied fair value" of goodwill requires the Company to allocate the
         estimated fair value to the assets and liabilities of the Company. Any
         unallocated fair value represents the "implied fair value" of goodwill,
         which is compared to the corresponding carrying value.

         The Company measures impairment of the product formulations based on a
         projected discounted cash flow. The Company also reevaluates the useful
         life of the product formulations annually to determine whether events
         and circumstances continue to support an indefinite useful life.

         CONTINGENCIES AND INDEMNIFICATION AGREEMENTS - The Company records the
         estimated impacts of various conditions, situations or circumstances
         involving uncertain outcomes. These events are "contingencies," and the
         accounting for such events follows SFAS No. 5, "Accounting for
         Contingencies."

         The accrual of a contingency involves considerable judgment by
         management. The Company uses internal expertise and outside experts
         (such as lawyers and tax specialists), as necessary, to help estimate
         the probability that the Company has incurred a loss and the amount (or
         range) of the loss. When evaluating the need for an accrual or a change
         in an existing accrual, the Company considers whether it is reasonably
         probable to estimate an outcome for the contingency based on its
         experience, any experience of others facing similar contingencies of
         which the Company is aware and the particulars of the circumstances
         creating the contingency. The Company has not recognized any liability
         in its financial statements for matters



                                       14
<PAGE>


         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 related to those liabilities, the Company believes
         that the likelihood of failing to obtain reimbursement of amounts
         covered by indemnification is remote. See Item 1. Business--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.

         PENSIONS - The Company sponsors defined benefit and defined
         contribution pension plans, which cover certain current and former
         employees of the Company who meet eligibility requirements. The
         Company's actuarial consultants use several statistical and other
         factors that attempt to estimate future events to calculate the expense
         and liability related to the plans. These factors include assumptions
         about the discount rate, expected return on plan assets and rate of
         future compensation increases as determined by the Company, within
         certain guidelines. In addition, the Company's actuarial consultants
         also use subjective factors such as withdrawal and mortality rates to
         estimate these factors. The actuarial assumptions used by the Company
         may differ materially from actual results due to changing market and
         economic conditions, higher or lower withdrawal rates or longer or
         shorter life spans of participants, among other things. Differences
         from these assumptions may result in a significant difference with the
         amount of pension expense/liability that the Company recorded.

CONSOLIDATED OPERATING RESULTS

      YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

         A significant portion of the Company's sales are to the tobacco
industry worldwide. Over the last several years, the rate of consumption of
tobacco products has declined in the United States, although worldwide
consumption of tobacco products has remained stable or grown slightly. Net
revenues decreased by $1.2 million or 1.2% to $95.7 million in 2003 from $96.9
million in 2002. The Company's domestic revenues decreased by $2.2 million in
the 2003 period as compared to the 2002 period. Increases in domestic revenues
of $1.0 million to the tobacco industry worldwide were more than offset by lower
revenues of $1.1 million from the Company's confectionary customers and $2.1
million in lower revenues from the Company's United States non-licorice,
nutraceutical and spice customers. The decline in confectionary revenues was a
result of lower selling prices in the mix of products sold to customers during
2003. The decrease in United States non-licorice sales resulted from the
Company's decision to discontinue selling certain of these products. The
Company's foreign sales increased by $1.0 million due to a $2.3 million foreign
exchange translation effect on its Euro sales offset in part by lower average
selling prices.

         Cost of revenues was $46.3 million in the 2003 period and $47.3 million
in 2002. The decrease of $1.0 million was due primarily to the lower revenues.
As a percentage of revenue, cost of revenues was 48.4% in 2003 and 48.8% in
2002.

         Gross profit was $49.4 million for the 2003 period and $49.6 million
for the 2002 period, a decrease of $0.2 million, which mainly reflects the
decline in sales.

         Selling, general and administrative expenses were $17.3 million in the
2003 period and $14.5 million in the 2002 period, an increase of $2.8 million.
The increase was due primarily to higher insurance costs, higher legal fees and
lower pension income from pension plans in the 2003 period as compared to the
2002 period.

         Operating income was $32.1 million for the 2003 period and $35.1
million for the 2002 period. The decrease of $3.0 million was the result of
lower domestic operating income of $4.3 million and lower operating income at
the Company's French subsidiary of $1.1 million partially offset by lower
corporate expenses of $2.4 million.

         Interest income was $1.2 million in the 2003 period and $0.3 million in
the 2002 period. The increase was primarily due to interest income on the cash
invested with the proceeds of the Settlement in December 2002.

         Interest expense was $2.9 million in the 2003 period and $4.1 million
in the 2002 period. The decrease was due to lower outstanding debt in the 2003
period.

         Other income (expense), net was $2.7 million of other income, net in
the 2003 period compared to $0.5 million of other expense, net in the 2002
period. The increase results from the reduction of two liabilities associated
with the resolution of two separate Corporate Indemnification matters during
2003. Other income of $0.9 million results from the settlement of certain claims
made by the U.S. Government for allegedly defective pricing with respect to
product sales made by the former Aerospace business of the Company. Other income
of $1.9 million represents the Company's share of the amount obtained as part of
the resolution of the Recoupment/Setoff Claim.


                                       15
<PAGE>


         The provision for income taxes as a percentage of income from
continuing operations was 31.7% in the 2003 period and 39.6% in the 2002 period.
The decrease was due to a lower state tax rate of $0.4 million and the reversal
of reserves of $1.3 million for certain prior year issues due to the resolution
of uncertainties in 2003.

         The Company recorded a gain from operations of the discontinued
business, net of taxes of $0.6 million in 2003 and $5.5 million in 2002. The
gain in 2003 results from the finalization of the Company's 2002 tax returns and
the tax attributes that the discontinued business used while it was included in
the Company's consolidated tax return. The gain in 2002 results from losses
attributable to the operations of the discontinued business offset by the gain
on the disposal of the business of $17.6 million in December 2002.

      YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

         Net revenues decreased by $1.5 million or 1.5% to $96.9 million in 2002
from $98.4 million in 2001. The Company makes a significant portion of its sales
to the tobacco industry worldwide. Over the last several years, the rate of
consumption of tobacco products has declined in the United States, although
worldwide consumption for tobacco products has remained stable or grown
slightly. The Company's sales in 2002 to the tobacco industry worldwide
increased over 2001 by approximately $1.8 million. This increase in sales was
offset by lower sales to the Company's European confectionary customers of
approximately $1.5 million and lower sales to the Company's United States
non-licorice, nutraceutical and spice customers of approximately $1.8 million.
The decline in confectionary sales was a result of pricing decisions to meet
minimum profit expectations per unit of volume that resulted in higher prices in
2002 for certain products and an approximately 30% decline in volume. The
decline in United States non-licorice sales resulted from the Company's decision
to discontinue selling certain of these products

         Cost of revenues was $47.3 million in 2002 and $51.6 million in 2001, a
decrease of $4.3 million due to the lower sales and lower material costs. As a
percentage of sales, cost of revenues were 48.8% in 2002 and 52.4% in 2001. The
lower percentage resulted from the lower costs and a change in the mix of
products sold.

         The gross profit was $49.6 million in 2002 and $46.8 million in 2001,
an increase of $2.8 million or 6.0%. As a percentage of sales, the 2002 gross
profit was 51.2% as compared to 47.6% in 2001.

         Selling, general and administrative expenses were $14.5 million in 2002
and $15.6 million in 2001. The decrease of $1.1 million was primarily
attributable to $4.2 million of amortization of goodwill and indefinite lived
intangible assets in 2001 partially offset by lower pension income of $1.3
million, higher executive compensation and various other professional fees.

         In February 2001, the Company terminated its overfunded pension plan
resulting in a gain of $11.1 million.

         Operating income was $35.1 million in the 2002 period and $42.3 million
for the 2001 period. The decrease of $7.2 million was the result of the gain on
the pension reversion of $11.1 million in 2001, lower operating income of $0.6
million at the Company's French subsidiary and higher corporate expenses of $1.0
million partially offset by increased domestic operating income of $5.5 million
in the 2002 period.

         Interest income was $0.3 million in the 2002 period and $0.8 million in
the 2001 period. The decrease was primarily due to lower average cash balances
available for investment during most of 2002.

         Interest expense was $4.1 million in the 2002 period and $5.0 million
in the 2001 period. The decrease was due to lower average debt outstanding and
lower interest rates.

         Other expense, net of $0.5 million in 2002 consisted mainly of a
foreign exchange loss of $0.4 million resulting from the weakening of the dollar
against the Euro. Other expense, net in 2001 of $1.0 million results mainly from
a write-down of the Company's investment in a Chinese joint venture of $0.5
million and a pre-tax loss of $0.4 million resulting from a write-off of
deferred financing costs related to the Company's old credit agreement
refinanced in 2001.

         The provision for income taxes in 2002 was $12.2 million and $18.7
million in 2001. The 2002 effective rate was 39.6% as compared to 50.4% in 2001.
The 2001 effective rate was higher than 2002 primarily due to the
non-deductibility of an excise tax imposed on the pension reversion gain.

         The Company recorded a gain (loss) from operations of discontinued
business, net of taxes, of $5.5 million and ($12.3) million in 2002 and 2001,
respectively. These losses were attributable to the operations of Panavision
from April 19, 2001 to December 3, 2002 and the gain on disposal of Panavision
of $17.6 million in 2002.



                                       16
<PAGE>


         The amounts of revenue and pretax loss reported in discontinued
operations related to Panavision for 2002 and 2001 were as follows (dollars in
millions):


                                    YEARS ENDED DECEMBER 31,
                                    ------------------------
                                        2002         2001
                                        ----         ----
             Revenue                   $175.9       $125.0
             Pre-tax loss              $ 16.6       $ 20.8


RELATED PARTY TRANSACTIONS

         THE PANAVISION ACQUISITION/DISPOSITION

         On April 19, 2001, the Company purchased an 83% interest in Panavision
from PX Holding for consideration that included $80.0 million in cash, 1.5
million shares of M & F Worldwide Common Stock and approximately 6.2 million
shares of M & F Worldwide Series B Preferred Stock. Thereafter, the Company
purchased $11.4 million principal amount of Notes and acquired the Las Palmas
Note, as disclosed in Note 2 to the Company's Consolidated Financial Statements
at the end of this report. Following its acquisition of these interests in
Panavision, the Company had two operating segments: its Mafco Worldwide
flavorings business and its Panavision film equipment business. These two
segments operated independently of one another. The Company hoped that its
acquisition of these interests in Panavision would allow it to expand beyond a
single line of business that is dependent on the tobacco industry. Nevertheless,
on December 3, 2002, under the terms of the Settlement the Company sold to Mafco
Holdings all of its Panavision shares, its Notes and the Las Palmas Note in
exchange for, among other things, $90.1 million in cash, 1.5 million shares of
the Company's Common Stock and all of the Company's outstanding Series B
Preferred Stock. The consummation of the Settlement essentially ended the
Company's association with Panavision. Because the Company's two operating
segments did not interact, the disposition had no effect on the business of the
remaining Mafco Worldwide segment. Due to the cash received in the Settlement,
the Company at December 31, 2003 and 2002 had significant liquidity and capital
resources. The Company is again concentrated in a single line of business and
dependent on the tobacco products industry.

         At December 31, 2003, Holdings' indirect beneficial ownership of M & F
Worldwide represented 38.3% of the outstanding M & F Worldwide Common Stock.

         PANAVISION/COMPANY TAX SHARING AGREEMENT

         For the period from April 19, 2001 through December 3, 2002,
Panavision, for federal income tax purposes, was part of the affiliated group of
which the Company is the common parent (the "M & F Worldwide Group"), and the
Company included Panavision's federal taxable income in such group's
consolidated tax return. The Company also included Panavision in certain of its
state and local tax returns for that period. As of April 19, 2001, Panavision,
certain of its subsidiaries and the Company entered into a tax sharing agreement
(the "Panavision/Company Tax Sharing Agreement"), pursuant to which the Company
agreed to indemnify Panavision against federal, state or local income tax
liabilities of the M & F Worldwide Group for taxable periods beginning on or
after April 19, 2001 during which Panavision or a subsidiary of Panavision was a
member of such group. Pursuant to the Panavision/Company Tax Sharing Agreement,
for all taxable periods beginning on or after April 19, 2001 and ending December
3, 2002, Panavision was obligated to pay to the Company amounts equal to the
taxes that Panavision would otherwise have had to pay if it were to have filed
separate federal, state or local income tax returns (including any amount
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 was not
entitled to carry back any loss to taxable periods ending prior to April 19,
2001. The Panavision/Company Tax Sharing Agreement required no payment by
Panavision as it had sufficient net operating loss carryforwards to offset its
taxable income. The Panavision/Company Tax Sharing Agreement continues in effect
after December 3, 2002 only as to matters such as audit adjustments and
indemnities.

         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 another subsidiary of the Company entered
into the Transfer Agreement. Under the Transfer Agreement, Pneumo Abex retained
the assets and liabilities relating to Aerospace, as well as certain contingent
liabilities and the related assets, including its historical insurance and
indemnification arrangements. Abex transferred substantially all of its other
assets and liabilities to a subsidiary of MCG. The Transfer Agreement provides
for appropriate transfer, indemnification and tax sharing arrangements, in a
manner consistent with applicable law and existing contractual arrangements.


                                       17
<PAGE>


         The Transfer Agreement requires such subsidiary of MCG to undertake
certain administrative and funding obligations with respect to certain
categories of asbestos-related 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 these
categories of asbestos-related 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 kinds 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 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 it sells. In subsequent amendments to the Company/MCG Registration Rights
Agreement, the Company has agreed to treat shares of common stock acquired from
time to time by MCG as "Registrable Shares."

         AFFILIATED PAYMENTS

         During fiscal 2003, 2002, and 2001, three executive officers of the
Company were executives of Holdings. Such executive officers were not
compensated by the Company. In 2003, the Company paid to Holdings the value of
the services provided by such officers to the Company in the amount of $1.5
million and charged that amount to compensation expense. In 2002 and 2001,
because Holdings did not require payment of this amount, the value of the
services of $1.5 million per year is reflected in the accompanying Consolidated
Financial Statements as compensation expense and a corresponding increase to
additional paid-in-capital in accordance with Securities and Exchange Commission
Staff Accounting Bulletin 79, "Accounting for Expenses or Liabilities Paid by
Principal Stockholder(s)." None of the executive officers received any payment
from the Company or Holdings in connection with such compensation expense.

         In October 2003, the Company and Holdings executed a new Management
Services Agreement, in which Holdings provides the services of the three
executive officers to the Company in exchange for a management service fee of
$1.5 million annually. The Agreement expires on December 31, 2005.

         Included in accounts receivable, net in the consolidated balance sheet
at December 31, 2002 is $3.3 million due from Holdings, which Holdings repaid in
January 2003.

         The Company participates in Holdings' directors and officers insurance
program, which covers the Company as well as Holdings and its other affiliates.
The limits of coverage are available on aggregate losses to any or all of the
participating companies and their respective directors and officers. The Company
reimburses Holdings for its allocable portion of the premiums for such coverage,
which the Company believes is more favorable than the premiums the Company could
secure were it to secure its own coverage. At December 31, 2003, the Company has
recorded prepaid expenses, other assets, accrued liabilities and other
liabilities of $1.5 million, $6.0 million, $2.7 million and $2.8 million
relating to the financing of the directors and officers insurance program. At
December 31, 2002, the Company had recorded prepaid expenses, other assets,
accrued liabilities and other liabilities of $1.7 million, $6.7 million, $3.0
million and $5.5 million relating to the financing of the directors and officers
insurance program.

LIQUIDITY AND CAPITAL RESOURCES

         Cash provided by operating activities was $35.5 million, $37.3 million
and $49.7 million for the years ended December 31, 2003, 2002 and 2001,
respectively. The decrease in cash provided of $1.8 million between the 2003
period and the 2002 period resulted mainly from the changes in working capital
from year to year partially offset by the increase in income from continuing
operations. The decrease in cash provided of $12.4 million between the 2002 and
2001 period primarily reflects the net cash retained



                                       18
<PAGE>


in connection with the termination of the Mafco Worldwide Corporation Defined
Benefit Plan in 2001 partially offset by the net changes in non-cash working
capital.

         Cash used in investing activities in 2003 was for capital expenditures
of $2.1 million, of which approximately $1.2 million was for the replacement of
the Company's oil-fired boilers in its Camden, New Jersey facility with a new
gas-fired boiler. The Company is not planning any significant capital
expenditure for 2004. Cash provided by investing activities of $89.3 million in
2002 reflect the proceeds from the Settlement partially offset by capital
expenditures of $0.8 million. Cash used by investing activities in 2001 were for
the Panavision Acquisition, the acquisition of EFILM, the purchase of Notes and
capital expenditures of $1.1 million.

         Cash used in financing activities in 2003 and 2002 primarily reflects
the repayment of debt under the Company's credit agreement. Cash provided by
financing activities in 2001 primarily reflects borrowings under the Company's
credit agreement to purchase Panavision partially offset by repayments under the
Company's credit agreement.

         The Company has certain cash obligations and other commercial
commitments, which will adversely affect its short-term liquidity. At December
31, 2003, such obligations and commitments were as follows:


<TABLE>
<CAPTION>
                                                                  PAYMENTS DUE BY PERIOD
                                             ---------------------------------------------------------------
                                                             LESS
                                                            THAN 1         1-3                       AFTER 5
Contractual Obligations                       TOTAL          YEAR         YEARS       4-5 YEARS       YEARS
-----------------------                      ------        --------      ------       ---------      -------
                                                                      (in millions)
<S>                                          <C>           <C>           <C>           <C>           <C>
Long-Term Debt                               $ 34.6        $ 19.4        $ 15.2        $ --           $ --
Raw Material Purchase Obligations               9.6           9.6          --            --             --
Insurance Premiums                              5.5           2.7           2.8          --             --
Management Fees                                 3.0           1.5           1.5          --             --
Operating Leases                                0.3           0.2           0.1          --             --
                                             ------        ------        ------        ----           ----
Total Contractual Cash Commitments           $ 53.0        $ 33.4        $ 19.6        $ --           $ --
                                             ======        ======        ======        ====           ====
</TABLE>

         The Company currently expects to contribute approximately $335,000 to
its pension plans in 2004 based on current legal requirements. Proposed
legislation, expected to be passed in 2004, would result in lower pension
contributions in 2004.

         As of December 31, 2003, debt outstanding totaled $34.6 million which
was outstanding under the Pneumo Abex Amended Credit Agreement. Current
maturities under the Pneumo Abex Amended Credit Agreement totaled $19.4 million
at December 31, 2003. The Company intends to repay the debt outstanding during
2004 and 2005 with available funds.

         On April 19, 2001 (the "Closing Date"), the Company entered into an
Amended and Restated Credit Agreement (the "Amended Credit Agreement") with a
group of banks pursuant to which the Company could borrow up to $105.0 million.
The Amended Credit Agreement included 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 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. 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). The amount of
excess cash flow payment included in current maturities was $4.3 million and
$8.7 million at December 31, 2003 and 2002, respectively. The 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.

         In connection with the Settlement, Pneumo Abex amended the Amended
Credit Agreement effective December 3, 2002, so that the lenders would: (a)
release all liens in their favor on the Panavision shares held by the Company
and the Notes held by Pneumo Abex and (b) release PVI Acquisition Corp., a
wholly owned subsidiary of the Company, from all of its obligations and
liabilities under a guarantee and collateral agreement to the Amended Credit
Agreement. In exchange, the parties agreed to: (a) an increase in the borrowing
margin on ABR Loans and Eurodollar Loans of 0.5% (3.0% on ABR Loans and 4.0% on
Eurodollar Loans at December 31, 2003 and 2002), (b) a mandatory prepayment of
$4.4 million, (c) a reduction in the revolving commitments by $5.0 million and
(d) an amendment fee of approximately $0.3 million. At December 31, 2003 and
2002, $4.7 and $4.6 million of the revolving loan facility was reserved for
lender guarantees on outstanding letters of credit, respectively. The average
interest rate was 5.57% and 5.41% for the years ended December 31, 2003 and
2002, respectively. 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,



                                       19
<PAGE>


operating cash flow maintenance and limitations on the sale of assets. The
Company had $5.3 million of available borrowings under the revolving loan
facility at December 31, 2003.

         Although there can be no assurance, the Company believes that its
existing working capital, together with the borrowings under its credit
agreement and anticipated cash flow from operating activities, will be
sufficient to meet the Company's expected operating, capital spending and debt
service requirements for the foreseeable future.

         M & F Worldwide is a holding company whose only material assets are its
ownership interest in its subsidiaries and approximately $90.0 million in cash
and cash equivalents, most of which was received in connection with the
Settlement. The Company is considering various alternatives for the application
of its cash and cash equivalents on hand. 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, other than cash and cash equivalents on hand, 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. Under the Amended Credit Agreement, Pneumo Abex may
not: (a) pay a dividend on, make a payment on account of the purchase,
redemption or retirement of, or make any other distribution on any share of any
class of its capital stock; (b) loan or advance funds to M & F Worldwide except
for expenses necessary to maintain M & F Worldwide's corporate existence and
other out-of-pocket expenses in the ordinary course of business resulting from M
& F Worldwide's status as a public company; and (c) pay any management or
administrative fee to M & F Worldwide or pay a salary, bonus or other form of
compensation, other than in the ordinary course of business, to any person who
is a significant stockholder or executive officer of M & F Worldwide.

IMPACT OF INFLATION

         The Company presents its results of operations and financial condition
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.

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, 2003, the Company had available net operating loss
carryforwards of approximately $32.1 million, which expire in years 2008 through
2012.

         During 2002, the Indirect Subsidiary received official notice from the
French tax administration that certain interest payments made on a note payable
to the Company would be disallowed as a deduction in determining French income
taxes for 1996, 1997 and 1998 and have assessed the Indirect Subsidiary
approximately 1.8 million Euros ($2.2 million as of December 31, 2003) for the
taxes, interest and penalties. The Indirect Subsidiary does not agree with the
tax authorities' position and is in the process of appealing the assessment. As
part of its appeal, the Indirect Subsidiary was required to obtain bank
guarantees in favor of the French tax administration in the amount of 1.4
million Euros ($1.8 million as of December 31, 2003). The Company believes that
the Indirect Subsidiary's position is correct under French tax regulations and
that the Indirect Subsidiary will prevail in any future negotiation or
litigation. In addition, the Indirect Subsidiary has taken an interest expense
deduction on its French tax return for each completed tax year subsequent to
1998, of which several years are currently under audit.

         See Related Party Transactions - Panavision/Company Tax Sharing
Agreement.

OTHER LIQUIDITY RISKS

         LICORICE RAW MATERIAL SUPPLY

         In addition to the liquidity risks noted above, the Company may
encounter liquidity risks arising from its supply of licorice raw material. The
Company tries to maintain a sufficient licorice raw material inventory and open
purchase contracts to meet normal production needs for three years. At December
31, 2003, the Company had on hand a supply of licorice raw material approaching
three years. Licorice root has an indefinite retention period as long as it is
kept dry, and therefore has experienced little, if any, material spoilage.
Although the Company has been able to obtain licorice raw materials without
interruption since World War II, since there has been periodic instability in
the areas of the world where licorice raw materials are obtained, the Company
may in the future experience a short supply of licorice raw materials due to
these or other instabilities. If the Company is unable to obtain licorice raw
materials, or is unable to obtain them in a cost-effective manner, the Company's
business will be severely hampered and the Company will experience severe
liquidity difficulties.



                                       20
<PAGE>

         CUSTOMERS

         In 2003, the Company's ten largest customers, eight of which are
manufacturers of tobacco products, accounted for approximately 64% of the
Company's net revenues and one customer, Altria Group Inc. accounted for
approximately 35% of the Company's 2003 net revenues. If Altria Group Inc. were
to stop purchasing licorice from the Company, it would have a significant
adverse effect on the financial results of the Company, 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
ultimate responsibility for all the remaining asbestos-related claims asserted
against Pneumo Abex 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 asbestos-related claims asserted against Pneumo Abex after
August 1998 and not indemnified by the Original Indemnitor. 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 Company confirmed that the Indemnity Guarantor would fulfill the Second
Indemnitor's indemnity obligations to the extent that they are no longer being
performed by the Second Indemnitor. During the third quarter of 2002, the
Indemnity Guarantor repaid the Company, following an arbitration between the
Company and the Indemnity Guarantor, $3.5 million that the Company had advanced
for indemnified matters.

         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 each month for substantially all of its
monthly expenditures for asbestos-related claims. As of December 31, 2003, the
Company incurred or expected to incur approximately $525,000 of unindemnified
costs, as to which it either has received or expects to receive approximately
$393,000 in insurance reimbursements. Management does not expect these
unindemnified matters to have a material adverse effect on the Company's
financial position or results of operations, but 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 Pneumo Abex 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
are 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 environmental site 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 $100.0
million.

         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
one 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, 2003 and 2002, 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



                                       21
<PAGE>


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 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. During 2003, Pneumo Abex resolved
one of these matters at a cost of $0.4 million. In the remaining matter, Pneumo
Abex contests the allegations made by the government and has been attempting to
resolve the matter without litigation.

         Various legal proceedings, claims and investigations are pending
against the Company, including those relating to commercial transactions,
product liability, 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. The Company believes that the outcome of these
matters 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, 2003,
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 - Critical Accounting Policies."

         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) economic, climatic or
political conditions in countries in which the Company sources licorice root;
(b) economic, climatic or political conditions that have an impact on the
worldwide tobacco industry or on the consumption of tobacco products in which
licorice flavorings are used; (c) 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
flavorings are used; (d) 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; (e) any inability to obtain
indemnification for any significant group of asbestos-related claims pending
against the Company; (f) lower than expected cash flow from operations; (g)
significant increases in interest rates; and (h) unfavorable foreign currency
fluctuations. The Company assumes no responsibility to update the
forward-looking statements contained in this Annual Report on Form 10-K.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         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, 2003 and 2002, the Company's net foreign currency
market exposures of $0.4 million and $0.6 million, respectively, are primarily
the Euro. Most of the Company's export sales and purchases of licorice raw
materials are made in U.S. dollars. The Company's French subsidiary sells in
several foreign currencies as well as the U.S. dollar and purchases raw
materials principally in U.S. dollars. Since the exposures are not material, the
Company does not generally hedge against foreign currency fluctuations. In
addition, management does not foresee nor expect any significant changes in
foreign currency exposure in the near future.

         A 10% appreciation in foreign currency exchange rates from the
prevailing market rates would result in a negligible increase to the related net
unrealized gain for December 31, 2003 and a $0.1 million increase for December
31, 2002. Conversely, a 10% depreciation in these currencies from the prevailing
market rates would result in a negligible decrease to the related net unrealized
gain for December 31, 2003 and a $0.1 million decrease for December 31, 2002.

         The Company is exposed to changes in interest rates on its variable
rate debt. A hypothetical 10% increase in the interest rates applicable to 2003
and 2002 would have resulted in an increase to interest expense of approximately
$0.3 million and $0.4



                                       22
<PAGE>


million, respectively. Conversely, a hypothetical 10% decrease in the interest
rates applicable to 2003 and 2002 would have decreased interest expense by
approximately $0.3 million and $0.4 million, respectively. At December 31, 2003,
the Company believes that the carrying value of its amounts payable under the
Pneumo Abex Amended Credit Agreement approximate fair value based upon current
yields for debt issues of similar quality and terms.

         The Company only has floating rate debt at the present time. Neither
the Company nor its subsidiaries had any interest rate swap agreements in effect
at December 31, 2003. Management does not foresee nor expect any significant
changes in its exposure to interest rate fluctuations or in how such exposure is
managed.

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
Schedules 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.

ITEM 9A.  CONTROLS AND PROCEDURES

         The Company's management, with the participation of the Company's Chief
Executive Officer and the Chief Financial Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures as of December
31, 2003. Based on that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of December 31, 2003. There were no material
changes in the Company's internal control over financial reporting during the
fourth quarter of 2003.




                                       23
<PAGE>


                                    PART III

         The Company will provide the information otherwise set forth in Part
III, Items 10 through 14, of Form 10-K in its definitive proxy statement for its
2004 annual meeting of stockholders, which is to be filed pursuant to Regulation
14A not later than April 30, 2004.


















                                       24
<PAGE>


                                     PART IV

ITEM 15.   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 regulations of the Securities &
Exchange Commission 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).

        2.2              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).

        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              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).

        3.3              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).

        3.4              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).

        4.1              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).

        4.2              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).

        4.3              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).

        4.4              Registration Rights Letter Agreement, dated December
                         21, 2001, by and between PX Holding Corporation and M &
                         F Worldwide Corp. (incorporated by reference to Exhibit
                         10.27 to M & F Worldwide Corp.'s 2001 Form 10-K).

        4.5              Registration Rights Letter Agreement, dated December
                         21, 2001, by and between Panavision Inc. and M & F
                         Worldwide Corp. (incorporated by reference to Exhibit
                         10.28 to M & F Worldwide Corp.'s 2001 Form 10-K).

        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).

                                       25
<PAGE>

        10.2             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).

        10.3             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).

        10.4             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).

        10.5             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).

        10.6             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).

        10.7             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).

        10.8             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).

        10.9             First Amendment, dated as of April 1, 1999, to the
                         Credit Agreement dated as of November 17, 1997
                         (incorporated by reference to Exhibit 10.11 to M & F
                         Worldwide Corp.'s Form 10-K for 1999).

        10.10            Second Amendment, dated as of November 23, 1999, to the
                         Credit Agreement dated as of November 17, 1997
                         (incorporated by reference to Exhibit 10.12 to M & F
                         Worldwide Corp.'s Form 10-K for 1999).

        10.11            Amendment Number Three, dated as of April 24, 2000, to
                         the Credit Agreement dated as of November 17, 1997
                         (incorporated by reference to M & F Worldwide Corp.'s
                         Form 10-K for 2000).

        10.12            Employment agreements, dated August 1, 2000, between
                         the Registrant and Stephen G. Taub, Pramathesh S. Vora,
                         and Peter W. Grace. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 10-K for 2000).

        10.13            Amendment dated as of July 6, 1999, to employment
                         agreement dated January 7, 1997 between the Registrant
                         and J. Eric Hanson (incorporated by reference to
                         Exhibit 10.14 to M & F Worldwide Corp.'s Form 10-K for
                         1999).

        10.14            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).

        10.15            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).

        10.16            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).

                                       26
<PAGE>

        10.17            Credit Agreement, dated as of April 17, 2001, among
                         Flavors Holdings Inc., a Delaware corporation, Pneumo
                         Abex Corporation, a Delaware corporation, the several
                         banks and other financial institutions or entities from
                         time to time parties thereto, BNP Paribas, as
                         documentation agent, and JP Morgan Chase Bank, as
                         paying agent (incorporated by reference to Exhibit 99.3
                         to M & F Worldwide Corp.'s Form 8-K dated April 20,
                         2001).

        10.18            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).

        10.19            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).

        10.20            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).

        10.21            Letter Agreement relating to the Mafco Disbursement,
                         dated December 21, 2001, between Holdings, Inc. and M &
                         F Worldwide Corp. (incorporated by reference to Exhibit
                         10.24 to M & F Worldwide Corp.'s 2001 Form 10-K).

        10.22            Letter Agreement, dated December 21, 2001, between
                         Holdings, Inc. and M & F Worldwide Corp. (incorporated
                         by reference to Exhibit 10.25 to M & F Worldwide
                         Corp.'s 2001 Form 10-K).

        10.23            Letter dated December 21, 2001, from M & F Worldwide
                         Corp. to Panavision Inc. (incorporated by reference to
                         Exhibit 10.26 to M & F Worldwide Corp.'s 2001 Form
                         10-K).

        10.24            Employment agreement dated August 1, 2001, between the
                         Registrant and Stephen G. Taub. (incorporated by
                         reference to Exhibit 10.29 to M & F Worldwide Corp.'s
                         2001 Form 10-K).

        10.25            First Amendment, dated as of October 28, 2002, to the
                         Amended and Restated Credit Agreement, dated as of
                         April 17, 2001, among Flavors Holdings Inc., a Delaware
                         corporation, Pneumo Abex Corporation, a Delaware
                         corporation, the several banks and other financial
                         institutions or entities from time to time parties
                         thereto, BNP Paribas, as documentation agent, and JP
                         Morgan Chase Bank, as paying agent. (incorporated by
                         reference to Exhibit 10.4 to M & F Worldwide Corp.'s
                         Form 10-Q for the quarterly period ended September 30,
                         2002).

        10.26            Common Stock Letter Agreement, dated as of December 3,
                         2002, by and between PX Holding Corporation and M & F
                         Worldwide Corp. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 8-K dated December 18, 2002).

        10.27            Preferred Stock Letter Agreement, dated as of December
                         3, 2002, by and between PX Holding Corporation and M &
                         F Worldwide Corp. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 8-K dated December 18, 2002).

        10.28            1998 Registration Rights Termination Letter Agreement,
                         dated as of December 3, 2002, by and between M & F
                         Worldwide Corp. and Panavision Inc. (incorporated by
                         reference to M & F Worldwide Corp.'s Form 8-K dated
                         December 18, 2002).

        10.29            PX Holding-M & F Worldwide Termination Agreement, dated
                         as of December 3, 2002, by and between PX Holding and M
                         & F Worldwide Corp. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 8-K dated December 18, 2002).

        10.30            M & F Worldwide-Perelman Termination Agreement, dated
                         as of December 3, 2002, by and between Ronald O.
                         Perelman and M & F Worldwide Corp. (incorporated by
                         reference to M & F Worldwide Corp.'s Form 8-K dated
                         December 18, 2002).

                                       27
<PAGE>

        10.31            M & F Worldwide-Mafco Termination Agreement, dated as
                         of December 3, 2002, by and between Mafco Holdings Inc.
                         and M & F Worldwide Corp. (incorporated by reference to
                         M & F Worldwide Corp.'s Form 8-K dated December 18,
                         2002).

        10.32            M & F Worldwide-Panavision Termination Agreement, dated
                         as of December 3, 2002, by and between Panavision Inc.
                         and M & F Worldwide Corp. (incorporated by reference to
                         M & F Worldwide Corp.'s Form 8-K dated December 18,
                         2002).

        10.33            M & F Worldwide-Mafco Call Termination Agreement, dated
                         as of December 3, 2002, by and between Holdings Inc.
                         and M & F Worldwide Corp. (incorporated by reference to
                         M & F Worldwide Corp.'s Form 8-K dated December 18,
                         2002).

        10.34            Mafco-M & F Worldwide Note Agreement, dated as of
                         December 3, 2002, by and between Holdings Inc. and M &
                         F Worldwide Corp. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 8-K dated December 18, 2002).

        10.35            Amendment No. 1 to the Instrument of Assignment and
                         Assumption, dated as of December 3, 2002, by and
                         between Holdings Inc., M & F Worldwide Corp. and
                         Panavision Inc. (incorporated by reference to M & F
                         Worldwide Corp.'s Form 8-K dated December 18, 2002).

        10.36            Mafco-Pneumo Abex Corporation Letter Agreement, dated
                         as of December 3, 2002, by and between Holdings Inc., M
                         & F Worldwide Corp. and Pneumo Abex Corporation
                         (incorporated by reference to M & F Worldwide Corp.'s
                         Form 8-K dated December 18, 2002).

        10.37*           Management Services Agreement, dated as of October 29,
                         2003, by and between Mafco Holdings Inc. and M & F
                         Worldwide Corp.

        10.38*           M & F Worldwide Corp. 2003 Outside Directors Deferred
                         Compensation Plan.

        21*              List of subsidiaries

        23.1*            Consent of Independent Auditors

        24*              Powers of attorney executed by Messrs. Perelman,
                         Beekman, Coppola, Durnan, Folz, Gittis, Meister,
                         Slovin, and Taub.

        31.1*            Certification of Howard Gittis, Chief Executive
                         Officer, dated March 15, 2004.

        31.2*            Certification of Todd J. Slotkin, Chief Financial
                         Officer, dated March 15, 2004.

        32.1             Certification of Howard Gittis, Chief Executive
                         Officer, dated March 15, 2004, pursuant to 18 U.S.C.
                         Section 1350, as adopted pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002 (furnished herewith).

        32.2             Certification of Todd J. Slotkin, Chief Financial
                         Officer, dated March 15, 2004, pursuant to 18 U.S.C.
                         Section 1350, as adopted pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002 (furnished herewith).

(b)      Reports on Form 8-K:

         On November 6, 2003, the Company filed a current report on Form 8-K
         disclosing the Company's September 30, 2003 financial results.

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



                                       28
<PAGE>


                                   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 15, 2004         By: /s/Howard Gittis
                                  ---------------------------------------
                                  Howard Gittis
                                  Chairman of the Board,
                                  President and Chief Executive Officer


Dated: March 15, 2004         By: /s/Todd J. Slotkin
                                  ---------------------------------------
                                  Todd J. Slotkin
                                  Executive Vice President and
                                  Chief Financial Officer
                                  (Principal Financial Officer)


Dated: March 15, 2004         By: /s/Laurence Winoker
                                  ---------------------------------------
                                  Laurence Winoker
                                  Senior Vice President, Treasurer and
                                  Controller
                                  (Principal Accounting Officer)



                                     29
<PAGE>


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

SIGNATURE                               TITLE                  DATE

Ronald O. Perelman *                    Director               March 15, 2004
--------------------------------------------------------------
Ronald O. Perelman

Philip E. Beekman *                     Director               March 15, 2004
--------------------------------------------------------------
Philip E. Beekman

Rosanne F. Coppola *                    Director               March 15, 2004
--------------------------------------------------------------
Rosanne F. Coppola

Jaymie A. Durnan *                      Director               March 15, 2004
--------------------------------------------------------------
Jaymie A. Durnan

Theo W. Folz *                          Director               March 15, 2004
--------------------------------------------------------------
Theo W. Folz

Howard Gittis *                         Director               March 15, 2004
--------------------------------------------------------------
Howard Gittis

Paul M. Meister *                       Director               March 15, 2004
--------------------------------------------------------------
Paul M. Meister

Bruce Slovin *                          Director               March 15, 2004
--------------------------------------------------------------
Bruce Slovin

Stephen G. Taub *                       Director               March 15, 2004
--------------------------------------------------------------
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 15, 2004                 By: /s/Todd J. Slotkin
                                          -------------------------------------
                                          Todd J. Slotkin
                                          Attorney-in-Fact




                                       30
<PAGE>


                     Item 8, Item 15 (a)(1) and (2) and (d)

       INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
                                   SCHEDULES
                          YEAR ENDED DECEMBER 31, 2003


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

         As of December 31, 2003 and 2002 and for the years ended December 31,
2003, 2002 and 2001.

                                                                          Pages
                                                                          ------
Report of Independent Auditors ............................................F-2
Consolidated Balance Sheets ...............................................F-3
Consolidated Statements of Income .........................................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 15(a);

Schedule I - Condensed Financial Information of Registrant ................F-29
Schedule II - Valuation and Qualifying Accounts and Reserves ..............F-32

         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.



                                      F-1
<PAGE>



                         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, 2003 and 2002, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 2003. Our audits also
included the financial statement schedules listed in the Index at Item 15(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, 2003 and 2002, and the
consolidated results of their operations and cash flows for each of the three
years in the period ended December 31, 2003, 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.

As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for goodwill and certain other intangible
assets in 2002 with the adoption of Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets."



                                                   Ernst & Young LLP



New York, New York
February 24, 2004



                                      F-2

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                      (IN MILLIONS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                          DECEMBER 31,
                                                                                        ----------------
                                                                                        2003        2002
                                                                                        ----------------
<S>                                                                                    <C>          <C>
                                       ASSETS
Current assets:
  Cash and cash equivalents                                                             $115.3      $105.7
  Accounts receivable (net of allowances of $0.2 and $0.1)                                 9.1        13.2
  Inventories                                                                             57.1        54.7
  Prepaid expenses and other                                                               4.5         4.3
                                                                                        ------      ------
Total current assets                                                                     186.0       177.9
Property, plant and equipment, net                                                        19.6        19.4
Goodwill, net                                                                             40.4        38.2
Other intangible assets, net                                                             109.6       109.3
Deferred tax asset                                                                         0.6         0.9
Pension asset                                                                             14.5        14.2
Other                                                                                     11.7        13.3
                                                                                        ------      ------
Total assets                                                                            $382.4      $373.2
                                                                                        ======      ======

                            LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short term borrowings                                                                 $   --      $  0.7
  Accounts payable                                                                         7.3         6.4
  Accrued liabilities                                                                      9.9        11.3
  Current maturities of long-term debt                                                    19.4        25.1
                                                                                        ------      ------
Total current liabilities                                                                 36.6        43.5

Long-term debt                                                                            15.2        34.6
Deferred tax liabilities                                                                   7.9         3.1
Other liabilities                                                                         18.0        17.9

Commitments and contingencies                                                               --          --

Stockholders' equity:
  Common stock, par value $.01; 250,000,000 shares authorized;
    20,928,704 shares issued at December 31, 2003 and
    20,663,171 shares issued at December 31, 2002                                          0.2         0.2
  Additional paid-in capital                                                              31.5        29.4
  Treasury stock at cost
    2,541,900 shares at December 31, 2003 and 2002                                       (14.8)      (14.8)
  Retained earnings                                                                      288.3       265.1
  Accumulated other comprehensive loss                                                    (0.5)       (5.8)
                                                                                        ------      ------
    Total stockholders' equity                                                           304.7       274.1
                                                                                        ------      ------
Total liabilities and stockholders' equity                                              $382.4      $373.2
                                                                                        ======      ======
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      F-3

<PAGE>





                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                        ------------------------------------
                                                                          2003          2002            2001
                                                                          ----          ----            ----
<S>                                                                      <C>           <C>             <C>
Net revenues                                                             $95.7         $96.9           $98.4
Cost of revenues                                                          46.3          47.3            51.6
                                                                         -----         -----           -----
Gross profit                                                              49.4          49.6            46.8
Selling, general and administrative expenses                              17.3          14.5            15.6
Gain on pension reversion                                                  -             -             (11.1)
                                                                         -----         -----           -----
Operating income                                                          32.1          35.1            42.3
Interest income                                                            1.2           0.3             0.8
Interest expense                                                          (2.9)         (4.1)           (5.0)
Other income (expense), net                                                2.7          (0.5)           (1.0)
                                                                         -----         -----           -----
Income from continuing operations before income taxes                     33.1          30.8            37.1
Provision for income taxes                                               (10.5)        (12.2)          (18.7)
                                                                         -----         -----           -----
Income from continuing operations                                         22.6          18.6            18.4
Discontinued operations
     Gain (loss) from operations of discontinued business, net of
         taxes of $0.6, $0.2, $8.4, respectively;
         (including gain on disposal of $17.6 in 2002)                     0.6           5.5           (12.3)
                                                                         -----         -----           -----


Net income                                                                23.2          24.1             6.1
Preferred stock dividends                                                  -            (0.3)           (0.2)
                                                                         -----         -----           -----
Net income available to shareholders                                     $23.2         $23.8            $5.9
                                                                         =====         =====            ====

Basic earnings (loss) per common share:
     Undistributed earnings from continuing operations                   $1.23         $0.71           $0.74
     Undistributed earnings (loss) from discontinued operations           0.04          0.21           (0.50)
                                                                         -----         -----           -----
         Total common stock                                              $1.27         $0.92           $0.24
                                                                         =====         =====           =====

Diluted earnings (loss) per common share:
     Undistributed earnings from continuing operations                   $1.18         $0.71           $0.74
     Undistributed earnings (loss) from discontinued operations           0.03          0.21           (0.50)
                                                                         -----         -----           -----
         Total common stock                                              $1.21         $0.92           $0.24
                                                                         =====         =====           =====

Basic and diluted earnings (loss) per preferred share:
     Distributed earnings                                                $ -           $0.04           $0.05
     Undistributed earnings from continuing operations                     -            0.71            0.74
     Undistributed earnings (loss) from discontinued operations            -            0.21           (0.50)
                                                                         -----         -----           -----
         Total preferred stock                                           $ -           $0.96           $0.29
                                                                         =====         =====           =====
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      F-4

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                       ACCUMULATED OTHER
                                                                                                       COMPREHENSIVE LOSS
                                                                                                      ---------------------
                                    COMMON STOCK  PREFERRED STOCK ADDITIONAL TREASURY STOCK            CURRENCY    MINIMUM
                                   -------------- ---------------  PAID-IN   --------------  RETAINED TRANSLATION  PENSION
                                   SHARES  AMOUNT SHARES   AMOUNT  CAPITAL   SHARES  AMOUNT  EARNINGS ADJUSTMENT  LIABILITY  TOTAL
                                   ------  ------ ------   ------ ---------- ------  ------  -------- ----------- --------- -------
<S>                                <C>     <C>    <C>      <C>    <C>         <C>    <C>     <C>      <C>         <C>       <C>
Balance, December 31, 2000           20.6  $  0.2      -   $   -  $    27.0    1.5   $ (8.7) $  235.4 $    (8.0)  $   (0.2) $ 245.7
  Net income                                                                                      6.1                           6.1
  Currency translation adjustment,
  net of taxes of $0                                                                                       (0.1)               (0.1)
  Minimum pension liability, net
  of taxes of $0                                                                                                      (0.2)    (0.2)
                                                                                                                             ------
  Comprehensive income                                                                                                          5.8
                                                                                                                             ------
  Issuance of treasury common stock                                    (0.8)  (1.5)     8.5                                     7.7
  Purchase of treasury common stock                                            1.0     (6.5)                                   (6.5)
  Issuance of preferred stock                        6.8     41.7                                                              41.7
  Preferred stock dividends                                                                      (0.2)                         (0.2)
  Capital contribution                                                  1.7                                                     1.7
                                   ------  ------ ------   ------ ---------- ------  ------  -------- ----------- --------- -------
Balance, December 31, 2001           20.6     0.2    6.8     41.7      27.9    1.0     (6.7)    241.3      (8.1)      (0.4)   295.9
  Net income                                                                                     24.1                          24.1
  Currency translation adjustment,
  net of taxes of $0                                                                                        3.1                 3.1
  Minimum pension liability, net
  of taxes of $0.4                                                                                                    (0.4)    (0.4)
                                                                                                                            -------
  Comprehensive income                                                                                                         26.8
                                                                                                                            -------
  Purchase of treasury common stock                                            1.5     (8.1)                                   (8.1)
  Purchase of preferred stock                       (6.8)   (41.7)                                                            (41.7)
  Preferred stock dividends                                                                      (0.3)                         (0.3)
  Capital contribution                                                  1.5                                                     1.5
                                   ------  ------ ------   ------ ---------- ------  ------  -------- ----------- --------- -------
Balance, December 31, 2002           20.6     0.2      -       -       29.4    2.5    (14.8)    265.1      (5.0)      (0.8)   274.1
  Net income                                                                                     23.2                          23.2
  Currency translation adjustment,
  net of taxes of $0                                                                                        5.5                 5.5
  Minimum pension liability, net
  of taxes of $0.1                                                                                                    (0.2)    (0.2)
                                                                                                                            -------
  Comprehensive income                                                                                                         28.5
                                                                                                                            -------
  Stock options exercised             0.3                               2.1                                                     2.1
                                   ------  ------ ------   ------ ---------- ------  ------  -------- ----------- --------- -------
Balance, December 31, 2003           20.9  $  0.2      -   $   -  $    31.5    2.5   $(14.8) $  288.3 $     0.5   $   (1.0) $ 304.7
                                   ======  ====== ======   ====== ========== ======  ======  ======== =========== ========= =======
</TABLE>


                 See Notes to Consolidated Financial Statements


                                      F-5

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (IN MILLIONS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                         YEAR ENDED DECEMBER 31,
                                                                                ------------------------------------------
                                                                                    2003           2002           2001
                                                                                ------------   ------------   ------------
<S>                                                                                  <C>            <C>             <C>
Operating activities
Net income                                                                           $ 23.2         $ 24.1          $ 6.1
Adjustments to derive net cash provided by operating activities:
      Loss (gain) from operations of discontinued business, net of taxes               (0.6)          (5.5)          12.3
      Depreciation and amortization                                                     3.9            3.6            7.5
      Deferred income taxes                                                             6.0            9.2           15.2
      Write-off of deferred financing fees                                                -              -            0.4
      Cash flows from discontinued operations                                             -           (1.1)          (4.5)
      Compensation expense paid by principal stockholder                                  -            1.5            1.5
Changes in operating assets and liabilities, net of effects of acquisitions:
        Decrease (increase) in accounts receivable                                      4.6           (1.0)          (2.4)
        Increase in inventories                                                        (0.9)          (1.1)          (4.1)
        (Increase) decrease in prepaid expense and other current assets                (0.1)           5.2           (6.9)
        (Increase) decrease in pension asset                                           (0.4)          (0.9)          20.7
        (Decrease) increase in accounts payable and accrued expenses                   (1.0)           2.8            2.1
      Other, net                                                                        0.8            0.5            1.8
                                                                                ------------   ------------   ------------
        Net cash provided by continuing operating activities                           35.5           37.3           49.7

INVESTING ACTIVITIES
Disposition (acquisition) of Panavision and EFILM                                         -           85.7          (86.6)
Sale (purchase) of Panavision subordinated notes                                          -            4.4           (4.4)
Capital expenditures                                                                   (2.1)          (0.8)          (1.1)
                                                                                ------------   ------------   ------------
        Net cash (used in) provided by investing activities                            (2.1)          89.3          (92.1)

FINANCING ACTIVITIES
Proceeds from notes payable and credit agreements                                         -            1.5           96.0
Repayments of notes payable and credit agreements                                     (25.9)         (25.4)         (41.4)
Common stock repurchased                                                                  -              -           (6.5)
Stock options exercised                                                                 1.9              -              -
Debt issuance costs                                                                       -           (0.6)          (4.3)
Preferred stock dividends                                                                 -           (0.4)          (0.1)
                                                                                ------------   ------------   ------------
        Net cash (used in) provided by financing activities                           (24.0)         (24.9)          43.7

Effect of exchange rate changes on cash                                                 0.2            0.1              -

Net increase in cash and cash equivalents                                               9.6          101.8            1.3
Cash and cash equivalents at beginning of period                                      105.7            3.9            2.6
                                                                                ------------   ------------   ------------
Cash and cash equivalents at end of period                                          $ 115.3        $ 105.7          $ 3.9
                                                                                ============   ============   ============

Supplemental disclosure of cash paid for:
      Interest                                                                        $ 2.9          $ 4.9          $ 4.4
      Taxes paid, net of refunds                                                        2.1            2.4            2.2
</TABLE>



                 See Notes to Consolidated Financial Statements


                                      F-6

<PAGE>

                     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"), 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, from April 19, 2001 until
December 3, 2002, an indirect 85.7%-owned subsidiary, Panavision Inc.
("Panavision") (see Note 2). The Panavision business is accounted for as
discontinued operations, and, therefore, the Company has removed the Panavision
results of operations and cash flows from the Company's results from continuing
operations and cash flows for all periods presented in this document. The
financial results reported as discontinued operations include the operations of
both Panavision and Las Palmas Productions, Inc. ("Las Palmas").

         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 investment in 50% or
less owned affiliates on the equity method.

         The Company produces a variety of licorice flavors from licorice root,
intermediary licorice flavors produced by others and certain other ingredients
at its facilities in Camden, New Jersey, Richmond, Virginia, Gardanne, France
and Xianyang Shaanxi, People's Republic of China. Over 70% of the Company'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. The Company also sells licorice to
worldwide confectioners, food processors and pharmaceutical manufacturers for
use as flavoring or masking agents. In addition, the Company sells licorice root
residue as garden mulch under the name Right Dress. The Company 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.

RECLASSIFICATIONS

         The Company has reclassified certain amounts in previously issued
financial statements to conform to the 2003 presentation.

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

         The Company records revenues when title passes to customers. Title may
pass to customers upon leaving the Company's facilities, upon receipt at a
specific destination (such as a shipping port) or upon arrival at the customer's
facilities, depending on the terms of the contractual agreements for each
customer. Title for sales to domestic customers typically passes when the
product leaves the Company's facilities. Title for sales to international
customers typically passes either when the product is delivered to a shipping
port or when the product is delivered to the customer's facilities. Returns and
allowances, which have not been significant, are provided for in the period of
sale.

FREIGHT COSTS

          For the years ended December 31, 2003, 2002, and 2001, freight costs
of the Company amounted to $1.0, $1.3, and $1.4, respectively, and are included
in cost of revenues in the accompanying consolidated statements of income.



                                      F-7

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


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

         The Company states inventories at the lower of cost or market value.
The Company determines cost principally by the first-in, first-out method.

PROPERTY, PLANT AND EQUIPMENT

         The Company states property, plant and equipment at cost and charges
maintenance and repairs 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 such assets, ranging from 3 to 20 years. The Company amortizes
leasehold improvements over the shorter of the useful life of the related asset
or the remaining lease term. The Company eliminates cost and accumulated
depreciation applicable to assets retired or otherwise disposed of from the
accounts and reflects any gain or loss on such disposition in operating results.

INTANGIBLE ASSETS RELATED TO BUSINESSES ACQUIRED AND OTHER INTANGIBLE ASSETS

         The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations," as of July 1, 2002. SFAS No. 141
requires the purchase method of accounting for business combinations initiated
after June 30, 2001 and eliminates the pooling-of-interests method.

         The Company adopted SFAS No. 142, "Goodwill and Other Intangible
Assets," as of January 1, 2002, with the exception of provisions relating to
nonamortization of goodwill and intangible assets acquired after June 30, 2001,
which it adopted as of July 1, 2001. SFAS No. 142 changed the accounting for
goodwill from an amortization method to an impairment only approach. In
addition, the standard included provisions, upon adoption, for the
reclassification of certain existing recognized intangibles as goodwill, the
reassessment of the useful lives of existing recognized intangibles, the
reclassification of certain intangibles out of previously reported goodwill and
the testing for impairment of existing goodwill and other intangibles.

         Upon adoption in 2002, the Company discontinued amortization of
goodwill resulting from business acquisitions. It also reassessed the useful
life of other intangible assets, which consist of product formulations. It
determined the useful life of the product formulations to be indefinite and
therefore discontinued amortization of the formulations in 2002.

         The Company performed impairment tests on the goodwill and product
formulations upon adoption of SFAS No. 142 as of January 1, 2002, and also
performed the required annual impairment tests on these assets as of October 1,
2002 and 2003. No impairment of these assets was determined as a result of these
tests. The Company will continue to perform the required impairment tests on
goodwill and product formulations annually, or more frequently if events or
changes in circumstances indicate that the assets might be impaired.

          The goodwill impairment test is a two-step process, which requires
management to make judgments in determining what assumptions to use in the
calculation. The first step of the process consists of estimating the fair value
of the Company based on a discounted cash flow model using revenue and profit
forecasts and comparing the estimated fair value with the carrying value, which
includes the goodwill. If the estimated fair value is less than the carrying
value, a second step is performed to compute the amount of the impairment by
determining an "implied fair value" of goodwill. The determination of the
Company's "implied fair value" requires the Company to allocate the estimated
fair value to the assets and liabilities of the Company. Any unallocated fair
value represents the "implied fair value" of goodwill, which is compared to the
corresponding carrying value.

         The Company measures impairment of the product formulations based on a
projected discounted cash flow. The Company also reevaluates the useful life of
the product formulations annually to determine whether events and circumstances
continue to support an indefinite useful life.



                                      F-8

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

         A reconciliation of reported income from continuing operations to
income from continuing operations adjusted to reflect the exclusion of
amortization of goodwill and product formulations, which had been included as a
component of selling, general and administrative expenses for the year ended
December 31, 2001, is as follows:


                                                                     2001
                                                                    ------

         Reported income from continuing operations                 $ 18.4
           Add back: Goodwill amortization, net of taxes               0.6
           Add back: Product formula amortization, net of taxes        2.8
                                                                    ------

         Adjusted income from continuing operations                 $ 21.8
                                                                    ======

         Basic and diluted earnings per share:
           Reported income from continuing operations               $ 0.74
           Goodwill amortization, net of taxes                        0.03
           Product formula amortization, net of taxes                 0.12
                                                                    ------

           Adjusted basic and diluted earnings per share from
             continuing operations                                  $ 0.89
                                                                    ======

ACCOUNTING FOR LONG-LIVED ASSETS

         The Company adopted SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," on January 1, 2002. 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. The adoption of SFAS No. 144 did not
have a material effect on the Company's consolidated financial position, results
of operations and cash flows. The Company presents the discontinued Panavision
operations in accordance with the new SFAS No. 144 rules.

         The Company assesses on an ongoing basis the recoverability of
long-lived assets other than goodwill and indefinite lived 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.

INCOME TAXES

         The Company computes income taxes under the liability method. Under the
liability method, the Company generally determines deferred income taxes based
on the differences 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. The Company records net deferred tax assets
when it is more likely than not that it will realize the tax benefits.

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. Subsidiaries of the Company outside the United States have
retirement plans that provide certain payments upon retirement.



                                      F-9

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


RESEARCH AND DEVELOPMENT

         The Company expenses research and development expenditures as it incurs
them. The amounts it charged against income were not significant in 2003, 2002
and 2001.


TRANSLATION OF FOREIGN CURRENCIES

         The functional currency for the Company's foreign subsidiaries is their
local currency. The Company translates all assets and liabilities denominated in
foreign functional currencies into U.S. dollars at rates of exchange in effect
at the balance sheet date and statement of income items at the average rates of
exchange prevailing during the period. The Company records translation gains and
losses 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 has three stock-based employee compensation plans, which
are described more fully in Note 8. The Company accounts for stock-based
compensation plans using the intrinsic value method prescribed in APB Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
Accordingly, the Company measures compensation cost for stock options 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.

         The exercise price of the stock options granted in 2003 and 2002 were
equal to the market value of the Company's stock on the dates of grant and
accordingly, the Company recognized no compensation cost for stock options
issued in 2003 and 2002. The Company did not grant any options in 2001.

         The following table illustrates the effect on net income and earnings
per share if the Company had applied the fair value recognition provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," to stock-based employee
compensation.

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                             -------------------------------------
                                                               2003            2002           2001
                                                              -----          ------           ----
<S>                                                           <C>            <C>              <C>
Net income as reported                                        $23.2          $24.1            $6.1

Deduct: total stock-based employee compensation expense
  determined under fair value method for all awards,
  net of related tax effects                                   (0.2)          (0.2)           (0.6)
                                                              -----          ------           ----
Pro forma net income                                          $23.0          $23.9            $5.5
                                                              =====          =====            ====

Earnings per share:

Basic undistributed income per share - as reported             $1.27          $0.92           $0.24
Basic undistributed income per share - pro forma               $1.26          $0.92           $0.20

Diluted undistributed income per share - as reported           $1.21          $0.92           $0.24
Diluted undistributed income per share - pro forma             $1.20          $0.92           $0.20
</TABLE>


INVESTMENTS

         Investments of approximately $0.8 at both December 31, 2003 and 2002
are accounted for under the equity method and are included in other assets in
the accompanying consolidated balance sheets. The Company's share of earnings or
losses in its equity investees is included in other income (expense), net in the
accompanying consolidated statements of income.




                                      F-10

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


DERIVATIVES AND HEDGING ACTIVITIES

          The Company adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended, on January 1, 2001. 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. SFAS No. 133
requires the Company 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.

EARLY EXTINGUISHMENT OF DEBT

         In April 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 145, "Recission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." Among other things, SFAS No. 145
requires gains and losses from early extinguishment of debt to be included in
income from continuing operations instead of being classified as extraordinary
items as previously required. The Company adopted SFAS No. 145 on January 1,
2003 and has reclassified the $0.2 of extraordinary loss, net in 2001 into
income from continuing operations.

2.   ACQUISITIONS/DISPOSITION

PANAVISION ACQUISITION/DISPOSITION

         Pursuant to a Stock Purchase Agreement, dated as of April 19, 2001,
between PX Holding Corporation ("PX Holding"), a wholly owned subsidiary of
Mafco Holdings, Inc. ("Holdings"), and the Company, the Company acquired from PX
Holding 7,320,225 shares of common stock (the "Acquired Shares") of Panavision
(the "Panavision Acquisition"). The aggregate consideration for the Acquired
Shares was $121.0, consisting 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 of M & F Worldwide having
a liquidation preference of $6.50 per share and one vote per share (the "Series
B Preferred Stock").

         In accordance with APB Opinion No. 16, the Company used the purchase
method to account for the Panavision Acquisition. The Company based its
allocation of the purchase price to the purchased assets and liabilities on
their respective estimated fair values at April 19, 2001 to the extent of the
Company's 83.5% controlling interest. The Company accounted for the remaining
16.5% at Panavision's carryover basis.

         On December 21, 2001, PX Holding paid $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 95/8% Senior Subordinated Notes of Panavision due 2006 (the
"Notes") for $8.1. The Company then delivered such Notes, together with $2.5
principal amount of Notes owned by the Company, to Panavision in exchange for
1,381,690 newly issued shares of Panavision's Series A Non-Cumulative Perpetual
Participating Preferred Stock (the "Panavision Series A Preferred Stock").

         Certain shareholders of the Company brought suits against the Company
and its directors challenging the Panavision Acquisition as an alleged breach of
fiduciary duty and seeking, among other things, rescission of the transaction.
One of the shareholders dismissed his lawsuit pursuant to a settlement in 2001.
In July 2002, the Company and the other parties to the litigation reached a
Stipulation of Settlement (the "Settlement"). Under the terms of the Settlement
approved by the Chancery Court, Holdings (i) acquired (a) the Acquired Shares,
(b) the shares of Panavision Series A Preferred Stock that the Company acquired
in December 2001, (c) $11.4 principal amount of Notes that Pneumo Abex acquired
in November 2001, and (d) a note in the amount of $6.7 (the "Las Palmas Note")
that Panavision issued to the Company on its acquisition of the shares of Las
Palmas in July 2002, and (ii) delivered to the Company $90.1 in cash and all of
the shares of M & F Worldwide common stock and Series B Preferred Stock that
Holdings and its wholly owned subsidiaries had acquired since April 2001. In
addition, all agreements to which the Company was a party connected to the
Panavision Acquisition and the December 2001 issuance of the Panavision Series A
Preferred Stock were terminated.



                                      F-11

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

         The Settlement was consummated on December 3, 2002. In accordance with
SFAS No. 144, the Company has presented the operations of Panavision as
discontinued and accounted for the Settlement as the sale of its interests in
Panavision. In connection with the sale, the Company recorded a gain of $17.6,
which is the difference between the fair value of the consideration received and
the net book value of the Acquired Shares, the Panavision Series A Preferred
Stock, the $11.4 principal amount of Notes and the Las Palmas Note.

         The amounts of revenue and pre-tax loss reported in discontinued
operations related to Panavision for 2002 and 2001 were as follows:

                                              YEARS ENDED DECEMBER 31,
                                              ------------------------
                                              2002               2001
                                             ------             ------
          Revenue                            $175.9             $125.0
          Pre-tax loss                        $16.6              $20.8


         At December 31, 2003, Holdings' indirect beneficial ownership of M & F
Worldwide represented 38.3% of the outstanding M & F Worldwide common stock.

LAS PALMAS PRODUCTIONS, INC. ACQUISITION/DISPOSITION

         In July 2001, the Company purchased all of the capital stock of Las
Palmas, which operated EFILM, a provider of digital processing services to the
motion picture and television industries. From that date through July 1, 2002,
Panavision operated EFILM pursuant to various agreements with Las Palmas.
Pursuant to those agreements, 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 to Panavision until July 2, 2008 a worldwide,
nonexclusive license to certain technology and intellectual property to be used
solely in connection with servicing customers, which automatically renewed for
successive one year terms unless prior written notice was provided by a party
(collectively, the "EFILM Agreements"). In addition to monthly payments, the
EFILM Agreements required that Panavision pay the Company a one-time cash
payment equal to the greater of (i) 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 (ii) $1.5, such payment to occur no
earlier than 2004 and no later than 2007. On July 2, 2002, Panavision purchased
the capital stock of Las Palmas from the Company in exchange for the Las Palmas
Note, which accrued interest at 10% per annum, payable on the earlier to occur
of (i) September 30, 2005 or (ii) a refinancing of Panavision's bank credit
facilities. The EFILM Agreements were terminated. In connection with its
purchase of Las Palmas, Panavision entered into an Instrument of Assignment and
Assumption with the Company, indemnifying the Company with respect to liability,
including deferred purchase price, to the former shareholders of Las Palmas in
connection with their sale of Las Palmas to the Company in 2001. Panavision also
assumed all liabilities and obligations of the Company under the Non-competition
Agreement dated July 2, 2001 by and among the Company, the former shareholders
of Las Palmas and Las Palmas. In connection with the Settlement, PX Holding
purchased the promissory note for $6.7 on December 3, 2002.



                                      F-12

<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

3.       INVENTORIES

         Inventories consisted of the following:

                                                             DECEMBER 31,
                                                          -------------------
                                                          2003           2002
                                                         -----          -----
         Raw materials                                   $44.7          $42.0
         Work-in-progress                                  0.8            0.3
         Finished goods                                   11.6           12.4
                                                         -----          -----
                                                         $57.1          $54.7
                                                           =====          =====

4.       PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment consisted of the following:

                                                            DECEMBER 31,
                                                         -------------------
                                                         2003           2002
                                                         -----          -----
         Land                                            $1.7           $1.6
         Buildings                                       11.1           10.5
         Machinery and equipment                         24.8           22.3
                                                         -----          -----
                                                         37.6           34.4
         Accumulated depreciation                       (18.0)         (15.0)
                                                         -----          -----
                                                        $19.6          $19.4
                                                         =====          =====

         Depreciation expense was $2.9, $2.7 and $2.6 in 2003, 2002 and 2001
respectively.




5.       ACCRUED LIABILITIES

         Accrued liabilities consisted of the following:

                                                             DECEMBER 31,
                                                          -------------------
                                                          2003           2002
                                                         -----          -----
         Interest payable                                $0.1           $0.1
         Professional fees                                0.3            0.4
         Taxes other than income taxes                    0.4            0.2
         Payroll and related costs                        3.3            3.8
         Payable to indemnitor and affiliate
            (see Note 12)                                 3.9            3.3
         Accrued other                                    1.9            3.5
                                                         -----          -----
                                                         $9.9          $11.3
                                                         =====          =====

6.       INCOME TAXES

         For the period from April 19, 2001 through December 3, 2002,
Panavision, for federal income tax purposes, was part of the affiliated group of
which the Company is the common parent (the "M & F Worldwide Group"), and the
Company included Panavision's federal taxable income in such group's
consolidated tax return. The Company also included Panavision in certain state
and local tax returns for that period. As of April 19, 2001, Panavision and
certain of its subsidiaries and the Company entered into a tax sharing agreement
(the "Panavision/Company Tax Sharing Agreement"), pursuant to which the Company
agreed to indemnify Panavision against federal, state or local income tax
liabilities of the M & F Worldwide Group for taxable periods beginning on or
after April 19, 2001 during which Panavision or a subsidiary of Panavision was a
member of such group. Pursuant to the Panavision/Company Tax Sharing Agreement,
for all taxable periods beginning on or after April 19, 2001 and ending December
3, 2002, Panavision was obligated to 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 was not entitled to
carryback any losses to taxable periods ending prior to April 19, 2001. The
Panavision/Company Tax Sharing Agreement required no payment by



                                      F-13
<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


Panavision as it had sufficient net operating loss carryforwards to offset its
taxable income. The Panavision/Company Tax Sharing Agreement will continue in
effect after December 3, 2002 only as to matters such as audit adjustments and
indemnities.

         The net gain on disposal of discontinued business reflects the impact
of the loss of approximately $15.1 of federal net operating loss carryforwards
of Pneumo Abex, which are no longer available to the Company as a result of the
deconsolidation of Panavision. In addition, for tax purposes the Company
generated a capital loss of approximately $11.9 in connection with the
deconsolidation of Panavision for which the Company recorded a valuation
allowance, as it is not assured that it will realize such benefit in the future.

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


<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31,
                                                                          ---------------------------------
                                                                          2003          2002           2001
                                                                         -----          ----          -----
<S>                                                                      <C>            <C>           <C>
Income from continuing operations before income taxes
  Domestic                                                               $31.7         $28.7          $34.6
  Foreign                                                                  1.4           2.1            2.5
                                                                         -----         -----          -----
  Total income from continuing operations before taxes                   $33.1         $30.8          $37.1
                                                                         =====         =====          =====

Provision (benefit) for income taxes:
  Current:
    Federal                                                             $ (0.1)          -             $0.8
    State and local                                                       (0.1)          2.3            1.9
      Foreign                                                              0.5           0.7            1.0
                                                                         -----         -----          -----
                                                                           0.3           3.0            3.7

Deferred:
Federal                                                                   10.3           9.2           15.0
Foreign                                                                   (0.1)          -              -
                                                                         -----         -----          -----
Total provision for income taxes                                         $10.5         $12.2          $18.7
                                                                         =====         =====          =====
</TABLE>


         The Company recorded a tax provision of $10.5 (an effective tax rate of
31.7%), $12.2 (an effective tax rate of 39.6%) and $18.7 (an effective tax rate
of 50.4%) for the years ended December 31, 2003, 2002 and 2001, respectively.
The lower effective tax rate for 2003 was caused by a reduction of a 2002
provision for state taxes of $0.6 and reversal of reserves for state and federal
taxes of $1.3 for certain prior year issues due to the resolution of
uncertainties in 2003. The effective rate in 2001 reflects the effect of
non-deductible items, primarily excise tax paid on the pension reversion.



                                      F-14

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

         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 assets and liabilities are as follows:


<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                 -------------------------
                                                                                  2003              2002
                                                                                 -----             -----
<S>                                                                              <C>               <C>
Deferred tax assets:
   Current:
     Inventory                                                                   $ 0.8             $ 0.8
     Accrued expenses and other liabilities                                        0.3               0.2
   Long-term
     Other liabilities                                                             2.2               2.1
     Property, plant and equipment                                                 2.1               1.6
     Net operating loss carryforwards                                             11.2              11.9
     Net capital loss carryforwards                                                4.1               5.8
     Tax credit carrryforwards (primarily alternative minimum tax)                 1.1               2.0
                                                                                 -----             -----

     Total deferred tax asset                                                     21.8              24.4
     Valuation allowance                                                          (4.1)             (5.8)
                                                                                 -----             -----
     Total deferred tax asset net of valuation allowance                          17.7              18.6

Deferred tax liabilities:
   Long-term:
     Property, plant and equipment                                                 0.8               0.7
     Pension asset                                                                 5.7               4.5
     Intangibles                                                                  17.5              12.0
     Other                                                                         -                 1.6
                                                                                 -----             -----
       Total deferred tax liability                                               24.0              18.8
                                                                                 -----             -----
Net deferred tax liabilities                                                     $(6.3)            $(0.2)
                                                                                 =====             =====
</TABLE>


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

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                  -----------------------------------
                                                                   2003          2002           2001
                                                                  ------        ------         ------
<S>                                                                <C>           <C>            <C>
Statutory rate                                                     35.0%         35.0%          35.0%
State and local taxes                                               2.8           5.0            5.1
Non-deductible excise tax                                           -             -              7.9
Foreign tax rates lower than U.S. tax rates                        (0.1)          -              -
Reversal of reserve                                                (4.0)          -              -
Other                                                              (2.0)         (0.4)          2.4
                                                                  ------        ------         ------
                                                                   31.7%         39.6%         50.4%
                                                                  ======        ======         ======
</TABLE>

         At December 31, 2003, the Company had federal net operating loss
carryforwards of approximately $32.1, and in 2002 $34.0, which expire in the
years 2008 to 2012.

         In March 2002, new tax legislation was enacted, which allowed for the
utilization of alternative minimum tax net operating losses to fully offset
alternative minimum taxable income for 2001 and 2002. The Company recorded the
effect of this new legislation in the first quarter of 2002. It primarily
resulted 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 dates as fixed
by the Board of Directors of M & F Worldwide to any person who owns, or after
giving effect to such


                                      F-15
<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

transfer would own, at least 5% of the outstanding M & F
Worldwide common stock. The Company believes 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 1995 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 Mafco Consolidated Group Inc. ("MCG"), the
company resulting from the Abex Merger, 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 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.

         See Note 12 regarding certain tax matters pertaining to the Company's
wholly owned French subsidiary.

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.

         At December 31, 2003 and 2002, there were shares of common stock
outstanding of 20,928,704 and 20,663,171, respectively, of which 2,541,900
shares were held in treasury in 2003 and 2002. There were 20,000 shares of
Series A Preferred Stock outstanding at December 31, 2003 and 2002, all of which
were held in treasury. 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.
These shares were returned to the Company as a result of the Settlement and were
returned to the status of "blank check" preferred so that they are no longer
outstanding. The Series B Preferred Stock had 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 were 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 participated 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, 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.


                                      F-16

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


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


                                                           EXERCISE PRICE
                                                         ----------------------
                                               SHARES                WEIGHTED
                                                (000)     RANGE     AVG. PRICE
                                               ------    -------   ------------
Options outstanding at December 31, 2001        2,548  $5.50-7.625     $6.72
  Options granted                                 465      2.85         2.85
                                               ------
Options outstanding at December 31, 2002        3,013   2.85-7.625      6.13
  Options granted                                  25      9.74         9.74
  Options exercised                              (265)  2.85-7.625      7.17
                                               ------
Options outstanding at December 31, 2003        2,773   2.85-9.74       6.06
                                               ======

         The weighted-average remaining contractual life of options outstanding
under the Stock Plans at December 31, 2003 is 5.1 years.

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

                                                    DECEMBER 31,
                                       -----------------------------------------
                                        2003             2002            2001
                                       -------         --------        ---------
Options Exercisable:
  Number of shares (000)                2,593            2,703           2,048
  Weighted average exercise price       $6.21            $6.50           $6.54


         The weighted average fair value of options granted in 2003 and 2002 was
$7.15 and $1.89, 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, 2003. The
options granted in 2000 have a 10-year term and were fully vested at December
31, 2003. The options granted in 2003 and 2002 have a 10-year term and vest over
a three-year period.

         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 2003 and 2002,
respectively: dividend yield of 0.0% and 0.0%; expected stock price volatility
of 0.62 and 0.48; risk-free interest rate of 3.96% and 5.28%; and expected life
of 10 years and 10 years.

         The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options. M & F Worldwide'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 the Company 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. The Company'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 the Company 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 in 2001 of $11.1 after federal
excise taxes of $8.5.
                                      F-17

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

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

                                                                DECEMBER 31,
                                                           ---------------------
                                                             2003          2002
                                                           -------        ------
Accumulated Benefit Obligation                               $5.4          $4.2
                                                           =======        ======

Change in Projected Benefit Obligation
  Projected benefit obligation at beginning of year          $6.0          $5.4
  Service cost                                                0.3           0.3
  Interest cost                                               0.4           0.4
  Plan amendments                                             -             0.2
  Assumption changes                                          0.6           0.3
  Actuarial loss                                              0.1          (0.3)
  Benefits paid                                              (0.3)         (0.3)
                                                           -------        ------
  Projected benefit obligation at end of year                 7.1           6.0
                                                           -------        ------

Change in Plan Assets
  Fair value of assets at beginning of year                  14.2          17.2
  Actual returns (losses) on plan assets                      3.8          (2.7)
  Benefits paid                                              (0.3)         (0.3)
  Employer contributions                                      0.4           -
                                                           -------        ------
  Fair value of assets at end of year                        18.1          14.2
                                                           -------        ------

Plan assets in excess of projected benefit obligations       11.0           8.2
  Unrecognized prior service cost                             0.6           0.7
  Unrecognized net loss                                       3.2           5.3
                                                           -------        ------
  Net pension asset                                         $14.8         $14.2
                                                           =======        ======

Amounts recognized in the balance sheets consist of:
  Prepaid benefit cost                                      $14.5         $14.1
  Accrued benefit liability                                  (1.0)         (1.2)
  Intangible assets                                           0.3           0.3
  Accumulated other comprehensive income                      1.0           1.0
                                                           -------        ------
                                                            $14.8         $14.2
                                                           =======        ======

         The Company 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, the Company has an
unfunded benefit plan, which provides benefits to certain former employees of
Pnuemo Abex. The projected benefit obligations, after adjusting for prior
service costs, minimum pension liabilities, and unrecognized actuarial gains and
losses for the plans, were $3.4 and $3.0 at December 31, 2003 and 2002,
respectively, and are included in other liabilities.


                                      F-18

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


         Net periodic pension income for the Company'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,
                                                                  ---------------------------------------
                                                                    2003            2002            2001
                                                                  -------         -------          ------
<S>                                                               <C>             <C>              <C>
Service cost - benefits earned during the period                  $  0.2          $  0.2           $ 0.3
Interest cost on projected benefit obligations                       0.4             0.4             1.5
Expected return on plan assets                                      (1.2)           (1.5)           (3.8)
Amortization of prior service costs                                  0.1             0.1             -
Amortization of net (gain) loss                                      0.3             -              (0.1)
                                                                  -------         -------          ------
Net pension income                                                $ (0.2)         $ (0.8)          $(2.1)
                                                                  =======         =======          ======
</TABLE>

         In addition, the Company has a defined contribution 401(k) plan
covering domestic salaried employees. The Company contributes up to 2% of an
employees' salary to this plan, which totaled approximately $0.1 in 2003, 2002
and 2001.

Additional Information

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                -----------------------------
                                                                 2003                  2002
                                                                ------                -------
<S>                                                              <C>                    <C>
Increase in minimum liability included in other
    comprehensive income                                         $0.2                   $0.4
                                                                ======                =======
</TABLE>

Assumptions

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,
                                                                -----------------------------
                                                                 2003                  2002
                                                                ------                -------
<S>                                                              <C>                    <C>
Weighted-average assumptions used to determine
    benefit obligation at year end

    Discount rate                                                6.00%                  6.75%
    Rate of compensation increase                                3.50%                  4.25%
</TABLE>

<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                                     -----------------------------------------
                                                                        2003               2002         2001
                                                                     --------            --------     --------
<S>                                                                    <C>                 <C>          <C>
Weighted-average assumptions used to determine
net periodic benefit cost

    Discount rate                                                      6.75%               7.25%        7.50%
    Expected long term rate of return on plan assets                   8.50%               9.00%        9.50%
    Rate of compensation increase                                      4.25%               5.00%        5.00%
</TABLE>

Discussion of Expected Long Term Rate of Return

         In determining its expected rate of return on the plans' assets, the
Company considered its historical performance, the investment style of the fund
in which it currently invests and the performance of other asset allocation
funds. The historical performance of the plans' assets during the nine-year
period from 1995 through 2003 exceeded the assumed 8.50% rate of return. In
2001, the Company settled pension obligations of certain of its plans in
connection with a plan termination. As a result, invested plans' assets have
been significantly reduced and are now invested in an asset allocation fund.
During the ten-year period from 1994 through 2003, that fund's performance has
exceeded the Company's assumed 8.50% rate of return. The investment performance
of assets with similar investment styles during the same ten-year period also
exceeded the plan's assumed rate of return.


                                      F-19

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


Plan Assets

         The Company's pension plan asset allocations at December 31, 2003 and
2002 by asset category are as follows:

                                                      DECEMBER 31,
                                              -----------------------------
                                                2003                2002
                                              ---------           ---------
Asset Category:
  Equity securities                              78.0%               98.0%
  Fixed income securities                        19.0%               --
  Other                                           3.0%                2.0%
                                              ---------           ---------
    Total                                       100.0%              100.0%
                                              =========           =========
Investment Policy Discussion

         The Plans' investments are designed to meet or exceed the expected rate
of return on plan assets assumption. The Investment Committee has retained a
professional investment consultant as an advisor. Based upon that advice, the
plans' assets are invested in an asset allocation fund which is comprised of
domestic equities, domestic fixed income securities and cash.

Contributions

         The Company currently expects to contribute approximately $0.3 to its
pension plans in 2004 based on current legal requirements. Proposed legislation,
expected to be passed in 2004, would result in lower pension contributions in
2004.

10.      SHORT-TERM BORROWINGS AND DEBT

                                                               DECEMBER 31,
                                                       -------------------------
                                                         2003            2002
                                                       --------         --------
Amended Credit Agreement - Term Loan                     $34.6           $59.7
Other                                                     --               0.7
Less short-term borrowings and current maturities        (19.4)          (25.8)
                                                       --------         --------
Long-term debt                                           $15.2           $34.6
                                                       ========         ========

         On April 19, 2001 (the "Closing Date"), the Company entered into an
Amended and Restated Credit Agreement (the "Amended Credit Agreement") with a
group of banks pursuant to which the Company could borrow up to $105.0. The
Amended Credit Agreement included 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 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. 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). The amount of
excess cash flow payment included in current maturities was $4.3 and $8.7 at
December 31, 2003 and 2002, respectively. 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.

         In connection with the Settlement, Pneumo Abex amended the Amended
Credit Agreement effective December 3, 2002, so that the lenders would: (a)
release all liens in their favor on the Panavision shares held by the Company
and the Notes held by Pneumo Abex and (b) release PVI Acquisition Corporation, a
wholly owned subsidiary of the Company, from all of its obligations and
liabilities under a guarantee and collateral agreement to the Amended Credit
Agreement. In exchange, the parties agreed to: (a) an increase in the borrowing
margin on


                                      F-20

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


ABR Loans and Eurodollar Loans of 0.5% (3.0% on ABR Loans and 4.0% on Eurodollar
Loans at December 31, 2003 and 2002), (b) a mandatory prepayment of $4.4, (c) a
reduction in the revolving commitments by $5.0 and (d) an amendment fee of
approximately $0.3. At December 31, 2003 and 2002, $4.7 and $4.6 of the
revolving loan facility was reserved for lender guarantees on outstanding
letters of credit, respectively. The average interest rate was 5.57% and 5.41%
for the years ended December 31, 2003 and 2002, respectively. 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. Under the Amended Credit
Agreement, Pneumo Abex may not: (a) pay a dividend on, or make a payment on
account of the purchase, redemption or retirement of, or any other distribution
on any shares of any class of its capital stock, (b) loan or advance funds to M
& F Worldwide except for expenses necessary to maintain M & F Worldwide's
corporate existence and other out of pocket expenses in the ordinary course of
business resulting from M & F Worldwide's status as a public company and (c) pay
any management or administrative fee to M & F Worldwide or pay a salary, bonus
or other form of compensation, other than in the ordinary course of business to
any person who is a significant stockholder or executive officer of M & F
Worldwide. The Company had $5.3 and $5.4 of available borrowings under the
revolving loan facility at December 31, 2003 and 2002, respectively.

         Aggregate principal maturities due under the Amended Credit Agreement,
including the excess cash flow payment of $4.3 in April 2004, are as follows:

          2004                         $19.4
          2005                          15.2
                                     --------
                                       $34.6
                                     ========

         The Company's French subsidiary has credit agreements renewable
annually with two banks whereby it may borrow up to 2.9 Euros (approximately
$3.6 at December 31, 2003) for working capital purposes. The amounts borrowed,
which are included in short-term borrowings, were $0.0 and $0.7 at December 31,
2003 and 2002, respectively.

11.      FINANCIAL INSTRUMENTS

         Most of the Company's customers are in the worldwide tobacco industry.
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 $0.3 for each of the years ended
December 31, 2003, 2002 and 2001. Future minimum rental commitments for
operating leases with noncancelable terms in excess of one year from December
31, 2003 are as follows:

          2004                          $0.2
          2005                           0.1
                                      -------
                                        $0.3
                                      =======

         The Company had outstanding letters of credit totaling $4.7 and $4.6 at
December 31, 2003 and 2002, respectively.

                                      F-21

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


         At December 31, 2003, the Company had obligations to purchase
approximately $9.6 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 another subsidiary of M & F
Worldwide entered into a transfer agreement (the "Transfer Agreement"). Under
the Transfer Agreement, Pneumo Abex retained the assets and liabilities relating
to Aerospace, as well as certain contingent liabilities and the related assets,
including its historical insurance and indemnification arrangements. Abex
transferred substantially all of its other assets and liabilities to a
subsidiary of MCG. 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
categories of asbestos-related 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 these
categories of asbestos-related 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 kinds 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 ultimate
responsibility for all the remaining asbestos-related claims asserted against
Pneumo Abex 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
asbestos-related claims asserted against Pneumo Abex after August 1998 and not
indemnified by the Original Indemnitor. 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 Company confirmed that the
Indemnity Guarantor would fulfill the Second Indemnitor's indemnity obligations
to the extent that they are no longer being performed by the Second Indemnitor.
During the third quarter of 2002, the Indemnity Guarantor repaid the Company,
following an arbitration between the Company and the Indemnity Guarantor, $3.5
that the Company had advanced for indemnified matters.

         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 each month for substantially all of its
monthly expenditures for asbestos-related claims. As of December 31, 2003, the
Company incurred or expected to incur approximately $0.5 of unindemnified costs,
as to which it either has received or expects to receive $0.4 in insurance
reimbursements for matters pending or resolved in 2003. Management does not
expect these unindemnified matters to have a material adverse effect on the
Company's financial position or results of operations, but 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

                                      F-22

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

third-party indemnitors or insurers, other than the operations relating to
Pneumo Abex's Aerospace business, which Pneumo Abex 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 are 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 environmental site
subject 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 $100.0.

         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 one site not part of 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 is being funded by MCG and/or the Original Indemnitor. Pneumo
Abex had $2.2 of letters of credit outstanding at both December 31, 2003 and
2002, respectively, in connection with the Reimbursement Agreement.
0
         The Company has not recognized a 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 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. The Company retained in the Aerospace sale certain claims for
allegedly defective pricing made by the government with respect to certain of
these products. During 2003, the Company resolved one of those matters at a cost
of $0.4. In the remaining matter, the Company contests the allegations made by
the government and has been attempting to resolve the matter without litigation.

         In addition, various other legal proceedings, claims and investigations
are pending against the Company, 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
these matters will not have a material adverse effect on the Company's financial
position or results of operations.

FEDERAL-MOGUL BANKRUPTCY

         As noted above in "--Corporate Indemnification Matters," the Second
Indemnitor ceased performing, upon filing its Chapter 11 petition, the indemnity
and other obligations that it owed to Pneumo Abex under the 1994 agreements
entered into in connection with the sale of Pneumo Abex's Friction Products
Division (the "1994 Sale Agreements"). As a result, Pneumo Abex asserted claims
for breach of such indemnity and other obligations, and, in connection with such
breaches, Pneumo Abex asserted its rights of recoupment and setoff (the
"Recoupment/Setoff Claim"), recognized under bankruptcy law, against $5.6 in
insurance reimbursements that came into Pneumo Abex's possession but that Pneumo
Abex would otherwise have been obliged to turn over to the Second Indemnitor
under the 1994 Sale Agreements had the Second Indemnitor continued to perform.
Pending the


                                      F-23

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

resolution of the Recoupment/Setoff Claim, Pneumo Abex recorded in accounts
payable an amount equal to the full value of the claim.

         During December 2003, Pneumo Abex reached an agreement with the Second
Indemnitor and certain other parties, subsequently confirmed by the bankruptcy
court, pursuant to which Pneumo Abex paid to the Second Indemnitor $3.0 in 2004.
Of the remainder it retained, Pneumo Abex paid $0.7 in 2004 to a subsidiary of
MCG in accordance with the Transfer Agreement to reimburse expenses that the
subsidiary incurred on Pneumo Abex's behalf, while procuring the insurance
reimbursements. Pneumo Abex recorded a gain of $1.9 in the fourth quarter of
2003 for amount it retained.

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. The Company included settlement expense in loss from
operations of discontinued business in the accompanying consolidated statements
of income. 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 July 2002, during the trial of the Consolidated Action, the parties
reached a settlement (the "Settlement"). Under the terms of the Settlement,
approved by the Chancery Court, Holdings (i) acquired (a) the Acquired Shares,
(b) the shares of Panavision Series A Preferred Stock that the Company acquired
in December 2001, (c) the Notes that Pneumo Abex acquired in November 2001, and
(d) the Las Palmas Note, and (ii) delivered to the Company $90.1 in cash and all
of the shares of Company's common stock and Series B Preferred Stock that
Holdings had acquired since April 2001. In addition, all agreements entered into
in connection with the Panavision Acquisition and the December 2001 issuance of
Series B Preferred Stock were terminated.

         In a separate agreement contemporaneous with the Settlement, the
Company's insurance carrier agreed to reimburse $2.0 of the amount that the
Company paid in connection with the Vannini settlement, and certain attorneys'
fees and expenses awarded by the court in connection with the Settlement.

         The Company incurred various legal and related costs in connection with
the defense of the shareholder lawsuits that were reimbursed by insurance. The
Company had unreimbursed legal and related expenses of $3.6, which the Company
included in discontinued operations for 2002 and 2001, net, in the accompanying
consolidated statements of income.

         During 2002, the Company's indirect, wholly owned French subsidiary
(the "Indirect Subsidiary") received official notice from the French tax
administration that certain interest payments made on a note payable to the
Company would be disallowed as a deduction in determining French income taxes
for 1996, 1997 and 1998 and have assessed the Indirect Subsidiary approximately
1.8 Euros ($2.2 as of December 31, 2003) for the taxes, interest and penalties.
The Indirect Subsidiary does not agree with the tax authorities' position and is
in the process of appealing the assessment. As part of its appeal, the Indirect
Subsidiary was required to obtain bank guarantees in favor of the French tax
administration in the amount of 1.4 Euros ($1.8 as of December 31, 2003). The
Company believes that the Indirect Subsidiary's position is correct under French
tax regulations and that the Indirect



                                      F-24

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

Subsidiary will prevail in any future negotiation or litigation. In addition,
the Indirect Subsidiary has taken an interest expense deduction on its French
tax return for each completed tax year subsequent to 1998, of which several
years are currently under audit.

13.      RELATED PARTY TRANSACTIONS

         During fiscal 2003, 2002 and 2001, three executive officers of the
Company were executives of Holdings. Such executive officers were not
compensated by the Company. In 2003, the Company paid to Holdings the value of
the services provided by such officers to the Company in the amount of $1.5 and
charged that amount to compensation expense. In 2002 and 2001, because Holdings
did not require payment of this amount, the value of the services of $1.5 per
year is reflected in the accompanying Consolidated Financial Statements as
compensation expense and a corresponding increase to additional paid-in-capital
in accordance with Securities and Exchange Commission Staff Accounting Bulletin
79, "Accounting for Expenses or Liabilities Paid by Principal Stockholder(s)."
None of the executive officers received any payment from the Company or Holdings
in connection with such compensation expense.

         In October 2003, the Company and Holdings executed a new Management
Services Agreement, in which Holdings provides the services of the three
executive officers to the Company in exchange for a management service fee of
$1.5 annually. The Agreement expires on December 31, 2005.

         Included in accounts receivable, net in the consolidated balance sheet
at December 31, 2002 is $3.3 due from Holdings, which Holdings repaid in January
2003.

         The Company participates in Holdings' directors and officers insurance
program, which covers the Company as well as Holdings and its other affiliates.
The limits of coverage are available on aggregate losses to any or all of the
participating companies and their respective directors and officers. The Company
reimburses Holdings for its allocable portion of the premiums for such coverage,
which the Company believes is more favorable than the premiums the Company could
secure were it to secure its own coverage. At December 31, 2003, the Company has
recorded prepaid expenses, other assets, accrued liabilities and other
liabilities of $1.5, $6.0, $2.7 and $2.8 relating to the financing of the
directors and officers insurance program. At December 31, 2002, the Company had
recorded prepaid expenses, other assets, accrued liabilities and other
liabilities of $1.7, $6.7, $3.0 and $5.5 relating to the financing of the
directors and officers insurance program.

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

14.      SIGNIFICANT CUSTOMER

         The Company has a significant customer in the tobacco industry, Altria
Group Inc., which accounted for approximately 35% of the Company's net revenues
in 2003, 33% of net revenues in 2002 and 31% of net revenues in 2001.



                                      F-25

<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)


15.      GEOGRAPHIC AND BUSINESS SEGMENT INFORMATION

         Since the Settlement, the Company has one business segment, which is
the production of licorice flavors used primarily by the tobacco and food
industries. The following table presents geographic information based upon
revenues of the Company's major geographic markets:

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                               -------------------------------------------------
                                                                 2003                2002                2001
                                                               ----------          ---------           ---------
<S>                                                               <C>                <C>                 <C>
Net sales to external customers (a)
       North America (b)                                          $ 81.6             $ 83.8              $ 84.7
       France                                                       14.1               13.1                13.7
                                                               ----------          ---------           ---------
       Total                                                      $ 95.7             $ 96.9              $ 98.4
                                                               ==========          =========           =========

Operating income (loss)
       North America (b)                                          $ 34.6             $ 38.8              $ 33.3
       France                                                        2.7                3.8                 4.4
       Pension reversion gain                                          -                  -                11.1
       Corporate                                                    (1.8)              (2.3)               (3.7)
                                                               ----------          ---------           ---------
         Subtotal                                                   35.5               40.3                45.1

     Corporate expenses                                             (3.4)              (5.2)               (2.8)
                                                               ----------          ---------           ---------

     Operating income                                             $ 32.1             $ 35.1              $ 42.3
                                                               ==========          =========           =========
</TABLE>

(a)  Revenues reported by country of domicile.
(b)  Includes export sales of $29.5, $28.7, and $30.7 in 2003, 2002, and 2001,
     respectively.


<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                               -----------------------------
                                                                 2003                2002
                                                               ----------          ---------
<S>                                                              <C>                <C>
Long lived assets
       North America                                             $ 163.6            $ 165.1
       France                                                       22.4               18.9
       Other, foreign                                                1.4                1.5
       Corporate                                                     8.4                8.9
                                                               ----------          ---------
         Total                                                   $ 195.8            $ 194.4
                                                               ==========          =========
</TABLE>


                                      F-26
<PAGE>


                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

16.      UNAUDITED QUARTERLY FINANCIAL INFORMATION

         The following is a summary of unaudited quarterly financial information
for 2003 and 2002:


<TABLE>
<CAPTION>
                                                                                    2003
                                                               -------------------------------------------------
                                                                 FIRST       SECOND        THIRD        FOURTH
                                                               ----------   ----------    ---------    ---------
<S>                                                               <C>          <C>          <C>          <C>
Net revenues                                                      $ 24.9       $ 25.5       $ 22.7       $ 22.6
Gross profit                                                        12.3         13.5         11.4         12.2
Income from continuing operations                                    7.4          8.3          7.8          9.6
Gain from discontinued operations, net of taxes                        -            -          0.6            -
Net income                                                           4.4          5.1          7.7          6.0

Income per common share:
     Basic:
        Continuing operations                                     $ 0.25       $ 0.28       $ 0.38       $ 0.32
        Discontinued operations                                        -            -         0.04            -
                                                               ----------   ----------    ---------    ---------
        Total                                                     $ 0.25       $ 0.28       $ 0.42       $ 0.32
                                                               ==========   ==========    =========    =========

     Diluted:
        Continuing operations                                     $ 0.24       $ 0.27       $ 0.37       $ 0.30
        Discontinued operations                                        -            -         0.03            -
                                                               ----------   ----------    ---------    ---------
        Total                                                     $ 0.24       $ 0.27       $ 0.40       $ 0.30
                                                               ==========   ==========    =========    =========

                                                                                    2002
                                                               -------------------------------------------------
                                                                 FIRST       SECOND        THIRD        FOURTH
                                                               ----------   ----------    ---------    ---------

Net revenues                                                      $ 25.6       $ 26.0       $ 22.1       $ 23.2
Gross profit                                                        12.6         13.8         10.8         12.4
Income from continuing operations                                    4.9          4.6          4.5          4.6
(Loss) gain from discontinued operations, net of taxes (a)          (3.0)        (4.9)        (2.5)        15.9
Net income (loss)                                                    1.9         (0.3)         2.0         20.5

Income (loss) per common share:
     Basic and diluted:
        Continuing operations                                     $ 0.19       $ 0.17       $ 0.16       $ 0.19
        Discontinued operations                                    (0.11)       (0.18)       (0.09)        0.66
                                                               ----------   ----------    ---------    ---------
        Total                                                     $ 0.08       $(0.01)      $ 0.07       $ 0.85
                                                               ==========   ==========    =========    =========
</TABLE>

         Certain amounts previously reported have been reclassified to conform
to the December 31, 2003 presentation.

(a) Includes gain on disposal of discontinued business of $17.6 in the fourth
    quarter of 2002.

                                      F-27



<PAGE>

                     M & F WORLDWIDE CORP. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                  (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

17.      EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31,
                                                                    ------------------------------------------------
                                                                      2003               2002                2001
                                                                    ---------          ----------          ---------
<S>                                                                   <C>                 <C>                <C>
Numerator:
     Income from continuing operations                                $ 22.6              $ 18.6             $ 18.4
     Gain (loss) from discontinued operations, net of taxes (a)          0.6                 5.5              (12.3)
                                                                    ---------          ----------          ---------
     Net income                                                         23.2                24.1                6.1
     Preferred stock dividends                                             -                (0.3)              (0.2)
                                                                    ---------          ----------          ---------
Numerator for basic earnings per share:
     Income available to common stockholders                          $ 23.2              $ 23.8              $ 5.9
                                                                    =========          ==========          =========

Numerator for diluted earning per share:
       Net income                                                     $ 23.2              $ 24.1              $ 6.1
                                                                    =========          ==========          =========

Denominator (shares in millions):
     Basic earnings per share-weighted average shares
       Common                                                           18.2                19.5               20.0
       Preferred - participating                                           -                 6.3                4.3
                                                                    ---------          ----------          ---------
Denominator for basic earnings per share                                18.2                25.8               24.3
     Effect of dilutive securities:
       Employee stock options                                            0.9                 0.2                  -
                                                                    ---------          ----------          ---------
Denominator for diluted earnings per share                              19.1                26.0               24.3
                                                                    =========          ==========          =========

Basic earnings (loss) per common share:
     Undistributed earings from continuing operations                 $ 1.23              $ 0.71             $ 0.74
     Undistributed earings (loss) from discontinued operations          0.04                0.21              (0.50)
                                                                    ---------          ----------          ---------
        Total common stock                                            $ 1.27              $ 0.92             $ 0.24
                                                                    =========          ==========          =========

Diluted earnings (loss) per common share:
     Undistributed earings from continuing operations                 $ 1.18              $ 0.71             $ 0.74
     Undistributed earings (loss) from discontinued operations          0.03                0.21              (0.50)
                                                                    ---------          ----------          ---------
        Total common stock                                            $ 1.21              $ 0.92             $ 0.24
                                                                    =========          ==========          =========

Basic and diluted earnings (loss) per preferred share:
     Distributed earnings                                                $ -              $ 0.04             $ 0.05
     Undistributed earings from continuing operations                      -                0.71               0.74
     Undistributed earings (loss) from discontinued operations             -                0.21              (0.50)
                                                                    ---------          ----------          ---------
        Total preferred stock                                            $ -              $ 0.96             $ 0.29
                                                                    =========          ==========          =========
</TABLE>

(a) includes gain on sale of discontinued business of $17.6 in 2002.


                                      F-28


<PAGE>

           Schedule I - Condensed Financial Information of Registrant

                          Balance Sheets (Parent Only)
                      (in millions, except per share data)

<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                            ----------------------------
                                                                                               2003            2002
                                                                                            ------------    ------------
                                                         ASSETS
<S>                                                                                              <C>             <C>
Current assets:
     Cash and cash equivalents                                                                   $ 90.0          $ 88.9
     Accounts receivable                                                                              -             0.2
     Prepaid expenses and other current assets                                                      1.3             1.6
                                                                                            ------------    ------------
          Total current assets                                                                     91.3            90.7

Investment in subsidiaries                                                                        215.5           185.9
Other assets                                                                                        6.5             5.2
                                                                                            ------------    ------------
                                                                                                $ 313.3         $ 281.8
                                                                                            ============    ============

                                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                                             $ 1.6           $ 1.8
     Accrued expenses                                                                               0.2             0.3
     Payable to subsidiaries                                                                        5.2             2.4
                                                                                            ------------    ------------
          Total current liabilities                                                                 7.0             4.5

Other liabilities                                                                                   1.6             3.2
Stockholders' equity:
     Common stock, par value $.01; 250,000,000 shares authorized; 20,928,704 and
          20,663,171 shares issued at December 31, 2003
          and 2002, respectively                                                                    0.2             0.2
     Additional paid-in capital                                                                    31.5            29.4
     Treasury stock at cost
          2,541,900 shares at December 31, 2003 and 2002                                          (14.8)          (14.8)
     Retained earnings                                                                            288.3           265.1
     Accumulated other comprehensive loss                                                          (0.5)           (5.8)
                                                                                            ------------    ------------
               Total stockholders' equity                                                         304.7           274.1
                                                                                            ------------    ------------
                                                                                                $ 313.3         $ 281.8
                                                                                            ============    ============
</TABLE>


                                      F-29


<PAGE>


           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                 CONSOLIDATED STATEMENTS OF INCOME (PARENT ONLY)
                      (IN MILLIONS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                  ----------------------------------------------
                                                                                     2003             2002             2001
                                                                                  ------------     ------------     ------------
<S>                                                                                     <C>              <C>              <C>
General and administrative expenses                                                     $ 3.3            $ 3.6            $ 2.8
                                                                                  ------------     ------------     ------------
          Operating loss                                                                  3.3              3.6              2.8
Interest, investment and other income, net                                               (0.8)            (0.1)            (0.3)
                                                                                  ------------     ------------     ------------
          Loss from continuing operations before taxes                                    2.5              3.5              2.5
Benefit from income taxes                                                                (0.9)            (1.2)            (0.9)
                                                                                  ------------     ------------     ------------
          Loss from continuing operations                                                 1.6              2.3              1.6
(Gain) loss from discontinued business, net of taxes
  (including gain on disposal of $17.6 in 2002)                                          (0.6)            (5.5)            12.3
Equity in income of subsidiaries                                                        (24.2)           (20.9)           (20.0)
                                                                                  ------------     ------------     ------------
          Net income                                                                     23.2             24.1              6.1
Preferred stock dividends                                                                   -             (0.3)            (0.2)
                                                                                  ------------     ------------     ------------
          Net income available to common stockholders                                  $ 23.2           $ 23.8            $ 5.9
                                                                                  ============     ============     ============
</TABLE>


                                      F-30

<PAGE>


           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

               CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENT ONLY)
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                                                  YEAR ENDED DECEMBER 31,
                                                                                        -------------------------------------------
                                                                                           2003           2002            2001
                                                                                        ------------   ------------   -------------
<S>                                                                                          <C>            <C>              <C>
OPERATING ACTIVITIES
Net income                                                                                   $ 23.2         $ 24.1           $ 6.1
Adjustments to reconcile net income to total cash provided by
   operating activities:
         Equity in income of subsidiaries (in excess of) / less than cash distributions       (24.2)         (26.8)           90.8
         Compensation expense paid by principal stockholder                                       -            1.5             1.5
Changes in assets and liabilities:
         Receivable from/payables to subsidaries                                                2.8            1.3             2.1
         Other, net                                                                            (2.6)           0.7            (4.5)
                                                                                        ------------   ------------   -------------
         Cash (used in) provided by operating activities                                        (0.8)           0.8            96.0
                                                                                        ------------   ------------   -------------

INVESTING ACTIVITIES
Disposition (acquisition) of Panavision and EFILM                                                 -           85.7           (86.6)
                                                                                        ------------   ------------   -------------
         Cash provided by (used in) investing activities                                          -           85.7           (86.6)
                                                                                        ------------   ------------   -------------

FINANCING ACTIVITIES
Repurchase of common stock                                                                        -              -            (6.5)
Preferred stock dividends paid                                                                    -           (0.4)           (0.1)
Proceeds from stock options exercised                                                           1.9
                                                                                        ------------   ------------   -------------
          Cash provided by (used  in) financing activities                                      1.9           (0.4)           (6.6)
                                                                                        ------------   ------------   -------------

Net increase in cash and cash equivalents                                                       1.1           86.1             2.8
Cash and cash equivalents at beginning of period                                               88.9            2.8               -
                                                                                        ------------   ------------   -------------
Cash and cash equivalents at end of period                                                   $ 90.0         $ 88.9           $ 2.8
                                                                                        ============   ============   =============
</TABLE>

                                      F-31

<PAGE>

          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, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
                                                                BEGINNING        AMOUNTS         BALANCE          ENDING
                                                                 BALANCE         RESERVED        WRITTEN OFF     BALANCE
                                                               -------------------------------------------------------------
Allowance for Doubtful Accounts
-------------------------------
<S>                                                                   <C>             <C>               <C>           <C>
December 31, 2003                                                     $ 0.1           $ 0.1             $ -           $ 0.2
December 31, 2002                                                     $ 0.3             $ -           $ 0.2           $ 0.1
December 31, 2001                                                     $ 0.2           $ 0.1             $ -           $ 0.3
</TABLE>



                                      F-32