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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2003

OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | 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 333-62989

CDRJ INVESTMENTS (LUX) S.A.




(Exact name of Registrant as specified in its charter)


|                                |  |                       
|------------------------------- |  | ----------------------
|Luxembourg                      |  | 98-0185444            
|(State or other jurisdiction of |  | (I.R.S. Employer      
|incorporation or organization)  |  | Identification Number)

174 Route de Longwy
L-1941 Luxembourg
Luxembourg
(Address, including zip code, of registrants principal executive offices)

(352) 226027
(Registrants telephone number, including area code)

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 3 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES o NO x

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). YES
o NO x

The registrant does not have a class of equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934 and there is no
public market for voting stock of the registrant.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date.

Common stock, par value $2.00 per share, outstanding at May 2, 2003
831,888 shares



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TABLE OF CONTENTS



|                              |                                                                                               |                                            |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME         
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                              |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME         
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                              |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME         
|                              |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                              | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 2. Changes in Securities and Use of Proceeds                                            
|                              | Item 3. Defaults Upon Senior Securities                                                      
|                              | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                              | Item 5. Other Information                                                                    
|                              | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURE                    
|CERTIFICATIONS               
|EXHIBIT 3.15                 
|EXHIBIT 3.16                 



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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES

Index to Financial Statements and Exhibits

Filed with the Quarterly Report of the Company on Form 10-Q

For the Three Months Ended March 31, 2003

|                               |  |                                                                                                  |  |         
|------------------------------ |  | ------------------------------------------------------------------------------------------------ |  | --------
|                               |  |                                                                                                  |  | Page No.
|                               |  |                                                                                                  |  |         
|PART I - FINANCIAL INFORMATION |  |                                                                                                 
|Item 1. (*)                    |  | Financial Statements (Unaudited):                                                                |  |         
|                               |  | Consolidated Financial Statements  CDRJ Investments
(Lux) S.A. and Subsidiaries                 |  |         
|                               |  | Consolidated Balance Sheets                                                                      |  | 3       
|                               |  | Consolidated Statements of Income                                                                |  | 4       
|                               |  | Consolidated Statements of Cash Flows                                                            |  | 5       
|                               |  | Notes to Consolidated Financial Statements                                                       |  | 6       
|                               |  | Consolidated Financial Statements  Jafra Cosmetics
International, Inc. and Subsidiaries         |  |         
|                               |  | Consolidated Balance Sheets                                                                      |  | 11      
|                               |  | Consolidated Statements of Income                                                                |  | 12      
|                               |  | Consolidated Statements of Cash Flows                                                            |  | 13      
|                               |  | Notes to Consolidated Financial Statements                                                       |  | 14      
|                               |  | Consolidated Financial Statements  Jafra Cosmetics
International,
S.A. de C.V. and Subsidiaries |  |         
|                               |  | Consolidated Balance Sheets                                                                      |  | 18      
|                               |  | Consolidated Statements of Income                                                                |  | 19      
|                               |  | Consolidated Statements of Cash Flows                                                            |  | 20      
|                               |  | Notes to Consolidated Financial Statements                                                       |  | 21      
|Item 2.                        |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations            |  | 25      
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                                       |  | 32      
|Item 4.                        |  | Controls and Procedures                                                                          |  | 34      
|PART II - OTHER INFORMATION    |  |                                                                                                 
|Item 1.                        |  | Legal Proceedings                                                                                |  | 35      
|Item 2.                        |  | Changes in Securities and Use of Proceeds                                                        |  | 35      
|Item 3.                        |  | Defaults Upon Senior Securities                                                                  |  | 35      
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                              |  | 35      
|Item 5.                        |  | Other Information                                                                                |  | 35      
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                                 |  | 35      
|                               |  | Signature                                                                                        |  | 36      
|                               |  | Certifications                                                                                   |  | 37      

*  Jafra S.A. and JCI have fully and unconditionally guaranteed the obligations
under the Notes of the other on a senior subordinated basis, subject to a
30-day standstill period prior to enforcement of such guarantees. As such, the
Parent is filing separate financial statements of JCI and Jafra S.A. in its
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003.

3



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PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

|                                     |                                                                                                                      |                            |        |             |         |              |        |         |         | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------ | ----------- | ------- | ------------ | ------ | ------- | ------- | 
|                                     |                                                                                                                      |                            |        | March 31,   |         | December 31,
|                                     |                                                                                                                      |                            |        | 2003        |         | 2002        
|                                     |                                                                                                                      |                            |        |             |         |             
|                                     |                                                                                                                      |                            |        | (Unaudited) |         |              |        |        
|ASSETS                               |                                                                                                                      |                            |        |             |         |              |        |        
|Current assets:                      |                                                                                                                      |                            |        |             |         |              |        |        
|                                     | Cash and cash equivalents                                                                                            |                            | $      | 25,701      |         |              | $      | 27,206  |        
|                                     | Receivables, net                                                                                                     |                            |        | 38,911      |         |              |        | 41,126  |        
|                                     | Inventories                                                                                                          |                            |        | 37,266      |         |              |        | 35,286  |        
|                                     | Prepaid income taxes                                                                                                 |                            |        | 87          |         |              |        | 258     |        
|                                     | Prepaid expenses and other current assets                                                                            |                            |        | 4,942       |         |              |        | 4,977   |        
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total current assets       |        |             | 106,907 |              |        |         | 108,853 | 
|Property and equipment, net          |                                                                                                                      |                            | 59,208 |             |         |              | 60,722 |        
|Other assets:                        |                                                                                                                      |                            |        |             |         |              |        |        
|                                     | Goodwill                                                                                                             |                            |        | 65,097      |         |              |        | 66,305  |        
|                                     | Trademarks                                                                                                           |                            |        | 42,963      |         |              |        | 44,570  |        
|                                     | Deferred financing fees and other, net                                                                               |                            |        | 7,471       |         |              |        | 7,840   |        
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total                      |        | $           | 281,646 |              |        | $       | 288,290 | 
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                      |                            |        |             |         |              |        |        
|Current liabilities:                 |                                                                                                                      |                            |        |             |         |              |        |        
|                                     | Current portion of long-term debt                                                                                    |                            | $      | 6,717       |         |              | $      | 6,489   |        
|                                     | Accounts payable                                                                                                     |                            |        | 19,069      |         |              |        | 18,636  |        
|                                     | Accrued liabilities                                                                                                  |                            |        | 38,873      |         |              |        | 44,824  |        
|                                     | Income taxes payable                                                                                                 |                            |        | 5,437       |         |              |        | 4,939   |        
|                                     | Deferred income taxes                                                                                                |                            |        | 2,199       |         |              |        | 2,073   |        
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total current liabilities  |        |             | 72,295  |              |        |         | 76,961  | 
|Long-term debt                       |                                                                                                                      |                            | 76,489 |             |         |              | 77,894 |        
|Deferred income taxes                |                                                                                                                      |                            | 20,588 |             |         |              | 21,186 |        
|Other long-term liabilities          |                                                                                                                      |                            | 4,016  |             |         |              | 3,787  |        
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total liabilities          |        |             | 173,388 |              |        |         | 179,828 | 
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|Commitments and contingencies        |                                                                                                                      |                            |       |             |         |              |       |        
|Stockholders equity:                |                                                                                                                      |                            |        |             |         |              |        |        
|                                     | Common stock, par value $2.00; authorized, 1,020,000 shares;
issued and outstanding, 831,888 shares in 2003 and 2002 |                            |        | 1,664       |         |              |        | 1,664   |        
|                                     | Additional paid-in capital                                                                                           |                            |        | 81,921      |         |              |        | 81,921  |        
|                                     | Retained earnings                                                                                                    |                            |        | 39,667      |         |              |        | 37,145  |        
|                                     | Accumulated other comprehensive loss                                                                                 |                            |        | (14,994     | )       |              |        | (12,268 | )      
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total stockholders equity |        |             | 108,258 |              |        |         | 108,462 | 
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        
|                                     |                                                                                                                      | Total                      |        | $           | 281,646 |              |        | $       | 288,290 | 
|                                     |                                                                                                                      |                            |        |             |         |              |        |         |        

See accompanying notes to consolidated financial statements

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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)

|                                                                      |                           |   |                    |        |      |   |        |        |  
|--------------------------------------------------------------------- | ------------------------- | - | ------------------ | ------ | ---- | - | ------ | ------ | -
|                                                                      |                           |   | Three Months Ended
|                                                                      |                           |   | March 31,         
|                                                                      |                           |   |                   
|                                                                      |                           |   | 2003               |        | 2002
|                                                                      |                           |   |                    |        |     
|Net sales                                                             |                           | $ | 91,400             |        |      | $ | 99,104 |       
|Cost of sales                                                         |                           |   | 21,925             |        |      |   | 22,998 |       
|                                                                      |                           |   |                    |        |      |   |        |       
|                                                                      | Gross profit              |   |                    | 69,475 |      |   |        | 76,106 |  
|Selling, general and administrative expenses                          |                           |   | 59,062             |        |      |   | 60,362 |       
|Restructuring and impairment charges                                  |                           |   | 565                |        |      |   |       |       
|                                                                      |                           |   |                    |        |      |   |        |       
|                                                                      | Income from operations    |   |                    | 9,848  |      |   |        | 15,744 |  
|Other income (expense):                                               |                           |   |                    |        |      |   |        |       
|                                                                      | Exchange (loss) gain, net |   |                    | (940   | )    |   |        | 486    |  
|                                                                      | Interest expense, net     |   |                    | (2,580 | )    |   |        | (2,931 | )
|                                                                      | Other, net                |   |                    | (38    | )    |   |        | 10     |  
|                                                                      |                           |   |                    |        |      |   |        |       
|Income before income taxes and
cumulative effect of accounting change |                           |   | 6,290              |        |      |   | 13,309 |       
|Income tax expense                                                    |                           |   | 3,768              |        |      |   | 3,164  |       
|                                                                      |                           |   |                    |        |      |   |        |       
|Income before cumulative effect of accounting change                  |                           |   | 2,522              |        |      |   | 10,145 |       
|Cumulative effect of accounting change                                |                           |   |                   |        |      |   | (244   | )     
|                                                                      |                           |   |                    |        |      |   |        |       
|Net income                                                            |                           | $ | 2,522              |        |      | $ | 9,901  |       
|                                                                      |                           |   |                    |        |      |   |        |       

See accompanying notes to consolidated financial statements

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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |        |         |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | --------------------------------------------------- | ------ | ------------------ | ------ | ----- | ------ | ------ | ------- | -
|                                                     |                                                                                                                             |                                                        |                                                     |        | Three Months Ended
|                                                     |                                                                                                                             |                                                        |                                                     |        | March 31,         
|                                                     |                                                                                                                             |                                                        |                                                     |        |                   
|                                                     |                                                                                                                             |                                                        |                                                     |        | 2003               |        | 2002 
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |      
|Cash flows from operating activities:                |                                                                                                                             |                                                        |                                                     |        |                    |        |       |       
|                                                     | Net income                                                                                                                  |                                                        | $                                                   | 2,522  |                    |        | $     | 9,901  |       
|                                                     |                                                                                                                             | Cumulative effect of accounting change                 |                                                     |        |                   |        |       |        | 244    |        
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|                                                     | Income before cumulative effect of accounting change                                                                        |                                                        |                                                     | 2,522  |                    |        |       | 10,145 |       
|                                                     | Adjustments to reconcile income before cumulative effect of accounting change
to net cash provided by operating activities: |                                                        |                                                     |        |                    |        |       |        |       
|                                                     |                                                                                                                             | Gain on sale of property and equipment                 |                                                     |        |                   |        |       |        | (43    | )      
|                                                     |                                                                                                                             | Depreciation and amortization                          |                                                     |        | 1,490              |        |       |        | 1,143  |        
|                                                     |                                                                                                                             | Amortization of deferred financing fees                |                                                     |        | 330                |        |       |        | 364    |        
|                                                     |                                                                                                                             | Provision for uncollectible accounts receivable        |                                                     |        | 2,395              |        |       |        | 2,343  |        
|                                                     |                                                                                                                             | Asset impairment charge                                |                                                     |        | 251                |        |       |        |       |        
|                                                     |                                                                                                                             | Unrealized foreign exchange and derivative loss (gain) |                                                     |        | 1,741              |        |       |        | (789   | )      
|                                                     |                                                                                                                             | Deferred realized foreign exchange loss                |                                                     |        | 669                |        |       |        | 21     |        
|                                                     |                                                                                                                             | Deferred income taxes                                  |                                                     |        |                   |        |       |        | (2,417 | )      
|                                                     |                                                                                                                             | Changes in operating assets and liabilities:           |                                                     |        |                    |        |       |        |        |        
|                                                     |                                                                                                                             |                                                        | Receivables                                         |        |                    | (1,581 | )     |        |        | (6,657  | )
|                                                     |                                                                                                                             |                                                        | Inventories                                         |        |                    | (2,730 | )     |        |        | 1,303   |  
|                                                     |                                                                                                                             |                                                        | Prepaid expenses and other current assets           |        |                    | (115   | )     |        |        | 1,334   |  
|                                                     |                                                                                                                             |                                                        | Other assets                                        |        |                    | 193    |       |        |        | 1,067   |  
|                                                     |                                                                                                                             |                                                        | Accounts payable and accrued liabilities            |        |                    | (3,927 | )     |        |        | (11,241 | )
|                                                     |                                                                                                                             |                                                        | Income taxes payable/prepaid                        |        |                    | 881    |       |        |        | 3,294   |  
|                                                     |                                                                                                                             |                                                        | Other long-term liabilities                         |        |                    | 229    |       |        |        | 245     |  
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|                                                     |                                                                                                                             |                                                        | Net cash provided by operating activities           |        |                    | 2,348  |       |        |        | 112     |  
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|Cash flows from investing activities:                |                                                                                                                             |                                                        |                                                     |        |                    |        |       |       
|                                                     | Proceeds from sale of property and equipment                                                                                |                                                        |                                                     |       |                    |        |       | 183    |       
|                                                     | Purchases of property and equipment                                                                                         |                                                        |                                                     | (1,530 | )                  |        |       | (1,995 | )     
|                                                     | Other                                                                                                                       |                                                        |                                                     | (235   | )                  |        |       | (275   | )     
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|                                                     |                                                                                                                             |                                                        | Net cash used in investing activities               |        |                    | (1,765 | )     |        |        | (2,087  | )
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|Cash flows from financing activities:                |                                                                                                                             |                                                        |                                                     |        |                    |        |       |       
|                                                     | Repayments under term loan facility                                                                                         |                                                        |                                                     | (1,000 | )                  |        |       | (1,375 | )     
|                                                     | Net borrowings under revolving credit facility                                                                              |                                                        |                                                     |       |                    |        |       | 7,200  |       
|                                                     | Net repayments under bank debt                                                                                              |                                                        |                                                     | (177   | )                  |        |       | (122   | )     
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|                                                     |                                                                                                                             |                                                        | Net cash (used in) provided by financing activities |        |                    | (1,177 | )     |        |        | 5,703   |  
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|Effect of exchange rate changes on cash              |                                                                                                                             |                                                        | (911                                                | )      |                    |        | (712  | )     
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|Net (decrease) increase in cash and cash equivalents |                                                                                                                             |                                                        | (1,505                                              | )      |                    |        | 3,016 |       
|Cash and cash equivalents at beginning of period     |                                                                                                                             |                                                        | 27,206                                              |        |                    |        | 6,748 |       
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       
|Cash and cash equivalents at end of period           |                                                                                                                             | $                                                      | 25,701                                              |        |                    | $      | 9,764 |       
|                                                     |                                                                                                                             |                                                        |                                                     |        |                    |        |       |        |       

See accompanying notes to consolidated financial statements

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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


(1) Basis of Presentation

The unaudited interim consolidated financial statements of CDRJ
Investments (Lux) S.A., a Luxembourg société anonyme, (the Parent) and
subsidiaries (together with the Parent, the Company) as of March 31, 2003 and
for the three months ended March 31, 2003 and 2002 have been prepared in
accordance with Article 10 of the Securities and Exchange Commissions
Regulation S-X. In the opinion of management, the accompanying unaudited
interim financial statements contain all adjustments, including normal
recurring adjustments, necessary to present fairly the Companys consolidated
financial statements as of March 31, 2003 and for the interim periods
presented. All significant intercompany accounts and transactions have been
eliminated in consolidation.

The Parent, a Luxembourg société anonyme, Jafra Cosmetics International,
Inc., a Delaware corporation (JCI), Jafra Cosmetics International, S.A. de
C.V., a sociedad anonima de capital variableorganized under the laws of the
United Mexican States (Jafra S.A.), and certain other subsidiaries of the
Parent were organized by Clayton, Dubilier & Rice Fund V Limited Partnership, a
Cayman Islands exempted limited partnership managed by Clayton, Dubilier &
Rice, Inc. (CD&R), to acquire (the Acquisition) the worldwide Jafra
Cosmetics business (the Jafra Business). JCI and Jafra S.A. are indirect
wholly-owned subsidiaries of the Parent. The Parent is a holding company that
conducts all its operations through its subsidiaries.

The functional currency of certain of the Companys foreign subsidiaries
generally consists of currencies other than the U.S. dollar. For presentation
purposes, assets and liabilities are translated into U.S. dollars at current
exchange rates, and related revenues and expenses are translated at average
exchange rates in effect during the period. Resulting translation adjustments
are recorded as a component of other comprehensive loss.

Management Incentive Arrangements. The Company applies Accounting principles
Board Opinion No. 25, Accounting for Stock issued to Employees and related
Interpretations in accounting for the issuance of stock options under the
Companys Stock Incentive Plan. No options were granted during the three
months ended March 31, 2003. Had the Company recorded compensation cost based
on the fair value of options granted at the grant date, as prescribed by
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock Based Compensation, the compensation expense for the three months ended
March 31, 2003 and 2002 would be immaterial to the consolidated statements of
income.

New Accounting Pronouncements.The Company adopted SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections on January 1, 2003.
This statement rescinds
or modifies existing authoritative pronouncements including SFAS No. 4
Reporting Gains and Losses from Extinguishment of Debt. As a result of the
issuance of SFAS No. 145, gains and losses from extinguishment of debt are
classified as extraordinary items only if they meet the criteria in Accounting
Principles Board (APB) Opinion 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
Applying the provisions of APB Opinion 30 distinguishes transactions that are
part of an entitys recurring operations from those that are unusual or
infrequent or that meet the criteria for classification as an extraordinary
item. Based on the adoption of this principle, the Company will reclassify any
gain or loss on extinguishment of debt that was classified as an extraordinary
item in prior periods presented that does not meet the criteria in APB Opinion
30 for classification as an extraordinary item.

The Company adopted SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities on January 1, 2003 which did
not result in any material impact to
the Companys consolidated statements of income. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.

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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

(2) Inventories

Inventories consist of the following (in thousands):

|                           |  |           |        |              |  |   |        | 
|-------------------------- |  | --------- | ------ | ------------ |  | - | ------ | 
|                           |  | March 31, |        | December 31,
|                           |  | 2003      |        | 2002        
|                           |  |           |        |             
|Raw
materials and supplies |  | $         | 5,549  |              |  | $ | 5,239  | 
|Finished goods             |  |           | 31,717 |              |  |   | 30,047 | 
|                           |  |           |        |              |  |   |        | 
|Total inventories          |  | $         | 37,266 |              |  | $ | 35,286 | 
|                           |  |           |        |              |  |   |        | 

(3) Property and Equipment

Property and equipment consist of the following (in thousands):

|                               |  |           |        |              |  |   |        | 
|------------------------------ |  | --------- | ------ | ------------ |  | - | ------ | 
|                               |  | March 31, |        | December 31,
|                               |  | 2003      |        | 2002        
|                               |  |           |        |             
|Land                           |  | $         | 16,077 |              |  | $ | 16,448 | 
|Buildings                      |  |           | 17,072 |              |  |   | 17,452 | 
|Machinery, equipment and other |  |           | 42,187 |              |  |   | 42,153 | 
|                               |  |           |        |              |  |   |        | 
|                               |  |           | 75,336 |              |  |   | 76,053 | 
|Less accumulated depreciation  |  |           | 16,128 |              |  |   | 15,331 | 
|                               |  |           |        |              |  |   |        | 
|Property and equipment, net    |  | $         | 59,208 |              |  | $ | 60,722 | 
|                               |  |           |        |              |  |   |        | 



|(4) |  | Goodwill and Other Intangible Assets.
|--- |  | -------------------------------------

The
Companys intangible assets consist of trademarks and goodwill. The
Company has determined trademarks to have an indefinite life. The carrying
value of trademarks was $42,963,000 as of March 31, 2003. The changes in the
carrying amount of goodwill for the three months ended March 31, 2003 are as
follows (in thousands):

|                                |  |        |        |        |  |        |        |        |  |       |       |     |  |              |     |   |  |   |        |  
|------------------------------- |  | ------ | ------ | ------ |  | ------ | ------ | ------ |  | ----- | ----- | --- |  | ------------ | --- | - |  | - | ------ | -
|                                |  | United |        |        |  |        |        |        |  |       |       | All |  | Consolidated
|Goodwill                        |  | States |        | Mexico |  | Europe |        | Others |  | Total
|                                |  |        |        |        |  |        |        |        |  |      
|Balance as of December 31, 2002 |  | $      | 32,188 |        |  | $      | 28,548 |        |  | $     | 5,300 |     |  | $            | 269 |   |  | $ | 66,305 |  
|Translation effect              |  |        |       |        |  |        | (1,034 | )      |  |       | (157  | )   |  |              | (17 | ) |  |   | (1,208 | )
|                                |  |        |        |        |  |        |        |        |  |       |       |     |  |              |     |   |  |   |        |  
|Balance as of March 31, 2003    |  | $      | 32,188 |        |  | $      | 27,514 |        |  | $     | 5,143 |     |  | $            | 252 |   |  | $ | 65,097 |  
|                                |  |        |        |        |  |        |        |        |  |       |       |     |  |              |     |   |  |   |        |  

(5) Income Taxes

The actual income tax rate of the Company differs from the expected tax
rate, computed by applying the U.S. federal corporate rate of 35% to income
before income taxes, for the three months ended March 31, 2003 principally as
the result of (i) state income tax, (ii) valuation allowances against certain
operating losses in South America and Europe and (iii) a higher effective tax
rate in the Companys Mexico subsidiary. The actual income tax rate of the
Company differs from the expected tax rate for the three months ended March
31, 2002, principally as a result of (i) a lower effective tax rate in the
Mexico entity, Jafra S.A., as the result of the enactment of changes in
Mexicos future corporate statutory tax rates and the related impact on Jafra
S.A.s net deferred income tax liabilities of $1,167,000 and (ii) the release
of valuation allowances of $1,250,000 against certain foreign tax credits in
the United States. These were offset by state income taxes in the United
States and valuation allowances provided against certain operating losses in
South America and Europe. The enactment in Mexico reduced the Mexico corporate
income tax rate annually in one-percent increments from 35% in 2002 to 32% in
2005.

7



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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

(6) Comprehensive Income (Loss)

Comprehensive income (loss) is summarized as follows (in thousands):

|                                                                                     |  |                    |        |      |  |   |        |  
|------------------------------------------------------------------------------------ |  | ------------------ | ------ | ---- |  | - | ------ | -
|                                                                                     |  | Three Months Ended
|                                                                                     |  | March 31,         
|                                                                                     |  |                   
|                                                                                     |  | 2003               |        | 2002
|                                                                                     |  |                    |        |     
|Net income                                                                           |  | $                  | 2,522  |      |  | $ | 9,901  |  
|Unrealized and deferred realized (loss) gain on derivatives                          |  |                    | 355    |      |  |   | (2,195 | )
|Reclassification of deferred realized (loss) gain to
exchange (loss) gain            |  |                    | (550   | )    |  |   | 135    |  
|Reclassification of deferred realized loss to cost
of sales                          |  |                    | 678    |      |  |   | 937    |  
|Tax (benefit) expense on unrealized and deferred realized
(loss) gain on derivatives |  |                    | (75    | )    |  |   | 393    |  
|Foreign currency translation adjustments                                             |  |                    | (3,134 | )    |  |   | (27    | )
|                                                                                     |  |                    |        |      |  |   |        |  
|Comprehensive income (loss)                                                          |  | $                  | (204   | )    |  | $ | 9,144  |  
|                                                                                     |  |                    |        |      |  |   |        |  

(7) Financial Reporting for Business Segments

The Companys business is comprised of one industry segment, direct
selling, with worldwide operations. The Company is organized into geographical
business units that each sell the full line of Jafra cosmetics, skin care, body
care, fragrances, and other products. Jafra has three reportable business
segments: Mexico, the United States, and Europe. Business results for
subsidiaries in South America, the Dominican Republic, and Thailand are
combined and included in the following table under the caption All Others.

The accounting policies used to prepare the information reviewed by the
Companys chief operating decision makers are the same as those described in
the summary of significant accounting policies included in the Companys
audited consolidated financial statements as of and for the year ended December
31, 2002 included in the Companys Annual Report on Form 10-K. The Company
evaluates performance based on segment operating income, excluding
restructuring and impairment charges, unusual gains and losses, and
amortization of goodwill and intangibles. Consistent with the information
reviewed by the Companys chief operating decision makers, corporate costs,
foreign exchange gains and losses, interest expense, other nonoperating income
or expense, and income taxes are not allocated to operating segments for
purposes of this presentation. The effects of intersegment sales (net sales
and related gross profit) are excluded from the related captions below and from
the computation of segment operating income.

|                                                    |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  |            |        |   |  |   |         | 
|--------------------------------------------------- |  | -------------- | ------- | ------ |  | ------ | ------ | ------ |  | -------- | ------ | --------- |  | ----- | ------ | ----------- |  | ------------ | ------- |  |  | ---------- | ------ | - |  | - | ------- | 
|                                                    |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  | Corporate, |        |   |  |  
|                                                    |  |                |         |        |  | United |        |        |  |          |        | All       |  | Total |        | Unallocated |  | Consolidated
|                                                    |  | Mexico         |         | States |  | Europe |        | Others |  | Segments |        | and Other |  | Total
|                                                    |  |                |         |        |  |        |        |        |  |          |        |           |  |      
|                                                    |  | (in thousands)
|As of and for the Three
Months Ended March 31, 2003 |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  |            |        |   |  |   |         | 
|Net sales                                           |  | $              | 56,793  |        |  | $      | 23,881 |        |  | $        | 7,446  |           |  | $     | 3,280  |             |  | $            | 91,400  |  |  | $          |       |   |  | $ | 91,400  | 
|Operating profit (loss)                             |  |                | 14,666  |        |  |        | 3,329  |        |  |          | 5      |           |  |       | (1,515 | )           |  |              | 16,485  |  |  |            | (6,637 | ) |  |   | 9,848   | 
|Depreciation and amortization                       |  |                | 547     |        |  |        | 737    |        |  |          | 84     |           |  |       | 122    |             |  |              | 1,490   |  |  |            |       |   |  |   | 1,490   | 
|Capital expenditures                                |  |                | 484     |        |  |        | 635    |        |  |          | 97     |           |  |       | 314    |             |  |              | 1,530   |  |  |            |       |   |  |   | 1,530   | 
|Segment assets                                      |  |                | 169,435 |        |  |        | 86,561 |        |  |          | 18,231 |           |  |       | 8,976  |             |  |              | 283,203 |  |  |            | (1,557 | ) |  |   | 281,646 | 
|Goodwill                                            |  |                | 27,514  |        |  |        | 32,188 |        |  |          | 5,143  |           |  |       | 252    |             |  |              | 65,097  |  |  |            |       |   |  |   | 65,097  | 
|As of and for the Three
Months Ended March 31, 2002 |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  |            |        |   |  |   |         | 
|Net sales                                           |  | $              | 66,487  |        |  | $      | 20,875 |        |  | $        | 5,810  |           |  | $     | 5,932  |             |  | $            | 99,104  |  |  | $          |       |   |  | $ | 99,104  | 
|Operating profit (loss)                             |  |                | 17,589  |        |  |        | 2,862  |        |  |          | 48     |           |  |       | (831   | )           |  |              | 19,668  |  |  |            | (3,924 | ) |  |   | 15,744  | 
|Depreciation and amortization                       |  |                | 443     |        |  |        | 565    |        |  |          | 65     |           |  |       | 70     |             |  |              | 1,143   |  |  |            |       |   |  |   | 1,143   | 
|Capital expenditures                                |  |                | 357     |        |  |        | 1,626  |        |  |          | 3      |           |  |       | 9      |             |  |              | 1,995   |  |  |            |       |   |  |   | 1,995   | 

8



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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

|               |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  |            |        |   |  |  |         | 
|-------------- |  | -------------- | ------- | ------ |  | ------ | ------ | ------ |  | -------- | ------ | --------- |  | ----- | ------ | ----------- |  | ------------ | ------- |  |  | ---------- | ------ | - |  |  | ------- | 
|               |  |                |         |        |  |        |        |        |  |          |        |           |  |       |        |             |  |              |         |  |  | Corporate, |        |   |  | 
|               |  |                |         |        |  | United |        |        |  |          |        | All       |  | Total |        | Unallocated |  | Consolidated
|               |  | Mexico         |         | States |  | Europe |        | Others |  | Segments |        | and Other |  | Total
|               |  |                |         |        |  |        |        |        |  |          |        |           |  |      
|               |  | (in thousands)
|Segment assets |  |                | 198,324 |        |  |        | 71,651 |        |  |          | 18,369 |           |  |       | 12,351 |             |  |              | 300,695 |  |  |            | (1,341 | ) |  |  | 299,354 | 
|Goodwill       |  |                | 32,857  |        |  |        | 32,188 |        |  |          | 6,009  |           |  |       | 579    |             |  |              | 71,633  |  |  |            |       |   |  |  | 71,633  | 

(8) Restructuring and Impairment Charges

During the three months ended March 31, 2003, the Company recorded
$565,000 of restructuring and impairment charges relating to its restructuring
activities in South America and Thailand. Approximately $251,000 of impairment
charges were recorded for certain fixed assets in Thailand. The carrying value
of the fixed assets does not appear to be recoverable based on undiscounted
cash flows. The Company recorded an impairment charge for the difference
between the carrying value of the assets and the fair market value. The
remaining charges related to severance expenses. All amounts were paid out
during the three months ended March 31, 2003.

(9) Foreign Currency Forward and Option Contracts

The Company is exposed to currency risk relating to its forecasted U.S.
dollar-denominated expenditures at Jafra S.A. As part of its overall strategy
to reduce the risk of potential adverse exchange rate fluctuations in Mexico,
the Company entered into foreign currency exchange contracts (forward
contracts) during the first four months of 2002, and enters into foreign
currency option contracts (option contracts or options) during 2002 and
2003. The Company places forward contracts or option contracts based on its
rolling 12 month forecasted cash outflows from Jafra S.A. and hedges
transactions included in the forecast on the date the forward contract or
option contract is initiated. As a matter of policy, the Company does not hold
or issue forward contracts or option contracts for trading or speculative
purposes nor does it enter into contracts or agreements containing embedded
derivative features.

The Company currently designates certain of its forward contracts and
option contracts as cash flow hedges of forecasted U.S. dollar-denominated
inventory purchases, forecasted U.S. dollar-denominated intercompany charges
from JCI to Jafra S.A., forecasted management fee charges from JCI to Jafra
S.A., and U.S. dollar-denominated interest payments. For all qualifying and
highly effective cash flow hedges, the changes in the fair value of the
derivative are deferred as a component of other comprehensive loss. Such
amounts will be reclassified from other comprehensive loss into net income
when the underlying hedged exposure is recognized in income. For U.S.
dollar-denominated inventory purchases, this will occur upon sale to an outside
party of the related inventory. For intercompany charges and interest, this
will occur at the date such charges are paid by Jafra S.A.

During the three months ended March 31, 2003, the Company recognized gains
of approximately $627,000 on option contracts and during the three months ended
March 31, 2002, the Company recognized losses of approximately $355,000 on
forward contracts (including reclassification of other comprehensive loss) as a
component of exchange (loss) gain in the accompanying consolidated statements
of income.

As of December 31, 2001, the Company had deferred as a component of other
comprehensive loss $3,746,000 of losses on forward contracts. During the
three months ended March 31, 2002, the Company deferred as a component of other
comprehensive loss an additional $2,244,000 of losses on forward contracts
and $49,000 of gains on option contracts qualifying for hedge accounting under
SFAS No. 133. During the three months ended March 31, 2002, approximately
$135,000 was reclassified as exchange (loss) gain and $937,000 was reclassified
as cost of sales upon recognition of the underlying hedged exposure.

As of December 31, 2002, the Company had deferred as a component of other
comprehensive loss $739,000 of losses on forward contracts and $475,000 of
gains on option contracts. During the three months ended March 31, 2003, the
company deferred as a component of other comprehensive loss an additional
$355,000 of gains on option contracts qualifying for hedge accounting under
SFAS No. 133. During the three months ended March 31, 2003, approximately
$550,000 of gains were reclassified as exchange loss (gain) and approximately
$678,000 of losses were reclassified as cost of sales upon the recognition of
the underlying hedged exposure. The Company expects that substantially all of
the remaining gain of $219,000 deferred as a component of other comprehensive
loss at March 31, 2003 will be recognized into net loss within the next
twelve months.

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CDRJ INVESTMENTS (LUX) S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)
(Unaudited)

The fair value of the option contracts was $196,000 at March 31, 2003 and
has been recorded as other receivables in the consolidated balance sheets. The
fair value of the forward contracts was $4,986,000 at March 31, 2002 and has
been recorded in accrued liabilities in the consolidated balance sheets. The
fair value of the option contacts was $49,000 at March 31, 2002, and has been
recorded as an offset to accrued liabilities in the consolidated balance
sheets.

During the three months ended March 31, 2003 and 2002, the ineffectiveness
generated by the Companys forward and option contracts designated as hedges
was insignificant. Certain hedged forecasted transactions do not appear
probable of occurring due to timing differences between the original and
current forecasts, and accordingly during the three months ended March 31, 2003
and 2002, $230,000 and $206,000, respectively, of gains were reclassified into
earnings.

The outstanding foreign currency option contracts had a notional value
denominated in Mexican pesos of 374,000,000 in put and call positions at March
31, 2003. The outstanding foreign currency forward contracts had notional
values denominated in Mexican pesos of 579,000,000 in equal offsetting buy and
sell positions at March 31, 2002 and matured at various dates extending to
November 2002. The outstanding foreign currency option contracts had a
notional value denominated in Mexican pesos of 703,500,000 in put and call
positions at March 31, 2002. Notional amounts do not quantify market or credit
exposure or represent assets or liabilities of the Company, but are used in the
calculation of cash settlements under the contracts. (See Item 3 Quantitative
and Qualitative Disclosures About Market Risk).

(10) Subsequent Event

In the second quarter of 2003, the Company initiated a $290 million
recapitalization. The transaction is expected to include the issuance by JCI
and its Mexican affiliate, Distribuidora Comercial Jafra, S.A. de C.V. (Jafra
Distribution (Mexico)), of $200 million in unsecured interest-bearing senior
subordinated notes at 10 3/4% due 2011 and the closing of new credit facilities for JCI
and Jafra Distribution (Mexico), comprising a $50 million senior secured term
debt facility and a $40 million senior secured term revolving
debt facility. Jafra Distribution (Mexico) was formed during the
first quarter of 2003 and is expected to assume from Jafra S.A. the
assets used to conduct Jafra S.A.s distribution business, as well as to issue the new notes and enter
into the new credit agreement.

Proceeds from the recapitalization are expected to be used principally to
repay all outstanding amounts under the current credit facility of JCI and
Jafra S.A., redeem the existing 11 3/4% Senior Subordinated Notes due 2008 of
JCI and Jafra S.A and make a distribution to the registrants equity holders.

10



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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)


|                                     |                                                                                                 |                            |        |        |             |         |              |        |        |         | 
|------------------------------------ | ----------------------------------------------------------------------------------------------- | -------------------------- | ------ | ------ | ----------- | ------- | ------------ | ------ | ------ | ------- | 
|                                     |                                                                                                 |                            |        |        | March 31,   |         | December 31,
|                                     |                                                                                                 |                            |        |        | 2003        |         | 2002        
|                                     |                                                                                                 |                            |        |        |             |         |             
|                                     |                                                                                                 |                            |        |        | (Unaudited) |         |              |        |       
|ASSETS                               |                                                                                                 |                            |        |        |             |         |              |       
|Current assets:                      |                                                                                                 |                            |        |        |             |         |              |       
|                                     | Cash and cash equivalents                                                                       |                            | $      | 16,857 |             |         | $            | 13,088 |       
|                                     | Receivables, net                                                                                |                            |        | 4,972  |             |         |              | 5,713  |       
|                                     | Inventories                                                                                     |                            |        | 12,749 |             |         |              | 11,974 |       
|                                     | Receivables from affiliates                                                                     |                            |        | 16,842 |             |         |              | 25,608 |       
|                                     | Prepaid expenses and other current assets                                                       |                            |        | 2,392  |             |         |              | 2,554  |       
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 | Total current assets       |        |        | 53,812      |         |              |        | 58,937 |        
|Property and equipment, net          |                                                                                                 |                            | 26,206 |        |             |         | 26,357       |       
|Other assets:                        |                                                                                                 |                            |        |        |             |         |              |       
|                                     | Goodwill                                                                                        |                            |        | 37,331 |             |         |              | 37,488 |       
|                                     | Notes receivable from affiliates                                                                |                            |        | 12,824 |             |         |              | 10,694 |       
|                                     | Deferred financing fees, net                                                                    |                            |        | 2,218  |             |         |              | 2,375  |       
|                                     | Other                                                                                           |                            |        | 4,120  |             |         |              | 3,938  |       
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 |                            | Total  |        | $           | 136,511 |              |        | $      | 139,789 | 
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                 |                            |        |        |             |         |              |       
|Current liabilities:                 |                                                                                                 |                            |        |        |             |         |              |       
|                                     | Current portion of long-term debt                                                               |                            | $      | 4,000  |             |         | $            | 4,000  |       
|                                     | Accounts payable                                                                                |                            |        | 3,836  |             |         |              | 5,944  |       
|                                     | Accrued liabilities                                                                             |                            |        | 12,971 |             |         |              | 12,230 |       
|                                     | Income taxes payable                                                                            |                            |        | 265    |             |         |              | 815    |       
|                                     | Deferred income taxes                                                                           |                            |        | 643    |             |         |              | 643    |       
|                                     | Payables to affiliates                                                                          |                            |        | 19,447 |             |         |              | 20,435 |       
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 | Total current liabilities  |        |        | 41,162      |         |              |        | 44,067 |        
|Long-term debt                       |                                                                                                 |                            | 46,108 |        |             |         | 47,108       |       
|Deferred income taxes                |                                                                                                 |                            | 4,671  |        |             |         | 4,671        |       
|Other long-term liabilities          |                                                                                                 |                            | 4,016  |        |             |         | 3,787        |       
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 | Total liabilities          |        |        | 95,957      |         |              |        | 99,633 |        
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|Commitments and contingencies        |                                                                                                 |                            |       |        |             |         |             |       
|Stockholders equity:                |                                                                                                 |                            |        |        |             |         |              |       
|                                     | Common stock, par value $.01; authorized, issued
and outstanding, 1,000 shares in 2003 and 2002 |                            |        |       |             |         |              |       |       
|                                     | Additional paid-in capital                                                                      |                            |        | 39,649 |             |         |              | 39,649 |       
|                                     | Retained earnings                                                                               |                            |        | 3,690  |             |         |              | 3,249  |       
|                                     | Accumulated other comprehensive loss                                                            |                            |        | (2,785 | )           |         |              | (2,742 | )     
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 | Total stockholders equity |        |        | 40,554      |         |              |        | 40,156 |        
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       
|                                     |                                                                                                 |                            | Total  |        | $           | 136,511 |              |        | $      | 139,789 | 
|                                     |                                                                                                 |                            |        |        |             |         |              |        |       

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)

|                                             |                        |   |                    |        |      |   |        |        |  
|-------------------------------------------- | ---------------------- | - | ------------------ | ------ | ---- | - | ------ | ------ | -
|                                             |                        |   | Three Months Ended
|                                             |                        |   | March 31,         
|                                             |                        |   |                   
|                                             |                        |   | 2003               |        | 2002
|                                             |                        |   |                    |        |     
|Net sales to third parties                   |                        | $ | 32,257             |        |      | $ | 28,671 |       
|Sales to affiliates                          |                        |   | 4,344              |        |      |   | 3,540  |       
|                                             |                        |   |                    |        |      |   |        |       
|Net sales                                    |                        |   | 36,601             |        |      |   | 32,211 |       
|Cost of sales                                |                        |   | 11,172             |        |      |   | 9,301  |       
|                                             |                        |   |                    |        |      |   |        |       
|                                             | Gross profit           |   |                    | 25,429 |      |   |        | 22,910 |  
|Selling, general and administrative expenses |                        |   | 28,125             |        |      |   | 24,628 |       
|Restructuring and impairment charges         |                        |   | 376                |        |      |   |       |       
|Management fee income from affiliates        |                        |   | (1,631             | )      |      |   | (2,125 | )     
|Royalty income from affiliates, net          |                        |   | (4,196             | )      |      |   | (4,638 | )     
|                                             |                        |   |                    |        |      |   |        |       
|                                             | Income from operations |   |                    | 2,755  |      |   |        | 5,045  |  
|Other income (expense):                      |                        |   |                    |        |      |   |        |       
|                                             | Exchange loss, net     |   |                    | (55    | )    |   |        | (136   | )
|                                             | Interest expense, net  |   |                    | (1,449 | )    |   |        | (1,587 | )
|                                             | Other, net             |   |                    | 4      |      |   |        | 13     |  
|                                             |                        |   |                    |        |      |   |        |       
|Income before income taxes                   |                        |   | 1,255              |        |      |   | 3,335  |       
|Income tax expense                           |                        |   | 814                |        |      |   | 190    |       
|                                             |                        |   |                    |        |      |   |        |       
|Net income                                   |                        | $ | 441                |        |      | $ | 3,145  |       
|                                             |                        |   |                    |        |      |   |        |       

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |        |        |        |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------------------------- | ----------------------------------------- | --- | ------------------ | ------ | ------ | ------ | ------ | ------ | -
|                                                 |                                                                                   |                                                 |                                           |                                           |     | Three Months Ended
|                                                 |                                                                                   |                                                 |                                           |                                           |     | March 31,         
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                   
|                                                 |                                                                                   |                                                 |                                           |                                           |     | 2003               |        | 2002  
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |       
|Cash flows from operating activities:            |                                                                                   |                                                 |                                           |                                           |     |                    |        |       
|                                                 | Net income                                                                        |                                                 | $                                         | 441                                       |     |                    | $      | 3,145  |       
|                                                 | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                 |                                           |                                           |     |                    |        |        |       
|                                                 |                                                                                   | Depreciation and amortization                   |                                           |                                           | 884 |                    |        |        | 661    |       
|                                                 |                                                                                   | Provision for uncollectible accounts receivable |                                           |                                           | 217 |                    |        |        | 153    |       
|                                                 |                                                                                   | Amortization of deferred financing fees         |                                           |                                           | 157 |                    |        |        | 158    |       
|                                                 |                                                                                   | Asset impairment charges                        |                                           |                                           | 251 |                    |        |        |       |       
|                                                 |                                                                                   | Unrealized foreign exchange loss                |                                           |                                           | 290 |                    |        |        | 164    |       
|                                                 |                                                                                   | Deferred income taxes                           |                                           |                                           |    |                    |        |        | (1,250 | )     
|                                                 |                                                                                   | Changes in operating assets and liabilities:    |                                           |                                           |     |                    |        |        |        |       
|                                                 |                                                                                   |                                                 | Receivables                               |                                           |     | 524                |        |        |        | 1,041  |       
|                                                 |                                                                                   |                                                 | Inventories                               |                                           |     | (775               | )      |        |        | (2,249 | )     
|                                                 |                                                                                   |                                                 | Prepaid expenses and other current assets |                                           |     | 162                |        |        |        | 305    |       
|                                                 |                                                                                   |                                                 | Intercompany receivables and payables     |                                           |     | 7,778              |        |        |        | 6,429  |       
|                                                 |                                                                                   |                                                 | Other assets                              |                                           |     | 53                 |        |        |        | 78     |       
|                                                 |                                                                                   |                                                 | Accounts payable and accrued liabilities  |                                           |     | (1,367             | )      |        |        | (1,359 | )     
|                                                 |                                                                                   |                                                 | Income taxes payable/prepaid              |                                           |     | (550               | )      |        |        | 322    |       
|                                                 |                                                                                   |                                                 | Other long-term liabilities               |                                           |     | 229                |        |        |        | (408   | )     
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|                                                 |                                                                                   |                                                 |                                           | Net cash provided by operating activities |     |                    | 8,294  |        |        |        | 7,190  |  
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|Cash flows from investing activities:            |                                                                                   |                                                 |                                           |                                           |     |                    |        |       
|                                                 | Purchases of property and equipment                                               |                                                 |                                           | (995                                      | )   |                    |        | (1,630 | )     
|                                                 | Other                                                                             |                                                 |                                           | (235                                      | )   |                    |        | (275   | )     
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|                                                 |                                                                                   |                                                 |                                           | Net cash used in investing activities     |     |                    | (1,230 | )      |        |        | (1,905 | )
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|Cash flows from financing activities:            |                                                                                   |                                                 |                                           |                                           |     |                    |        |       
|                                                 | Repayments under term loan facility                                               |                                                 |                                           | (1,000                                    | )   |                    |        | (750   | )     
|                                                 | Net repayments under revolving credit facility                                    |                                                 |                                           |                                          |     |                    |        | (1,800 | )     
|                                                 | Increase
in note receivable to affiliate                                          |                                                 |                                           | (2,130                                    | )   |                    |        | (1,600 | )     
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|                                                 |                                                                                   |                                                 |                                           | Net cash used in financing activities     |     |                    | (3,130 | )      |        |        | (4,150 | )
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|Effect of exchange rate changes on cash          |                                                                                   |                                                 | (165                                      | )                                         |     |                    | (47    | )     
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|Net increase in cash and cash equivalents        |                                                                                   |                                                 | 3,769                                     |                                           |     |                    | 1,088  |       
|Cash and cash equivalents at beginning of period |                                                                                   |                                                 | 13,088                                    |                                           |     |                    | 4,081  |       
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       
|Cash and cash equivalents at end of period       |                                                                                   | $                                               | 16,857                                    |                                           |     | $                  | 5,169  |       
|                                                 |                                                                                   |                                                 |                                           |                                           |     |                    |        |        |       

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


(1) Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of
March 31, 2003 and for the three months ended March 31, 2003 and 2002 reflect
the operations of Jafra Cosmetics International, Inc., a Delaware
corporation and its subsidiaries (JCI) and have been prepared in accordance with Article 10 of
the Securities and Exchange Commissions Regulation S-X. In the opinion of
management, the accompanying unaudited interim financial statements contain all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly JCIs consolidated financial statements as of March 31, 2003 and for the
interim periods presented. All significant intercompany accounts and
transactions between entities comprising JCI have been eliminated in
consolidation.

JCI is an
indirect wholly-owned subsidiary of CDRJ North Atlantic (Lux)
S.á.r.L., a
Luxembourg société a responsabilité limitée, which is a wholly-owned subsidiary
of CDRJ Investments (Lux) S.A., a Luxembourg société anonyme(the Parent).
JCI, its subsidiaries, and certain other subsidiaries of the Parent were
organized by Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman
Islands exempted limited partnership managed by Clayton, Dubilier & Rice, Inc.
(CD&R) to acquire (the Acquisition) the worldwide Jafra Cosmetics
business (the Jafra Business).

The functional currency of certain of JCIs subsidiaries consists of
currencies other than the U.S. dollar. For presentation purposes, assets and
liabilities are translated into U.S. dollars at current exchange rates, and
related revenues and expenses are translated at average exchange rates in
effect during the period. Resulting translation adjustments are recorded as a
component of other comprehensive loss.

Management Incentive Arrangements. JCI applies Accounting principles Board
Opinion No. 25, Accounting for Stock issued to Employees and related
Interpretations in accounting for the issuance of stock options under the
Parents Stock Incentive Plan. No options were granted during the three months
ended March 31, 2003. Had JCI recorded compensation cost based on the fair
value of options granted at the grant date, as prescribed by Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock Based
Compensation, the compensation expense for the three months ended March 31,
2003 and 2002 would be immaterial to the consolidated statements of income.

New Accounting Pronouncements.JCI adopted SFAS No. 145, Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections on January 1, 2003. This Statement rescinds or modifies
existing authoritative pronouncements including SFAS No. 4 Reporting Gains and
Losses from Extinguishment of Debt. As a result of the issuance of SFAS No.
145, gains and losses from extinguishment of debt are classified as
extraordinary items only if they meet the criteria in Accounting Principles
Board Opinion ("APB") 30, Reporting the Results of Operations-Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions. Applying the provisions of APB
Opinion 30 distinguishes transactions that are part of an entitys recurring
operations from those that are unusual or infrequent or that meet the criteria
for classification as an extraordinary item. Based on the adoption of this
principle, JCI will reclassify any gain or loss on extinguishment of debt that
was classified as an extraordinary item in prior periods presented that does
not meet the criteria in APB Opinion 30 for classification as an extraordinary
item.

JCI adopted SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities on January 1, 2003 which did not
result in any material impact to JCIs
consolidated statements of income. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

(2) Property and Equipment

Property and equipment consist of the following (in thousands):

|                               |  |           |        |              |  |   |        | 
|------------------------------ |  | --------- | ------ | ------------ |  | - | ------ | 
|                               |  | March 31, |        | December 31,
|                               |  | 2003      |        | 2002        
|                               |  |           |        |             
|Land                           |  | $         | 6,188  |              |  | $ | 6,188  | 
|Buildings                      |  |           | 7,090  |              |  |   | 7,099  | 
|Machinery, equipment and other |  |           | 22,802 |              |  |   | 22,460 | 
|                               |  |           |        |              |  |   |        | 
|                               |  |           | 36,080 |              |  |   | 35,747 | 
|Less accumulated depreciation  |  |           | 9,874  |              |  |   | 9,390  | 
|                               |  |           |        |              |  |   |        | 
|Property and equipment, net    |  | $         | 26,206 |              |  | $ | 26,357 | 
|                               |  |           |        |              |  |   |        | 



|(3) |  | Goodwill and Other Intangible Assets.
|--- |  | -------------------------------------



| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | JCIs intangible assets consist of trademarks and goodwill. JCI has
determined trademarks to have an indefinite life. The carrying value of
trademarks was $245,000 as of March 31, 2003. The changes in the carrying
amount of goodwill for the three months ended March 31, 2003 are as follows
(in thousands):

|                                |  |        |        |        |  |       |       |              |  |   |        |   |  |  |  | 
|------------------------------- |  | ------ | ------ | ------ |  | ----- | ----- | ------------ |  | - | ------ | - |  |  |  | 
|                                |  | United |        |        |  |       |       | Consolidated
|Goodwill                        |  | States |        | Europe |  | Total
|                                |  |        |        |        |  |      
|Balance as of December 31, 2002 |  | $      | 32,188 |        |  | $     | 5,300 |              |  | $ | 37,488 |  
|Translation effect              |  |        |       |        |  |       | (157  | )            |  |   | (157   | )
|                                |  |        |        |        |  |       |       |              |  |   |        |  
|Balance as of March 31, 2003    |  | $      | 32,188 |        |  | $     | 5,143 |              |  | $ | 37,331 |  
|                                |  |        |        |        |  |       |       |              |  |   |        |  

(4) Income Taxes

The actual income tax rate of JCI differs from the expected tax rate,
computed by applying the U.S. federal corporate rate of 35% to income before
income taxes, for the three months ended March 31, 2003 principally as the
result of (i) state income tax, and (ii) valuation allowances against certain
operating losses in Europe.

The actual income tax rate of JCI differs from the expected tax rate for
the three months ended March 31, 2002, principally as a result of the release
of valuation allowances of $1,250,000 against certain foreign tax credits in
the United States. These were offset by state income taxes in the United
States and valuation allowances provided against certain operating losses in
Europe.

(5) Comprehensive Income

Comprehensive income is summarized as follows (in thousands):

|                                         |  |                    |     |      |  |   |       | 
|---------------------------------------- |  | ------------------ | --- | ---- |  | - | ----- | 
|                                         |  | Three Months Ended
|                                         |  | March 31,         
|                                         |  |                   
|                                         |  | 2003               |     | 2002
|                                         |  |                    |     |     
|Net income                               |  | $                  | 441 |      |  | $ | 3,145 | 
|Foreign currency translation adjustments |  |                    | (43 | )    |  |   | 6     | 
|                                         |  |                    |     |      |  |   |       | 
|Comprehensive income                     |  | $                  | 398 |      |  | $ | 3,151 | 
|                                         |  |                    |     |      |  |   |       | 

(6) Related Party Transactions

JCI distributes skin and body products to other affiliates of the Parent
(affiliates). Sales to affiliates, primarily in Mexico and South America,
were $4,344,000 and $3,540,000 for the three months ended March 31, 2003 and
2002, respectively. These sales were made at cost plus a markup ranging from 0
to 11%. JCI purchased

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)
(Unaudited)

color and fragrance products from Jafra S.A. (the
indirect wholly owned Mexican subsidiary of the Parent) totaling $2,683,000 and
$4,924,000 for the three months ended March 31, 2003 and 2002, respectively.

In addition, JCI provides certain management services, such as legal,
accounting and treasury, management oversight, and other administrative
functions to affiliates. The cost of these services is included in selling,
general and administrative expenses in the accompanying consolidated statements
of income. JCI charges out a portion of these management expenses to its
affiliates based upon charges identified to specific affiliates and a formula
using the percentage of revenues of each affiliate to the total consolidated
revenues of the Parent. JCI believes the amounts and methods of allocation are
reasonable and approximate the cost of the actual services provided.
Management fee income, which consists of amounts billed to affiliates in Mexico
and South America, was $1,631,000 and $2,125,000 for the three months ended
March 31, 2003 and 2002, respectively.

JCI is charged a royalty by Jafra S.A. for the right to use the Jafra
trademark in the United States and Europe. The total royalty expense charged
by Jafra S.A. to JCI was $784,000 and $552,000 for the three months ended March
31, 2003 and 2002, respectively, and is offset against royalty income from
affiliates in the accompanying consolidated statements of income.

JCI owns the worldwide rights to its multi-level sales know-how (referred
to as the Jafra Way). The Jafra Way was initially developed in the United
States for lineage, training, and compensation of consultants. The royalty fees
charged by JCI to Jafra S.A. for the use of the Jafra Way were $4,980,000 and
$5,190,000 for the three months ended March 31, 2003 and 2002, respectively,
and are based upon a percentage of Jafra S.A.s sales.

JCI has granted loans to certain affiliates at annual interest rates
ranging from 6% to 9%. Such loans are due to be repaid five years from the date
of grant, with no prepayment penalty. Notes receivable from affiliates at
December 31, 2002 and March 31, 2003 consist primarily of loans JCI has made to
indirect subsidiaries of the Parent to fund certain of their operations in
South America. Net interest income from affiliates was $132,000 and $56,000
for the three months ended March 31, 2003 and 2002, respectively, and is
included in interest expense, net on the accompanying consolidated statements
of income.

(7) Financial Reporting for Business Segments

JCIs business is comprised of one industry segment, direct selling, with
worldwide operations, principally in the United States and Europe. JCI is
organized into geographical business units that each sell the full line of
Jafra cosmetics, skin care, body care, fragrances, and other products. JCI has
two reportable business segments: the United States and Europe. Business
results for subsidiaries in the Dominican Republic and Thailand are combined
and included in the following table under the caption All Others.

The accounting policies used to prepare the information reviewed by JCIs
chief operating decision makers are the same as those described in the summary
of significant accounting policies included in JCIs audited consolidated
financial statements as of and for the year ended December 31, 2002 included in
the Parents Annual Report on Form 10-K. JCI evaluates performance based on
segment operating income, excluding restructuring and impairment charges,
unusual gains and losses, and amortization of goodwill and intangibles.
Consistent with the information reviewed by JCIs chief operating decision
makers, corporate costs, foreign exchange gains and losses, interest expense,
other nonoperating income or expense, and income taxes are not allocated to
operating segments for purposes of this presentation. The effects of
intersegment sales (net sales and related gross profit) are excluded from the
computation of segment operating income. Sales and gross profit related to
affiliates (primarily in Mexico and South America) is included in the following
table under the caption Corporate, Unallocated and Other. Notes and accounts
receivable from affiliates are excluded from segment assets and are included
in the following table under the caption Corporate, Unallocated and Other.

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JAFRA COSMETICS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)
(Unaudited)

|                                                   |  |                |        |            |  |        |        |          |  |           |       |             |  |              |         |  |  |            |        |   |  |   |         | 
|-------------------------------------------------- |  | -------------- | ------ | ---------- |  | ------ | ------ | -------- |  | --------- | ----- | ----------- |  | ------------ | ------- |  |  | ---------- | ------ | - |  | - | ------- | 
|                                                   |  |                |        |            |  |        |        |          |  |           |       |             |  |              |         |  |  | Corporate, |        |   |  |  
|                                                   |  | United         |        |            |  |        |        | All      |  | Total     |       | Unallocated |  | Consolidated
|                                                   |  | States         |        | Europe (1) |  | Others |        | Segments |  | And Other |       | Total      
|                                                   |  |                |        |            |  |        |        |          |  |           |       |            
|                                                   |  | (in thousands)
|As of and for the Three
Months EndedMarch 31, 2003 |  |                |        |            |  |        |        |          |  |           |       |             |  |              |         |  |  |            |        |   |  |   |         | 
|Net sales                                          |  | $              | 23,881 |            |  | $      | 7,446  |          |  | $         | 930   |             |  | $            | 32,257  |  |  | $          | 4,344  |   |  | $ | 36,601  | 
|Operating income                                   |  |                | 3,329  |            |  |        | 5      |          |  |           | (166  | )           |  |              | 3,168   |  |  |            | (413   | ) |  |   | 2,755   | 
|Depreciation and amortization                      |  |                | 737    |            |  |        | 84     |          |  |           | 63    |             |  |              | 884     |  |  |            |       |   |  |   | 884     | 
|Capital expenditures                               |  |                | 635    |            |  |        | 97     |          |  |           | 263   |             |  |              | 995     |  |  |            |       |   |  |   | 995     | 
|Segment assets                                     |  |                | 86,561 |            |  |        | 17,969 |          |  |           | 2,315 |             |  |              | 106,845 |  |  |            | 29,666 |   |  |   | 136,511 | 
|Goodwill                                           |  |                | 32,188 |            |  |        | 5,143  |          |  |           |      |             |  |              | 37,331  |  |  |            |       |   |  |   | 37,331  | 
|As of and for the Three
Months EndedMarch 31, 2002 |  |                |        |            |  |        |        |          |  |           |       |             |  |              |         |  |  |            |        |   |  |   |         | 
|Net sales                                          |  | $              | 20,875 |            |  | $      | 5,810  |          |  | $         | 1,986 |             |  | $            | 28,671  |  |  | $          | 3,540  |   |  | $ | 32,211  | 
|Operating income (loss)                            |  |                | 2,862  |            |  |        | 48     |          |  |           | 113   |             |  |              | 3,023   |  |  |            | 2,022  |   |  |   | 5,045   | 
|Depreciation and amortization                      |  |                | 565    |            |  |        | 62     |          |  |           | 34    |             |  |              | 661     |  |  |            |       |   |  |   | 661     | 
|Capital expenditures                               |  |                | 1,626  |            |  |        | 3      |          |  |           | 1     |             |  |              | 1,630   |  |  |            |       |   |  |   | 1,630   | 
|Segment assets                                     |  |                | 71,651 |            |  |        | 18,119 |          |  |           | 2,891 |             |  |              | 92,661  |  |  |            | 25,926 |   |  |   | 118,587 | 
|Goodwill                                           |  |                | 32,188 |            |  |        | 6,009  |          |  |           |      |             |  |              | 38,197  |  |  |            |       |   |  |   | 38,197  | 



(1) excludes Poland, an indirect wholly-owned subsidiary of the Parent, an
affiliate of JCI

(8) Restructuring and Impairment Charges

During the three months ended March 31, 2003, JCI recorded $376,000 of
restructuring and impairment charges related to its restructuring activities in
Thailand. Approximately $251,000 of impairment charges were recorded for
certain fixed assets in Thailand. The carrying value of the fixed assets does
not appear to be recoverable based on undiscounted cash flows. JCI recorded an
impairment charge for the difference between the carrying value of the assets
and the fair market value. Approximately $125,000 of severance charges were
also recorded. All amounts were paid out during the three months ended March
31, 2003.

(9) Subsequent Event

During the second quarter of 2003, the Parent announced a $290 million
recapitalization. The transaction is expected to include the issuance by JCI
and its Mexican affiliate, Distribuidora Comercial Jafra, S.A. de C.V. (Jafra
Distribution (Mexico)), of $200 million in unsecured
interest-bearing senior subordinated notes at 10 3/4% due 2011 and the
closing of new credit facilities for JCI and Jafra Distribution
(Mexico), comprising a $50 million senior secured term
debt facility and a $40 million senior secured term revolving
debt facility. Jafra Distribution (Mexico) was formed during the
first quarter of 2003 and is expected to assume from Jafra S.A. the
assets used to conduct Jafra S.A.s
distribution business, as well as to issue the new notes and enter
into the new credit agreement.

Proceeds from the recapitalization are expected to be used principally to
repay all outstanding amounts under the current credit facility of JCI and
Jafra S.A., redeem the existing 11 3/4% Senior Subordinated Notes due 2008 of
JCI and Jafra S.A. and make a distribution to the registrants equity holders.

17



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JAFRA COSMETICS INTERNATIONAL,
S.A. DE C.V. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)


|                                     |                                                                                                      |  |                            |        |             |         |              |        |   |         | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | ----------- | ------- | ------------ | ------ | - | ------- | 
|                                     |                                                                                                      |  |                            |        | March 31,   |         | December 31,
|                                     |                                                                                                      |  |                            |        | 2003        |         | 2002        
|                                     |                                                                                                      |  |                            |        |             |         |             
|                                     |                                                                                                      |  |                            |        | (Unaudited) |         |              |        |  
|ASSETS                               |                                                                                                      |  |                            |        |             |         |              |       
|Current assets:                      |                                                                                                      |  |                            |        |             |         |              |       
|                                     | Cash and cash equivalents                                                                            |  | $                          | 7,871  |             |         | $            | 13,394 |  
|                                     | Receivables, net                                                                                     |  |                            | 32,204 |             |         |              | 33,518 |  
|                                     | Inventories                                                                                          |  |                            | 23,174 |             |         |              | 21,200 |  
|                                     | Receivables from affiliates                                                                          |  |                            | 16,290 |             |         |              | 17,675 |  
|                                     | Prepaid expenses and other current assets                                                            |  |                            | 2,146  |             |         |              | 2,130  |  
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total current assets       |        |             | 81,685  |              |        |   | 87,917  | 
|Property and equipment, net          |                                                                                                      |  | 32,463                     |        |             |         | 33,809       |       
|Other assets:                        |                                                                                                      |  |                            |        |             |         |              |       
|                                     | Goodwill                                                                                             |  |                            | 27,514 |             |         |              | 28,548 |  
|                                     | Trademarks                                                                                           |  |                            | 42,801 |             |         |              | 44,408 |  
|                                     | Deferred financing fees, net                                                                         |  |                            | 207    |             |         |              | 395    |  
|                                     | Other                                                                                                |  |                            | 1,054  |             |         |              | 1,227  |  
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total                      |        | $           | 185,724 |              |        | $ | 196,304 | 
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                      |  |                            |        |             |         |              |       
|Current liabilities:                 |                                                                                                      |  |                            |        |             |         |              |       
|                                     | Current portion of long-term debt                                                                    |  | $                          | 2,717  |             |         | $            | 2,489  |  
|                                     | Accounts payable                                                                                     |  |                            | 14,740 |             |         |              | 11,966 |  
|                                     | Accrued liabilities                                                                                  |  |                            | 24,550 |             |         |              | 31,469 |  
|                                     | Income taxes payable                                                                                 |  |                            | 5,141  |             |         |              | 4,097  |  
|                                     | Payables to affiliates                                                                               |  |                            | 13,397 |             |         |              | 21,894 |  
|                                     | Deferred income taxes                                                                                |  |                            | 1,556  |             |         |              | 1,430  |  
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total current liabilities  |        |             | 62,101  |              |        |   | 73,345  | 
|Long-term debt                       |                                                                                                      |  | 30,381                     |        |             |         | 30,786       |       
|Deferred income taxes                |                                                                                                      |  | 15,917                     |        |             |         | 16,515       |       
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total liabilities          |        |             | 108,399 |              |        |   | 120,646 | 
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|Commitments and contingencies        |                                                                                                      |  |                           |        |             |         |             |       
|Stockholders equity:                |                                                                                                      |  |                            |        |             |         |              |       
|                                     | Series B common stock, no par value; authorized, issued
and outstanding, 151 shares in 2003 and 2002 |  |                            |       |             |         |              |       |  
|                                     | Additional paid-in capital                                                                           |  |                            | 34,184 |             |         |              | 34,184 |  
|                                     | Retained earnings                                                                                    |  |                            | 53,051 |             |         |              | 49,046 |  
|                                     | Accumulated other comprehensive loss                                                                 |  |                            | (9,910 | )           |         |              | (7,572 | )
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total stockholders equity |        |             | 77,325  |              |        |   | 75,658  | 
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  
|                                     |                                                                                                      |  | Total                      |        | $           | 185,724 |              |        | $ | 196,304 | 
|                                     |                                                                                                      |  |                            |        |             |         |              |        |  

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)

|                                             |                           |   |                    |        |      |   |        |        |  
|-------------------------------------------- | ------------------------- | - | ------------------ | ------ | ---- | - | ------ | ------ | -
|                                             |                           |   | Three Months Ended
|                                             |                           |   | March 31,         
|                                             |                           |   |                   
|                                             |                           |   | 2003               |        | 2002
|                                             |                           |   |                    |        |     
|Net
sales to third parties                   |                           | $ | 56,793             |        |      | $ | 66,487 |       
|Sales to affiliates                          |                           |   | 2,693              |        |      |   | 5,198  |       
|                                             |                           |   |                    |        |      |   |        |       
|Net sales                                    |                           |   | 59,486             |        |      |   | 71,685 |       
|Cost of sales                                |                           |   | 16,836             |        |      |   | 21,102 |       
|                                             |                           |   |                    |        |      |   |        |       
|                                             | Gross profit              |   |                    | 42,650 |      |   |        | 50,583 |  
|Selling, general and administrative expenses |                           |   | 27,897             |        |      |   | 31,724 |       
|Management fee expense to affiliates         |                           |   | 1,631              |        |      |   | 2,125  |       
|Royalty expense to affiliates, net           |                           |   | 4,196              |        |      |   | 4,638  |       
|                                             |                           |   |                    |        |      |   |        |       
|                                             | Income from operations    |   |                    | 8,926  |      |   |        | 12,096 |  
|Other income (expense):                      |                           |   |                    |        |      |   |        |       
|                                             | Exchange (loss) gain, net |   |                    | (947   | )    |   |        | 347    |  
|                                             | Interest expense, net     |   |                    | (1,002 | )    |   |        | (1,294 | )
|                                             | Other, net                |   |                    | (29    | )    |   |        |       |  
|                                             |                           |   |                    |        |      |   |        |       
|Income before income taxes                   |                           |   | 6,948              |        |      |   | 11,149 |       
|Income tax expense                           |                           |   | 2,943              |        |      |   | 2,936  |       
|                                             |                           |   |                    |        |      |   |        |       
|Net income                                   |                           | $ | 4,005              |        |      | $ | 8,213  |       
|                                             |                           |   |                    |        |      |   |        |       

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, S.A. DE C.V. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |        |        |        |  
|---------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------------------------- | --------------------------------------------------- | ----- | ------------------ | ------ | ----- | ------ | ------ | ------ | -
|                                                     |                                                                               |                                                        |                                           |                                                     |       | Three Months Ended
|                                                     |                                                                               |                                                        |                                           |                                                     |       | March 31,         
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                   
|                                                     |                                                                               |                                                        |                                           |                                                     |       | 2003               |        | 2002 
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |      
|Cash flows from operating activities:                |                                                                               |                                                        |                                           |                                                     |       |                    |        |      
|                                                     | Net income                                                                    |                                                        | $                                         | 4,005                                               |       |                    | $      | 8,213 |       
|                                                     | Adjustments to reconcile net income to net cash
used in operating activities: |                                                        |                                           |                                                     |       |                    |        |       |       
|                                                     |                                                                               | Gain on sale of property and equipment                 |                                           |                                                     |      |                    |        |       | (43    | )     
|                                                     |                                                                               | Depreciation and amortization                          |                                           |                                                     | 547   |                    |        |       | 443    |       
|                                                     |                                                                               | Amortization of deferred financing fees                |                                           |                                                     | 173   |                    |        |       | 206    |       
|                                                     |                                                                               | Provision for uncollectible accounts receivable        |                                           |                                                     | 2,016 |                    |        |       | 1,971  |       
|                                                     |                                                                               | Unrealized foreign exchange and derivative loss (gain) |                                           |                                                     | 1,458 |                    |        |       | (601   | )     
|                                                     |                                                                               | Deferred realized derivative loss                      |                                           |                                                     | 669   |                    |        |       | 21     |       
|                                                     |                                                                               | Deferred income taxes                                  |                                           |                                                     |      |                    |        |       | (1,167 | )     
|                                                     |                                                                               | Changes in operating assets and liabilities:           |                                           |                                                     |       |                    |        |       |        |       
|                                                     |                                                                               |                                                        | Receivables                               |                                                     |       | (2,103             | )      |       |        | (7,379 | )     
|                                                     |                                                                               |                                                        | Inventories                               |                                                     |       | (2,724             | )      |       |        | 3,138  |       
|                                                     |                                                                               |                                                        | Prepaid expenses and other current assets |                                                     |       | (93                | )      |       |        | 1,013  |       
|                                                     |                                                                               |                                                        | Intercompany receivables and payables     |                                                     |       | (7,151             | )      |       |        | (5,836 | )     
|                                                     |                                                                               |                                                        | Other assets                              |                                                     |       | 128                |        |       |        | 1,027  |       
|                                                     |                                                                               |                                                        | Accounts payable and accrued liabilities  |                                                     |       | (2,554             | )      |       |        | (9,715 | )     
|                                                     |                                                                               |                                                        | Income taxes payable/prepaid              |                                                     |       | 1,184              |        |       |        | 3,059  |       
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|                                                     |                                                                               |                                                        |                                           | Net cash used in operating activities               |       |                    | (4,445 | )     |        |        | (5,650 | )
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|Cash flows from investing activities:                |                                                                               |                                                        |                                           |                                                     |       |                    |        |      
|                                                     | Proceeds from sale of property and equipment                                  |                                                        |                                           |                                                    |       |                    |        | 183   |       
|                                                     | Purchases of property and equipment                                           |                                                        |                                           | (484                                                | )     |                    |        | (357  | )     
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|                                                     |                                                                               |                                                        |                                           | Net cash used in investing activities               |       |                    | (484   | )     |        |        | (174   | )
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|Cash flows from financing activities:                |                                                                               |                                                        |                                           |                                                     |       |                    |        |      
|                                                     | Repayments under term loan facility                                           |                                                        |                                           |                                                    |       |                    |        | (625  | )     
|                                                     | Net borrowings under revolving credit facility                                |                                                        |                                           |                                                    |       |                    |        | 9,000 |       
|                                                     | Net repayments under bank debt                                                |                                                        |                                           | (177                                                | )     |                    |        | (122  | )     
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|                                                     |                                                                               |                                                        |                                           | Net cash (used in) provided by financing activities |       |                    | (177   | )     |        |        | 8,253  |  
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|Effect of exchange rate changes on cash              |                                                                               |                                                        | (417                                      | )                                                   |       |                    | 11     |      
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|Net (decrease) increase in cash and cash equivalents |                                                                               |                                                        | (5,523                                    | )                                                   |       |                    | 2,440  |      
|Cash and cash equivalents at beginning of period     |                                                                               |                                                        | 13,394                                    |                                                     |       |                    | 920    |      
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       
|Cash and cash equivalents at end of period           |                                                                               | $                                                      | 7,871                                     |                                                     |       | $                  | 3,360  |      
|                                                     |                                                                               |                                                        |                                           |                                                     |       |                    |        |       |       

See accompanying notes to consolidated financial statements

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JAFRA COSMETICS INTERNATIONAL, S.A. DE C.V. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


(1) Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of
March 31, 2003 and for the three months ended March 31, 2003 and 2002 reflect
the operations of Jafra Cosmetics International, S.A. de C.V., a sociedad anonima de capital
variableorganized under the laws of the United Mexican States (Jafra S.A.) and its subsidiaries (collectively, Jafra S.A.)
and have been prepared in accordance with Article 10 of the Securities and
Exchange Commissions Regulation S-X. In the opinion of management, the
accompanying unaudited interim financial statements contain all adjustments,
consisting of normal recurring adjustments, necessary to present fairly Jafra
S.A.s consolidated financial statements as of March 31, 2003 and for the
interim periods presented. All significant intercompany accounts and
transactions between entities comprising Jafra S.A. have been eliminated in
consolidation.

Jafra S.A.
is an indirect wholly-owned subsidiary of CDRJ Investments (Lux) S.A., a
Luxembourg société anonyme(the Parent). Jafra S.A., its subsidiaries, and
certain other subsidiaries of the Parent were organized by Clayton, Dubilier &
Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership
managed by Clayton, Dubilier & Rice, Inc. (CD&R) to acquire (the
Acquisition) the worldwide Jafra Cosmetics business (the Jafra
Business).

The functional currency for Jafra S.A. is the Mexican peso. For
presentation purposes, assets and liabilities are translated into U.S. dollars
at current exchange rates, and related revenues and expenses are translated at
average exchange rates in effect during the period. Resulting translation
adjustments are recorded as a component of other comprehensive loss.

Jafra S.A. adopted Statement of Financial Accounting Standards (SFAS)
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
statement No. 13, and Technical Corrections on January 1, 2003. This
statement rescinds or modifies existing authoritative pronouncements including
SFAS No. 4 Reporting Gains and Losses from Extinguishment of Debt. As a
result of the issuance of SFAS No. 145, gains and losses from extinguishment of
debt are classified as extraordinary items only if they meet the criteria in
Accounting Principles Board (APB) Opinion 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
Applying the provisions of APB Opinion 30 distinguishes transactions that are
part of an entitys recurring operations from those that are unusual or
infrequent or that meet the criteria for classification as an extraordinary
item. Based on the adoption of this principle, Jafra S.A. will reclassify any
gain or loss on extinguishment of debt that was classified as an extraordinary
item in prior periods presented that does not meet the criteria in APB Opinion
30 for classification as an extraordinary item.

Jafra S.A. adopted SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities on January 1, 2003 which did
not result in any material impact to
Jafra S.A.s consolidated statements of income. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.

(2) Inventories

Inventories consist of the following (in thousands):

|                           |  |           |        |              |  |   |        | 
|-------------------------- |  | --------- | ------ | ------------ |  | - | ------ | 
|                           |  | March 31, |        | December 31,
|                           |  | 2003      |        | 2002        
|                           |  |           |        |             
|Raw materials and supplies |  | $         | 5,350  |              |  | $ | 4,858  | 
|Finished goods             |  |           | 17,824 |              |  |   | 16,342 | 
|                           |  |           |        |              |  |   |        | 
|Total inventories          |  | $         | 23,174 |              |  | $ | 21,200 | 
|                           |  |           |        |              |  |   |        | 

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JAFRA COSMETICS INTERNATIONAL, S.A. DE C.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

(3) Property and Equipment

Property and equipment consist of the following (in thousands):

|                               |  |           |        |              |  |   |        | 
|------------------------------ |  | --------- | ------ | ------------ |  | - | ------ | 
|                               |  | March 31, |        | December 31,
|                               |  | 2003      |        | 2002        
|                               |  |           |        |             
|Land                           |  | $         | 9,889  |              |  | $ | 10,260 | 
|Buildings                      |  |           | 9,938  |              |  |   | 10,311 | 
|Machinery, equipment and other |  |           | 18,437 |              |  |   | 18,726 | 
|                               |  |           |        |              |  |   |        | 
|                               |  |           | 38,264 |              |  |   | 39,297 | 
|Less accumulated depreciation  |  |           | 5,801  |              |  |   | 5,488  | 
|                               |  |           |        |              |  |   |        | 
|Property and equipment, net    |  | $         | 32,463 |              |  | $ | 33,809 | 
|                               |  |           |        |              |  |   |        | 

(4) Goodwill and Other Intangible Assets.

Jafra S.A. intangble assets consist of trademarks and goodwill. Jafra
S.A. has determined trademarks to have an indefinite life. The carrying value
of trademarks was $42,801,000 as of March 31, 2003. Except for translation
adjustments, there were no changes in the carrying amount of goodwill for the
three months ended March 31, 2003.

(5) Income Taxes

The actual income tax rate of Jafra S.A. differs from the Mexican federal
corporate rate of 35% to income before income taxes, for the three months ended
March 31, 2002 principally as the result of the enactment of changes in the
Mexico corporate statutory tax rate and the related impact on Jafra S.A.s net
deferred income tax liabilities. The enactment reduces the corporate income
tax rate annually in one-percent increments from the current 35% in 2002 to 32%
in 2005.

(6) Comprehensive Income

Comprehensive income is summarized as follows (in thousands):

|                                                                                     |  |                    |        |      |  |   |        |  
|------------------------------------------------------------------------------------ |  | ------------------ | ------ | ---- |  | - | ------ | -
|                                                                                     |  | Three Months Ended
|                                                                                     |  | March 31,         
|                                                                                     |  |                   
|                                                                                     |  | 2003               |        | 2002
|                                                                                     |  |                    |        |     
|Net income                                                                           |  | $                  | 4,005  |      |  | $ | 8,213  |  
|Unrealized and deferred realized (loss) gain on derivatives                          |  |                    | 355    |      |  |   | (2,195 | )
|Reclassification of deferred realized (loss) gain to
exchange loss                   |  |                    | (550   | )    |  |   | 135    |  
|Reclassification of deferred realized loss to cost
of sales                          |  |                    | 678    |      |  |   | 937    |  
|Tax benefit (expense) on unrealized and deferred realized
(loss) gain on derivatives |  |                    | (75    | )    |  |   | 393    |  
|Foreign currency translation adjustments                                             |  |                    | (2,746 | )    |  |   | 1,029  |  
|                                                                                     |  |                    |        |      |  |   |        |  
|Comprehensive income                                                                 |  | $                  | 1,667  |      |  | $ | 8,512  |  
|                                                                                     |  |                    |        |      |  |   |        |  

(7) Related Party Transactions

Jafra S.A. manufactures and distributes color cosmetics and fragrance
products to other affiliates of the Parent (affiliates). Sales to
affiliates, primarily in the United States and Germany, were $2,693,000 and
$5,198,000 for the three months ended March 31, 2003 and 2002, respectively.
These sales were made at cost plus a markup ranging from 0 to 11%. Jafra S.A.
purchased skin and body products from JCI (the indirect, wholly owned United
States subsidiary of the Parent). Purchases were $4,305,000 and $3,258,000 for
the three months ended March 31, 2003 and 2002, respectively.

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JAFRA COSMETICS INTERNATIONAL,
S.A. DE CV. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (continued)
(Unaudited)

In addition, Jafra S.A. is provided with certain management services, such
as legal, accounting and treasury, management oversight, and other
administrative functions from an affiliate. The cost of these services is
included in management fee expense to affiliates in the accompanying
consolidated statements of income. Jafra S.A. is charged a portion of these
management expenses based upon charges identified to Jafra S.A. and a formula
using the percentage of revenues of Jafra S.A. to the total consolidated
revenues of the Parent. Jafra S.A. believes the amounts and methods of
allocation are reasonable and approximate the cost of the actual services
received. The management fee expense charged by JCI to Jafra S.A. was
$1,631,000 and $2,125,000 for the three months ended March 31, 2003 and 2002,
respectively.

Jafra S.A. charges JCI a royalty for the right to use the Jafra trademark
in the United States and Europe. The total royalty income earned by Jafra S.A.
from JCI and its Germany affiliate was $784,000 and $552,000 for the three
months ended March 31, 2003 and 2002, respectively, and is offset against
royalty expense to affiliates in the accompanying consolidated statements of
income.

JCI owns the worldwide rights to its multi-level sales know-how (referred
to as the Jafra Way). The Jafra Way was initially developed in the United
States for lineage, training, and compensation of consultants. The royalty fees
charged by JCI to Jafra S.A. for the use of the Jafra Way were $4,980,000 and
$5,190,000 for the three months ended March 31, 2003 and 2002, respectively,
and are based upon a percentage of Jafra S.A.s sales.

(8) Foreign Currency Forward and Option Contracts

Jafra S.A. is exposed to currency risk relating to its forecasted U.S.
dollar-denominated expenditures. As part of its overall strategy to reduce the
risk of potential adverse exchange rate fluctuations, Jafra S.A. entered into
foreign currency exchange contracts (forward contracts) during the first four
months of 2002 and enters into foreign currency option contracts (option
contracts or options) during 2002 and 2003. Jafra S.A. places forward
contracts or option contracts based on its rolling 12 month forecasted cash
outflows and hedges transactions included in the forecast on the date the
forward contract or option contract is initiated. As a matter of policy, Jafra
S.A. does not hold or issue forward contracts or option contracts for trading
or speculative purposes nor does it enter into contracts or agreements
containing embedded derivative features.

Jafra S.A. currently designates certain of its forward contracts and
option contracts as cash flow hedges of forecasted U.S. dollar-denominated
inventory purchases, forecasted U.S. dollar-denominated intercompany charges
from JCI, forecasted management fee charges from JCI, and U.S.
dollar-denominated interest payments. For all qualifying and highly effective
cash flow hedges, the changes in the fair value of the derivative are deferred
as a component of other comprehensive loss. Such amounts will be
reclassified from other comprehensive loss into net income when the
underlying hedged exposure is recognized in income. For U.S.
dollar-denominated inventory purchases, this will occur upon sale to an outside
party of the related inventory. For intercompany charges and interest, this
will occur at the date such charges are paid.

During the three months ended March 31, 2003, Jafra S.A. recognized gains
of approximately $627,000 on option contracts and during the three months ended
March 31, 2002, Jafra S.A. recognized losses of approximately $355,000 on
forward contracts (including reclassification of other comprehensive loss) as a
component of exchange (loss) gain in the accompanying consolidated statements of
income.

As of December 31, 2001, Jafra S.A. had deferred as a component of other
comprehensive loss $3,746,000 of losses on forward contracts. During the
three months ended March 31, 2002, Jafra S.A. deferred as a component of other
comprehensive loss an additional $2,244,000 of losses on forward contracts
and $49,000 of gains on option contracts qualifying for hedge accounting under
SFAS No. 133. During the three months ended March 31, 2002, approximately
$135,000 was reclassified as exchange (loss) gain and $937,000 was reclassified
as cost of sales upon recognition of the underlying hedged exposure.

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JAFRA COSMETICS INTERNATIONAL, S.A. DE C.V. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (continued)
(Unaudited)

As of December 31, 2002, Jafra S.A. had deferred as a component of other
comprehensive loss $739,000 of losses on forward contracts and $475,000 of
gains on option contracts. During the three months ended March 31, 2003, Jafra
S.A. deferred as a component of other comprehensive loss an additional
$355,000 of gains on option contracts qualifying for hedge accounting under
SFAS No. 133. During the three months ended March 31, 2003, approximately
$550,000 of gains were reclassified as exchange (loss) gain and approximately
$678,000 of losses were reclassified as cost of sales upon the recognition of
the underlying hedged exposure. Jafra S.A. expects that substantially all of
the remaining gain of $219,000 deferred as a component of other comprehensive
loss at March 31, 2003 will be recognized into net income within the next
twelve months.

The fair value of the option contracts was $196,000 at March 31, 2003 and
has been recorded as other receivables in the consolidated balance sheets. The
fair value of the forward contracts was $4,986,000 at March 31, 2002 and has
been recorded in accrued liabilities in the consolidated balance sheets. The
fair value of the option contacts was $49,000 at March 31, 2002, and has been
recorded as an offset to accrued liabilities in the consolidated balance
sheets.

During the three months ended March 31, 2003 and 2002, the ineffectiveness
generated by Jafra S.A.s forward and option contracts designated as hedges was
insignificant. Certain hedged forecasted transactions do not appear probable
of occurring due to timing differences between the original and current
forecasts, and accordingly during the three months ended March 31, 2003 and
2002, $230,000 and $206,000, respectively, of gains were reclassified into
earnings.

The outstanding foreign currency option contracts had a notional value
denominated in Mexican pesos of 374,000,000 in put and call positions at March
31, 2003. The outstanding foreign currency forward contracts had notional
values denominated in Mexican pesos of 579,000,000 in equal offsetting buy and
sell positions at March 31, 2002 and matured at various dates extending to
November 2002. The outstanding foreign currency option contracts had a
notional value denominated in Mexican pesos of 703,500,000 in put and call
positions at March 31, 2002. Notional amounts do not quantify market or credit
exposure or represent assets or liabilities of the Company, but are used in the
calculation of cash settlements under the contracts. (See Item 3 Quantitative
and Qualitative Disclosures About Market Risk).

(9) Subsequent Event

In the second quarter of 2003, the Parent announced a $290 million
recapitalization. The transaction is expected to include the issuance by Jafra
Cosmetics International, Inc. and its Mexican affiliate, Distribuidora
Comercial Jafra, S.A. de C.V. (Jafra Distribution (Mexico)), of $200 million
in unsecured interest-bearing senior subordinated notes at 10 3/4% due 2011 and the
closing of new credit facilities for JCI and Jafra Distribution (Mexico),
comprising a $50 million senior secured term debt facility and a $40 million
senior secured term revolving debt facility. Jafra Distribution (Mexico) was formed during the
first quarter of 2003 and is expected to assume from Jafra S.A. the
assets used to conduct Jafra S.A.s
distribution business, as well as to issue the new notes and enter
into the new credit agreement.

Proceeds from the recapitalization are expected to be used principally to
repay all outstanding amounts under the current credit facility of JCI and
Jafra S.A., redeem the existing 11 3/4% Senior Subordinated Notes due 2008 of
JCI and Jafra S.A. and make a distribution to the registrants equity holders.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS


General

The following discussion of the results of operations, financial condition
and liquidity of the CDRJ Investments (Lux) S.A., a Luxembourg société anonyme,
and its subsidiaries (together, the Company) should be read in conjunction
with the accompanying unaudited interim consolidated financial statements and
notes thereto and with the Companys audited consolidated financial statements
as of and for the year ended December 31, 2002, included in the Companys
Annual Report on Form 10-K. The results of operations for the three months
ended March 31, 2003 are not necessarily indicative of results that may be
expected for future periods.

Results of Operations

The following table represents selected components of the Companys
results of operations, in millions of dollars and as percentages of net sales.

|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|--------------------------------------------------------------------- |  | ---------------------------- | ---- | ---- |  |  | ----- | - |  | - | ---- | - |  |  | ----- | -
|                                                                      |  | Three Months Ended March 31,
|                                                                      |  |                             
|                                                                      |  | 2003                         |      | 2002
|                                                                      |  |                              |      |     
|Net sales                                                             |  | $                            | 91.4 |      |  |  | 100.0 | % |  | $ | 99.1 |   |  |  | 100.0 | %
|Cost of sales                                                         |  |                              | 21.9 |      |  |  | 24.0  |   |  |   | 23.0 |   |  |  | 23.2  |  
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|Gross profit                                                          |  |                              | 69.5 |      |  |  | 76.0  |   |  |   | 76.1 |   |  |  | 76.8  |  
|Selling, general and administrative expenses                          |  |                              | 59.1 |      |  |  | 64.7  |   |  |   | 60.4 |   |  |  | 61.0  |  
|Restructuring and impairment charges                                  |  |                              | 0.6  |      |  |  | 0.6   |   |  |   |     |   |  |  |      |  
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|Income from operations                                                |  |                              | 9.8  |      |  |  | 10.7  |   |  |   | 15.7 |   |  |  | 15.8  |  
|Exchange (loss) gain, net                                             |  |                              | (0.9 | )    |  |  | (1.0  | ) |  |   | 0.5  |   |  |  | 0.5   |  
|Interest, net                                                         |  |                              | (2.6 | )    |  |  | (2.8  | ) |  |   | (2.9 | ) |  |  | (2.9  | )
|Other, net                                                            |  |                              | 0.0  |      |  |  | 0.0   |   |  |   | 0.0  |   |  |  | 0.0   |  
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|Income before income taxes and cumulative
effect of
accounting change |  |                              | 6.3  |      |  |  | 6.9   |   |  |   | 13.3 |   |  |  | 13.4  |  
|Income tax expense                                                    |  |                              | 3.8  |      |  |  | 4.2   |   |  |   | 3.2  |   |  |  | 3.2   |  
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|Income before cumulative effect of accounting
change                  |  |                              | 2.5  |      |  |  | 2.7   |   |  |   | 10.1 |   |  |  | 10.2  |  
|Cumulative effect of accounting change                                |  |                              |     |      |  |  |      |   |  |   | (0.2 | ) |  |  | (0.2  | )
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  
|Net income                                                            |  | $                            | 2.5  |      |  |  | 2.7   | % |  | $ | 9.9  |   |  |  | 10.0  | %
|                                                                      |  |                              |      |      |  |  |       |   |  |   |      |   |  |  |       |  

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Three months ended March 31, 2003 compared to the three months ended March 31,
2002

|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|-------------------------------------------- |  | ------ | ---- | ------ |  | ------ | ---- | ---------- |  | -------- | --- | --------- |  | ----- | ---- | ----- |  | ----------- | ---- | ------------ |  | ---------- | ---- | - |  | - | ---- | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  | Corporate, |      |   |  |  
|                                             |  |        |      |        |  | United |      |            |  |          |     |           |  |       |      | Total |  | Unallocated |      | Consolidated
|Dollars in millions                          |  | Mexico |      | States |  | Europe |      | All others |  | Segments |     | and Other |  | Total
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |      
|Three Months Ended March 31, 2003            |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Net sales                                    |  | $      | 56.8 |        |  | $      | 23.9 |            |  | $        | 7.4 |           |  | $     | 3.3  |       |  | $           | 91.4 |              |  | $          |     |   |  | $ | 91.4 | 
|Cost of sales                                |  |        | 14.2 |        |  |        | 5.4  |            |  |          | 1.4 |           |  |       | 1.0  |       |  |             | 22.0 |              |  |            | (0.1 | ) |  |   | 21.9 | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Gross profit                                 |  |        | 42.6 |        |  |        | 18.5 |            |  |          | 6.0 |           |  |       | 2.3  |       |  |             | 69.4 |              |  |            | 0.1  |   |  |   | 69.5 | 
|Selling, general and
administrative
expenses |  |        | 27.9 |        |  |        | 15.2 |            |  |          | 6.0 |           |  |       | 3.8  |       |  |             | 52.9 |              |  |            | 6.2  |   |  |   | 59.1 | 
|Restructuring and
impairment charges         |  |        |     |        |  |        |     |            |  |          |    |           |  |       |     |       |  |             |     |              |  |            | 0.6  |   |  |   | 0.6  | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Income (loss) from Operations                |  | $      | 14.7 |        |  | $      | 3.3  |            |  | $        | 0.0 |           |  | $     | (1.5 | )     |  | $           | 16.5 |              |  | $          | (6.7 | ) |  | $ | 9.8  | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Three Months Ended March 31, 2002            |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Net sales                                    |  | $      | 66.5 |        |  | $      | 20.9 |            |  | $        | 5.8 |           |  | $     | 5.9  |       |  | $           | 99.1 |              |  | $          |     |   |  | $ | 99.1 | 
|Cost of sales                                |  |        | 16.8 |        |  |        | 4.3  |            |  |          | 1.3 |           |  |       | 1.6  |       |  |             | 24.0 |              |  |            | (1.0 | ) |  |   | 23.0 | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Gross profit                                 |  |        | 49.7 |        |  |        | 16.6 |            |  |          | 4.5 |           |  |       | 4.3  |       |  |             | 75.1 |              |  |            | 1.0  |   |  |   | 76.1 | 
|Selling, general and
administrative
expenses |  |        | 32.1 |        |  |        | 13.7 |            |  |          | 4.5 |           |  |       | 5.1  |       |  |             | 55.4 |              |  |            | 5.0  |   |  |   | 60.4 | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 
|Income (loss) from Operations                |  | $      | 17.6 |        |  | $      | 2.9  |            |  | $        | 0.0 |           |  | $     | (0.8 | )     |  | $           | 19.7 |              |  | $          | (4.0 | ) |  | $ | 15.7 | 
|                                             |  |        |      |        |  |        |      |            |  |          |     |           |  |       |      |       |  |             |      |              |  |            |      |   |  |   |      | 

Net sales. Net sales in the first quarter of 2003 decreased to $91.4
million from $99.1 million in the first quarter of 2002, a decrease of $7.7
million or 7.8%. Net sales in local currencies in the first quarter of 2003
increased by 4.2% over the comparable prior year period. The sales increase
measured in local currencies compared to the sales decrease measured in U.S.
dollars primarily resulted from weaker average exchange rates of the
Mexican peso and South American currencies in the first quarter of 2003
compared to the first quarter of 2002. The Companys average number of
consultants (who perform the duties of sales representatives) worldwide for the
first quarter of 2003 increased to approximately 414,000 or 10.7%
over the average for the first quarter of 2002. A consultant is
included in the total ending consultant base if she places an order
within the four months immediately preceding the period end date.
The average consultant base is calculated based on the total ending
consultant base for each month during the period. Annualized consultant productivity measured in U.S. dollars for the
first quarter of 2003 decreased 16.5% compared to the first quarter of 2002.
Measured in local currencies, annualized productivity decreased 5.8% for the
first quarter of 2003, compared to the first quarter of 2002. Consultant
productivity for the quarter is generally defined as annualized
quarterly net sales
divided by the average number of consultants.

In Mexico, net sales in the first quarter of 2003 decreased to $56.8
million from $66.5 million in the first quarter of 2002, a decrease of $9.7
million, or 14.6%. Sales in Mexico in local currency increased by 1.6% over
the comparable 2002 period. The year-over-year net sales increase measured in local
currency was due primarily to a larger consultant base, partially offset by
reduced consultant productivity. In Mexico, the average number of consultants
for the first quarter of 2003 increased to approximately 260,000, or 8.7%
over the average number of consultants in the comparable prior year period.
Annualized consultant productivity measured in local currency during the first
quarter of 2003 decreased approximately 6.6% compared to consultant
productivity in the first quarter of 2002. Additionally, the average number of
leaders or branches during the first quarter of 2003 increased 3.5%
compared to the first quarter of 2002.

In the United States, net sales in the first quarter of 2003 increased to
$23.9 million from $20.9 million in the first quarter of 2002, an increase of
$3.0 million, or 14.4%. Net sales increased in the first quarter of 2003
compared to the first quarter of 2002 in both the Hispanic Division and the
General Division. Net sales in the Hispanic Division increased 20.3% primarily
due to an increase in the average number of consultants, partially offset by
reduced consultant productivity. The Hispanic Division had an average of
48,000 consultants in the first quarter of 2003, an increase of 33.4% over the
first quarter of 2002. Hispanic Division consultant productivity decreased
9.8% during the first quarter of 2003, compared to the first quarter of 2002.
Net sales in the General Division in the first quarter of 2003 increased 4.9%
compared to the first quarter of 2002, primarily due to increased consultant
productivity, partially offset by a decrease in the average number of
consultants. General Division consultant productivity increased 8.9% during
the first quarter of 2003 compared to the first quarter of 2002. The average
number of consultants in the General Division decreased 3.7% to 31,000 during
the first quarter of 2003 compared to the first quarter of 2002.

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In Europe, net sales increased to $7.4 million in the first quarter of
2003, from $5.8 million in the first quarter of 2002, an increase of $1.6
million, or 27.6%, primarily as the result of stronger average exchange rates
compared to the U.S. dollar and an increase in the average number of consultants. In
local currencies, net sales in the first quarter of 2003 increased 3.5%
compared to the first quarter of 2002. The average number of consultants in
Europe in the first quarter of 2003 increased to approximately 17,000
consultants or by approximately 4.5% compared to the average
number of consultants during the first quarter of 2002. Consultant productivity measured in local currencies decreased
0.9% during the first quarter of 2003 compared to the first quarter of 2002.

Net sales in South America and Thailand decreased 44.1% in the first
quarter of 2003 compared to the first quarter of 2002, primarily due to weaker
average exchange rates of South American currencies compared to the U.S.
dollar and reduced consultant productivity in the South American market, partially
offset by an increase in the average number of consultants in the South America
market.

Gross profit.Consolidated gross profit in the first quarter of 2003
decreased to $69.5 million from $76.1 million in the comparable prior year
period, a decrease of $6.6 million, or 8.7%. Gross profit as a percentage of
sales (gross margin) decreased to 76.0% from 76.8% in the comparable
prior year period. The decrease in gross
margin in the first quarter of 2003 was due primarily to a decrease in the
gross margin in the Companys United States and South America markets and less
favorable direct cost variances in the Companys manufacturing units during the
first quarter of 2003 compared to the first quarter of the 2002, partially
offset by increased gross margin in the Companys Mexican and European markets.

In Mexico, gross margin in the first quarter of 2003 increased to 75.0%
from 74.7% in the first quarter of 2002. The increase in gross margin was
primarily due to greater shipping and handling fees as a percentage of net sales included as a
component of net sales. In connection with hedge accounting pursuant to Statement of Financial
Accounting Standards (SFAS) No. 133, a reduced
amount of exchange losses were reclassified
as cost of sales from other comprehensive loss during the three months ended
March 31, 2003 compared to the three months ended March 31, 2002. However, the
reclassification of exchange losses was offset by favorable direct costs
variances in the first quarter of the 2002 compared to unfavorable direct cost
variances in the first quarter of 2003.

In the United States, gross margin in the first quarter of 2003 decreased
to 77.4% from 79.4% in the first quarter of 2002, due to aggressive
pricing of slow moving inventory in an effort to reduce slow moving inventory
balances and an incremental $0.1 million of expense related to the reserve for slow
moving inventory in the first quarter of the
2003 compared to the first quarter of 2002.

In Europe, gross margin in the first quarter of 2003 increased to 81.1%
from 77.6% in the first quarter of 2002 primarily due to the impact of
favorable exchange rates on the purchase of inventory.

Selling, general and administrative expenses.SG&A expenses in the first
quarter of 2003 decreased to $59.1 million from $60.4 million in the first
quarter of 2002, a decrease of $1.3 million, or 2.2%. SG&A expenses, as a
percentage of net sales, increased in the first quarter of 2003 to 64.7% from
61.0% in the first quarter of 2002, due primarily to increased selling, general
and administrative expense, as a percentage of net sales, in the
Companys Mexican, European and South American
markets. Additionally, during the first quarter of 2003, there were
transaction costs related to the recapitalization in the
Corporate, Unallocated and Other segment. These increased S,G&A
expenses, were partially offset by decreased SG&A expenses as a percentage of
sales in the Companys U.S. market.

In Mexico, SG&A expenses in the first quarter of 2003 decreased by $4.2
million, or 13.1% compared to the first quarter of 2002. SG&A
expenses increased, as a
percentage of net sales, in Mexico to 49.1% in the first quarter of 2003,
compared to 48.3% in the first quarter of 2002. The decrease in SG&A expenses
was primarily due to decreases in variable expenses in line with the decrease
in sales. The increase in SG&A expenses as a percentage of net sales was
primarily due to increased override expense and administrative expenses as a
percentage of net sales, partially offset by decreased sales promotional
expenses as a percentage of net sales. Administrative expenses increased due
to incrementally higher expenses related to the reserve for uncollectible
accounts and greater collection fees.

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In the United States, SG&A expenses in the first quarter of 2003 increased
by $1.5 million, or 10.9% from the first quarter of 2002. SG&A expenses, as a
percentage of net sales, in the United States were 63.6% in the first quarter of 2003
compared to 65.6% in the first quarter of 2002. The decrease in SG&A expenses as
a percentage of net sales
was primarily attributable to reduced sales promotional expenses and selling
expenses in the first quarter of 2003 compared to the first quarter of 2002.
Sales promotional expenses decreased as a percentage of sales due to timing of
promotional events. Selling expenses decreased as a percentage of net sales
primarily due to reduced personnel related expenses as the result of
several vacant
positions. The reduced promotional and selling expenses were partially offset
by an increase in override expense as a percentage of net sales during the first
quarter of 2003 compared to the first quarter of 2002.

In Europe, SG&A expenses in the first quarter of 2003 increased by $1.5
million, or 33.3% from the first quarter of 2002 primarily as the result of
sales promotional expenses. Sales promotional expenses increased in total and
as a percentage of net sales primarily as the result of timing and nature of
sales promotional events and more promotional activities in 2003 to increase
sponsoring and the consultant base.

SG&A expenses in South America and Thailand in the
first quarter of 2003 decreased by $1.3 million, or 25.5% compared to the first
quarter of 2002. SG&A expenses as a percentage of net sales increased during
the first quarter of the 2003 compared to the first quarter of 2002. SG&A
expenses in Corporate, Unallocated and Other increased $1.2 million primarily
as the result of increased strategic planning expenses and nonrecurring
severance charges.

Restructuring and impairment charges.During the first quarter of 2003,
the Company recorded restructuring and impairment charges of $0.6 million
related to its restructuring activities in certain of its South America markets
and Thailand. Of the total restructuring and impairment charges, $0.3 million
related to impairment of certain fixed assets in Thailand and $0.3 million
related to severance charges in South America and Thailand.

Exchange (loss) gain.The Companys foreign exchange loss was $0.9
million in the first quarter of 2003 compared to a $0.5 million exchange gain
in the first quarter of 2002, an unfavorable difference of $1.4 million.
Foreign exchange losses and gains result from three primary sources: gains and
losses on forward contracts, gains and losses due to the remeasurement of U.S.
dollar-denominated debt, and gains and losses arising from other foreign
currency-denominated transactions. Most of the Companys foreign exchange
gains and losses resulted from its foreign currency exposure to the Mexican
peso. During the first quarter of 2003, the Company recognized $1.2 million of
unrealized exchange losses on the remeasurement of U.S. dollar denominated debt
and $0.3 million of exchange losses on other foreign currency transactions.
These exchange losses were partially offset by $0.6 million of exchange gains
on option contracts. During the first quarter of 2002, the Company recognized
$0.5 million of exchange losses on forward contracts, $0.6 million of exchange
gains on the remeasurement of U.S. dollar-denominated debt and $0.4 million of
exchange gains on other foreign currency transactions. See Item 3,
Quantitative and Qualitative Disclosures about Market Risk.

Interest expense.Net interest expense (including amortization of
deferred financing fees) in the first quarter of 2003 decreased to $2.6 million
from $2.9 million in the first quarter of 2002, a decrease of $0.3 million, or
10.3%. The decrease was primarily due to lower average balances on the term loan
and revolving credit line.

Income tax expense.Income tax expense increased to $3.8 million in the
first quarter of 2003 compared to $3.2 million in the first quarter of 2002,
an increase of $0.6 million, or 18.8%. The Companys effective income tax rate
increased to 60.3% in the first quarter of 2003 compared to approximately 24.4%
for the comparable prior year period. The increase in the effective tax rate
was primarily due incrementally greater valuation allowances against losses in
the South American markets in the first quarter of 2003 compared to the first
quarter of 2002 and certain tax benefits recorded in the first quarter of 2002.
In the first quarter of 2002, valuation allowances were released against
certain deferred tax assets in the United States and there was a favorable
impact of the enactment of changes in the Mexico corporate statutory tax rate
on net deferred tax liabilities. Excluding the impact of the release of the
valuation allowance of $1.3 million and the impact of the enactment of changes
in the Mexico rate of $1.2 million, the effective tax rate would have been
43.5% for the three months ended March 31, 2002.

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Net income.Net income was $2.5 million for the first quarter of 2003, a
$7.4 million decrease compared to $9.9 million for the first quarter of 2002.
The decrease was due to a $6.6 million decrease in gross profit, $0.6 million
of restructuring charges in 2003, a $1.4 million unfavorable change in exchange
(loss) gain, a $0.6 million increase in income tax expense, partially offset by
a $1.3 million decrease in selling, general and administrative
expenses, a $0.3 million decrease in net interest expense and the absence of a $0.2
million loss on cumulative effect of accounting change in 2003.

Liquidity and Capital Resources

The Companys liquidity needs arise primarily from principal and interest
payments under its 11.75% Subordinated Notes due 2008 (the Notes), and its
credit agreement, which consists of a term loan facility and a revolving credit
facility (the Senior Credit Agreement). The Notes represent several
obligations of Jafra Cosmetics International, Inc. (JCI) and Jafra Cosmetics
International, S.A. de C.V. (Jafra S.A.) in the original principal amount of
$60 million and $40 million ($45.1 million and $30.1 million as of March 31,
2003), respectively, with each participating on a pro rata basis upon
redemption. The Notes mature in 2008 and bear a fixed interest rate of 11.75%
payable semi-annually.

The Notes are unsecured and are generally non-callable for five years.
Thereafter, the Notes will be callable at premiums declining to par in the
eighth year. The Company may from time to time repurchase the Notes in the
open market. The Company has obtained Consent and Waivers to the Senior Credit
Agreement that allow the Company to repurchase the Notes in the open market,
with the aggregate purchase price for all such Notes repurchased not to exceed
$50.0 million. Aggregate repurchases as of March 31, 2003 were $24.8 million.

Borrowings under the Senior Credit Agreement are payable in quarterly
installments of principal and interest through April 30, 2004. Scheduled term
loan principal payments under the term loan facility will be approximately $5.9
million and $2.5 million for the years ended December 31, 2003 and 2004,
respectively. Borrowings under the revolving credit facility ($0 as of March
31, 2003) mature on April 30, 2004. Borrowings under the Senior Credit
Agreement bear interest at an annual rate of LIBOR plus a margin not to exceed
1.625% or an alternate base rate (the higher of the prime rate or federal funds
rate plus 0.5%, plus an applicable margin of 0.625%). The interest rate in
effect at March 31, 2003 was approximately 3.1% for the LIBOR-based borrowings.
At March 31, 2003, the Company did not have any prime-based borrowing. If the
Company had prime-based borrowings at March 31, 2003, the rate would have been
approximately 4.9%. Borrowings under the Senior Credit Agreement are secured
by substantially all of the assets of JCI and Jafra S.A. During the three
months ended March 31, 2003, cash paid for interest was approximately $0.2
million.

Both the indenture dated as of April 30, 1998 (the Indenture), under
which the Notes were issued, and the Senior Credit Agreement contain certain
covenants that limit the Companys ability to incur additional indebtedness,
pay cash dividends and make certain other payments. The Indenture and the
Senior Credit Agreement also require the Company to maintain certain financial
ratios including a minimum EBITDA to cash interest expense coverage ratio and a
maximum debt to EBITDA ratio. As of March 31, 2003, the Company was in
compliance with all covenants. As of March 31, 2003, the Company had
irrevocable standby letters of credit outstanding totaling $2.4 million.

The Companys Mexican subsidiary, Jafra S.A., is party to an unsecured
bank loan agreement. As of March 31, 2003, Jafra S.A. had an outstanding
balance under the bank loan agreement of the peso equivalent of $0.6 million.
Principal and interest payments are due monthly through January 25, 2005. As
of March 31, 2003, $0.5 million of this loan is classified as current portion
of long term debt and $0.1 million of this loan is classified as long-term debt
in the accompanying consolidated balance sheets.

The Company believes, but no assurance can be given, that its existing
cash, cash flow from operations and availability under the Senior Credit
Agreement will provide sufficient liquidity to meet the Companys cash
requirements and working capital needs over the next twelve months.

In the second quarter of 2003, the Company initiated a $290 million
recapitalization. The transaction is expected to include the issuance by JCI
and its Mexican affiliate, Distribuidora Comercial Jafra, S.A. de C.V. (Jafra

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Distribution (Mexico)), of $200 million in unsecured interest-bearing senior
subordinated notes at 10 3/4% due 2011 and the closing of new credit facilities for JCI
and Jafra Distribution (Mexico), comprising a $50 million senior secured term
debt facility and a $40 million senior secured revolving
debt facility. Jafra Distribution (Mexico) was formed during the
first quarter of 2003 and is expected to assume from Jafra S.A. the
assets used to conduct Jafra S.A.s distribution business, as well as to issue the new notes and enter
into the new credit agreement.

Proceeds from the recapitalization are expected to be used principally to
repay all outstanding amounts under the current credit facility of JCI and
Jafra S.A., redeem the existing 11 3/4% Senior Subordinated Notes due 2008 of
JCI and Jafra S.A and make a distribution to the registrants equity holders.

Cash Flows

Net cash provided by operating activities was $2.3 million for the three
months ended March 31, 2003 compared to $0.1 million for the three months ended
March 31, 2002, an increase of $2.2 million. Net cash provided by operating
activities for three months ended March 31, 2003 consisting of $9.4 million
provided by net income plus depreciation, amortization, and other non-cash
items included in net income, partially offset by $7.1 million used in changes
in operating assets and liabilities. The significant elements of net cash used
in changes in operating assets and liabilities during the three months ended
March 31, 2003 were a decrease of $3.9 million in accounts payable and accrued
liabilities, an increase of $2.7 million in inventories and an increase of $1.6
million in receivables, partially offset by a decrease of $0.9 million in
income tax payable.

Net cash
used in investing activities was $1.8 million for the three
months ended March 31, 2003, of which $1.5 million was used for capital
expenditures. Capital expenditures in 2003 are expected to be approximately
$13.0 million.

Net cash used in financing activities was $1.2 million for the three
months ended March 31, 2003, and consisted of $1.0 million of repayment under
the term loan facility and $0.2 million net repayment of other bank debt.

The
effect of exchange rate changes on cash was $0.9 million for the three
months ended March 31, 2003 and related primarily to the weakening of the
Mexican peso and South American currencies, partially offset by the
strengthening of the Euro compared to the U.S. dollar.

Recent Accounting Pronouncements

The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 145, Rescission of FASB statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Corrections on January 1, 2003.
This statement
rescinds or modifies existing authoritative pronouncements including SFAS No. 4
Reporting Gains and Losses from Extinguishment of Debt. As a result of the
issuance of SFAS No. 145, gains and losses from extinguishment of debt are
classified as extraordinary items only if they meet the criteria in Accounting
Principles Board (APB) Opinion 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
Applying the provisions of APB Opinion 30 distinguishes transactions that are
part of an entitys recurring operations from those that are unusual or
infrequent or that meet the criteria for classification as an extraordinary
item. Based on the adoption of this principle, the Company will reclassify any
gain or loss on extinguishment of debt that was classified as an extraordinary
item in prior periods presented that does not meet the criteria in APB Opinion
30 for classification as an extraordinary item.

The Company adopted SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities on January 1, 2003, which did
not result in any material impact to
the Companys consolidated statements of income. This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity.

30



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##### Table of Contents



Foreign Operations

Net sales outside of the United States aggregated approximately 74% and
79% of the Companys total net sales for the three months ended March 31, 2003
and 2002, respectively. In addition, as of March 31, 2003, non-U.S.
subsidiaries comprised approximately 69% of the Companys consolidated total
assets. Accordingly, the Company has experienced and continues to be exposed
to foreign exchange risk. In 2002, the Company entered into foreign currency
forward contracts in Mexican pesos and in 2002 and 2003, the Company entered
into foreign currency option contracts in Mexican pesos to reduce the effect of
potentially adverse exchange rate fluctuations in Mexico.

The Companys subsidiary in Mexico, Jafra S.A., generated approximately
62% and 67% of the Companys net sales for the three months ended March 31,
2003 and 2002, respectively, substantially all of which were denominated in Mexican pesos.
At March 31, 2003, Jafra S.A. had $32.4 million of U.S. dollar-denominated
third party debt. Gains and losses from remeasuring such debt to the U.S.
dollar from the peso are included as a component of net income. Jafra S.A.
recognized a loss of $1.2 million and a gain of $0.6 million for the three
months ended March 31, 2003 and 2002, respectively, on the remeasurement of
this U.S. dollar-denominated debt and a net gain of $0.6 million and a net loss
of $0.5 million on foreign currency forward and option contracts for the three
months ended March 31, 2003 and 2002, respectively.

Business Trends and Initiatives

The Company has experienced sales growth in Mexico over the last three
years, due primarily to increases in the number of consultants. Additionally,
the Mexico subsidiary contributes a significant portion of the Companys
consolidated net sales. The Companys Mexican subsidiary generated 62% and 67%
of the Companys consolidated net sales for the three months ended March 31,
2003 and 2002, respectively, compared to 64% for the full year in 2002. Due to
the weakening of the Mexican peso compared to the U.S. dollar, Mexico
experienced a year-to-year sales decline of 15% measured in U.S. dollars, but
sales growth of 2% measured in U.S. dollars for the three months ended March
31, 2003.

In the United States, the Company has continued its strategy of focusing
on the distinct elements of its General and Hispanic customer groups. Net
sales in the U.S. have shown significant growth. Sales in the first quarter of
2003 increased 14% compared to the first quarter of 2002, with increases of 20%
in the Hispanic Division and 5% in the General Division. The U.S. contributed
26% and 21% of net sales for the quarter ended March 31, 2003 and 2002,
respectively, compared to 24% for the complete year of 2002. The U.S. also
continues to focus on doing business via e-commerce.

Net sales in Europe have increased primarily due to strengthening of the
Euro compared to the U.S. dollar and an increase in the consultant base.
 In the first
quarter of 2003, European sales contributed 8% to consolidated sales. European
sales contributed 7% to consolidated 2002 net sales. The
average number of consultants increased during the first quarter of 2003
compared to the first quarter of 2002. Due to the positive indications in the
increase in net sales and the consultant base, the Company is no longer
considering plans to exit the European markets through sale or discontinuation
of operations.

In the past few years, the Company has made significant investments in new
markets in South America and Thailand. During 2002, South American countries
in which the Company operates faced challenging macroeconomic environments.
The Company intends to exit selected markets, including South America and
Thailand by mid-2003 through sale or discontinuation of operations.

Information Concerning Forward-Looking Statements

Certain of the statements contained in this report (other than the
Companys consolidated financial statements and other statements of historical
fact) are forward-looking statements, including, without limitation, (i) the
statements in Liquidity and Capital Resources concerning the Companys
belief that it will have sufficient liquidity to meet its cash requirements and
working capital needs over the next twelve months and that proceeds from the
recapitalization are expected to be used principally to repay all outstanding
amounts under the current credit facility of JCI and Jafra S.A., redeem the
existing 11 3/4% Senior Subordinated Notes due 2008 of JCI and Jafra S.A.

31



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##### Table of Contents



and
make a distribution to the registrants equity holders; (ii) the statement in
Cash Flows that total
capital expenditures in 2003 are expected to be approximately $13.0 million;
and (iii) other statements as to managements or the Companys expectations or
beliefs presented in this Managements Discussion and Analysis of Financial
Condition and Results of Operations.

Forward-looking statements are based upon managements current
expectations and beliefs concerning future developments and their potential
effects upon the Company. There can be no assurance that future developments
will be in accordance with managements expectations or that the effect of
future developments on the Company will be those anticipated by management.
The factors described in the Companys Annual Report on Form 10-K for the year
ended December 31, 2002(including, without limitation, those discussed in
BusinessStrategy, International Operations, Distribution,
Manufacturing, Management Information Systems, Environmental
Matters, Properties, Legal Proceedings and Managements Discussion
and Analysis of Financial Condition and Results of Operations Results of
Operations, Liquidity and Capital Resources, and Foreign
Operations, or in other Securities and Exchange Commission filings, could
affect (and in some cases have affected) the Companys actual results and could
cause such results to differ materially from estimates or expectations
reflected in such forward-looking statements.

While the Company periodically reassesses material trends and
uncertainties affecting the Companys results of operations and financial
condition in connection with its preparation of managements discussion and
analysis of results of operations and financial condition contained in its
quarterly and annual reports, the Company does not intend to review or revise
any particular forward-looking statement referenced in this report in light of
future events.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks arising from transactions
in the normal course of its business, and from debt incurred in connection with
the Acquisition. Such risks are principally associated with interest rate and
foreign exchange fluctuations, as well as changes in the Companys credit
standing. See disclosures under Item 7a, Quantitative and Qualitative
Disclosures About Market Risks in the Companys annual report on Form 10-K for
the year ended December 31, 2002. No significant changes have occurred during
the first three months of 2003 in relation to the interest rate risk or its
credit standing.

Foreign Currency Risk

The Company operates globally, with manufacturing facilities in Mexico and
distribution facilities in various locations around the world. All
intercompany product sales are denominated in U.S. dollars. In addition, 74%
of the Companys revenue for first three months of 2003 was generated in
countries with a functional currency other than the U.S. dollar. As a result,
the Companys earnings and cash flows for the three months ended March 31, 2003
were exposed to fluctuations in foreign currency exchange rates.

The Company may reduce its primary market exposures to fluctuations in
foreign exchange rates and hedge contractual foreign currency cash flows or
obligations (including third party and intercompany foreign currency
transactions) by creating offsetting positions through the use of forward
exchange contracts or option contracts. The Company regularly monitors its
foreign currency exposures and ensures that contract amounts do not exceed the
amounts of the underlying exposures. The Company does not use derivative
financial instruments for trading or speculative purposes, nor is the Company a
party to leveraged derivatives.

The outstanding foreign currency option contracts has a notional value
denominated in Mexican pesos of 374,000,000 and 703,500,000 in put and call
positions at March 31, 2003 and 2002, respectively. The outstanding foreign
currency option contracts at March 31, 2003 mature at various dates through
December 31, 2003 and the outstanding foreign currency option contracts at
March 31, 2002 matured at various dates through March 27, 2003.

The outstanding foreign currency forward contracts had notional values
denominated in Mexican pesos of 579,000,000 in equal offsetting buy and sell
positions at March 31, 2002. The foreign currency forward contracts
outstanding at March 31, 2002 matured at various dates extending to November
2002. Notional amounts do not

32



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quantify market or credit exposure or represent
assets or liabilities of the Company, but are used in the calculation of cash
settlements under the contracts.

The following tables provide information about the details of the
Companys option contracts as of March 31, 2003 and 2002 (in thousands except
for average strike price):

|                                                   |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|-------------------------------------------------- |  | ----------- | ------- | -------------- |  | -------------- | ------------- | ------------- |  | - | ---- | - |  | ----------------- |  | 
|                                                   |  | Coverage in |         |                |  |                |               |               |  |   |      |   |  |                  
|                                                   |  | Mexican     |         | Average Strike |  | Fair Value in  |               |               |  |  
|Foreign Currency                                   |  | Pesos(1)    |         | Price          |  | U.S.Dollars(1) |               | Maturity Date
|                                                   |  |             |         |                |  |                |               |              
|At March 31, 2003:                                 |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|Purchased Puts (Company may sell Peso/buy USD)     |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|Mexican Peso                                       |  |             | 100,000 |                |  |                | 11.05  12.19 |               |  | $ | 119  |   |  | Apr.  Jun. 2003 
|Mexican Peso                                       |  |             | 150,000 |                |  |                | 11.76  12.79 |               |  |   | 126  |   |  | July  Sept. 2003
|Mexican Peso                                       |  |             | 124,000 |                |  |                | 12.51  12.91 |               |  |   | 31   |   |  | Oct.  Dec. 2003 
|                                                   |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|                                                   |  |             | 374,000 |                |  |                |               |               |  | $ | 276  |   |  |                   |  | 
|                                                   |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|Written Calls (Counterparty may buy Peso/sell
USD) |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|Mexican Peso                                       |  |             | 100,000 |                |  |                | 9.50  9.84   |               |  | $ | (165 | ) |  | Apr.  Jun. 2003 
|Mexican Peso                                       |  |             | 150,000 |                |  |                | 9.69  10.19  |               |  |   | (198 | ) |  | July  Sept. 2003
|Mexican Peso                                       |  |             | 124,000 |                |  |                | 10.15  10.19 |               |  |   | (109 | ) |  | Oct.  Dec. 2003 
|                                                   |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 
|                                                   |  |             | 374,000 |                |  |                |               |               |  | $ | (472 | ) |  |                   |  | 
|                                                   |  |             |         |                |  |                |               |               |  |   |      |   |  |                   |  | 

|                                                   |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|-------------------------------------------------- |  | ----------- | ------- | -------------- |  | -------------- | ------------ | ------------- |  | - | --- | - |  | ----------------- |  | 
|                                                   |  | Coverage in |         |                |  |                |              |               |  |   |     |   |  |                  
|                                                   |  | Mexican     |         | Average Strike |  | Fair Value in  |              |               |  |  
|Foreign Currency                                   |  | Pesos(1)    |         | Price          |  | U.S.Dollars(1) |              | Maturity Date
|                                                   |  |             |         |                |  |                |              |              
|At March 31, 2002:                                 |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|Purchased Puts (Company may sell Peso/buy USD)     |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|Mexican Peso                                       |  |             | 136,000 |                |  |                | 9.18 - 9.44  |               |  | $ | 6   |   |  | April - June 2002
|Mexican Peso                                       |  |             | 193,000 |                |  |                | 9.60 - 9.83  |               |  |   | (12 | ) |  | July - Sept. 2002
|Mexican Peso                                       |  |             | 323,500 |                |  |                | 9.97 - 10.15 |               |  |   | (69 | ) |  | Oct. - Dec. 2002 
|Mexican Peso                                       |  |             | 51,000  |                |  |                | 10.48        |               |  |   | (13 | ) |  | Mar-03           
|                                                   |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|                                                   |  |             | 703,500 |                |  |                |              |               |  | $ | (88 | ) |  |                   |  | 
|                                                   |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|Written Calls (Counterparty may buy Peso/sell
USD) |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|Mexican Peso                                       |  |             | 136,000 |                |  |                | 9.02         |               |  | $ | 13  |   |  | April - June 2002
|Mexican Peso                                       |  |             | 193,000 |                |  |                | 9.02         |               |  |   | 30  |   |  | July - Sept. 2002
|Mexican Peso                                       |  |             | 323,500 |                |  |                | 9.01 - 9.02  |               |  |   | (9  | ) |  | Oct. - Dec. 2002 
|Mexican Peso                                       |  |             | 51,000  |                |  |                | 9.02         |               |  |   | 5   |   |  | Mar-03           
|                                                   |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 
|                                                   |  |             | 703,500 |                |  |                |              |               |  | $ | 39  |   |  |                   |  | 
|                                                   |  |             |         |                |  |                |              |               |  |   |     |   |  |                   |  | 



|(1) |  | The fair value of the option contracts presented above, an unrealized
gain of $196,000 and $49,000 at March 31, 2003 and 2002, respectively,
represents the carrying value and was recorded as other receivables
or as an
offset to accrued liabilities in the consolidated balance sheets.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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The table below describes the forward contracts that were outstanding at March
31, 2002 (in thousands except for weighted average contract rate):

March 31, 2002:

|                                |  |             |          |          |  |          |          |                |  |  |       |  |  |   |       |  
|------------------------------- |  | ----------- | -------- | -------- |  | -------- | -------- | -------------- |  |  | ----- |  |  | - | ----- | -
|                                |  | Forward     |          |          |  |          |          | Weighted       |  |  |       | 
|                                |  | Position in |          |          |  |          |          | Average        |  |  |       | 
|                                |  | Mexican     |          | Maturity |  | Contract |          | Fair Value in 
|Foreign Currency                |  | Pesos(1)    |          | Date     |  | Rate     |          | U.S.Dollars(1)
|                                |  |             |          |          |  |          |          |               
|Buy US Dollar/sell Mexican Peso |  |             | 85,000   |          |  |          | 4/30/02  |                |  |  | 10.23 |  |  | $ | 1,064 |  
|Sell US Dollar/buy Mexican Peso |  |             | (85,000  | )        |  |          | 4/30/02  |                |  |  | 9.24  |  |  |   | (177  | )
|Buy US Dollar/sell Mexican Peso |  |             | 81,000   |          |  |          | 5/31/02  |                |  |  | 10.11 |  |  |   | 874   |  
|Sell US Dollar/buy Mexican Peso |  |             | (81,000  | )        |  |          | 5/31/02  |                |  |  | 9.26  |  |  |   | (150  | )
|Buy US Dollar/sell Mexican Peso |  |             | 80,000   |          |  |          | 6/28/02  |                |  |  | 9.95  |  |  |   | 610   |  
|Sell US Dollar/buy Mexican Peso |  |             | (80,000  | )        |  |          | 6/28/02  |                |  |  | 9.36  |  |  |   | (115  | )
|Buy US Dollar/sell Mexican Peso |  |             | 48,000   |          |  |          | 7/31/02  |                |  |  | 10.07 |  |  |   | 425   |  
|Sell US Dollar/buy Mexican Peso |  |             | (48,000  | )        |  |          | 7/31/02  |                |  |  | 9.16  |  |  |   | 37    |  
|Buy US Dollar/sell Mexican Peso |  |             | 100,000  |          |  |          | 8/30/02  |                |  |  | 10.05 |  |  |   | 842   |  
|Sell US Dollar/buy Mexican Peso |  |             | (100,000 | )        |  |          | 8/30/02  |                |  |  | 9.21  |  |  |   | 39    |  
|Buy US Dollar/sell Mexican Peso |  |             | 45,000   |          |  |          | 9/30/02  |                |  |  | 10.09 |  |  |   | 371   |  
|Sell US Dollar/buy Mexican Peso |  |             | (45,000  | )        |  |          | 9/30/02  |                |  |  | 9.25  |  |  |   | 20    |  
|Buy US Dollar/sell Mexican Peso |  |             | 110,000  |          |  |          | 10/31/02 |                |  |  | 10.09 |  |  |   | 844   |  
|Sell US Dollar/buy Mexican Peso |  |             | (110,000 | )        |  |          | 10/31/02 |                |  |  | 9.31  |  |  |   | 24    |  
|Buy US Dollar/sell Mexican Peso |  |             | 30,000   |          |  |          | 11/29/02 |                |  |  | 10.27 |  |  |   | 265   |  
|Sell US Dollar/buy Mexican Peso |  |             | (30,000  | )        |  |          | 11/29/02 |                |  |  | 9.33  |  |  |   | 13    |  
|                                |  |             |          |          |  |          |          |                |  |  |       |  |  |   |       |  
|                                |  |             |         |          |  |          |          |                |  |  |       |  |  | $ | 4,986 |  
|                                |  |             |          |          |  |          |          |                |  |  |       |  |  |   |       |  



|(1) |  | The fair value of the forward positions presented above, an unrealized
loss of $4,986,000 at March 31, 2002, has been recorded in accrued
liabilities in the consolidated balance sheets.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




ITEM 4. CONTROLS AND PROCEDURES

The Companys principal executive officer and principal financial officer have
evaluated the effectiveness of the Companys disclosure controls and
procedures, as such term is defined in Rule 13a-14(c) of the Securities
Exchange Act of 1934, as amended, within 90 days of the filing date of this
Quarterly Report on Form 10-Q. Based upon their evaluation, the principal
executive officer and principal financial officer concluded that the Companys
disclosure controls and procedures are effective.

There have been no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the
date the Company performed the evaluation.

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##### Table of Contents






PART II. OTHER INFORMATION




Item 1. Legal Proceedings

See discussion under Legal Proceedings in the Companys Annual Report on
Form 10-K for the year ended December 31, 2002.




Item 2. Changes in Securities and Use of Proceeds

None.




Item 3. Defaults Upon Senior Securities

None.




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

None.




Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

(a)     Exhibits. The following documents are exhibits to this quarterly report
on Form 10-Q.

|        |  |                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                   
|Number  |  |                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                   
|3.15    |  | Deed of Incorporation (acta constitutiva) and current
by-laws (estatutos sociales) of Distribuidora Comercial
Jafra S.A. de C.V., together with an unofficial summary
thereof in English, dated February 26, 2003.
|        |  |                                                                                                                                                                                                                   
|3.16    |  | Articles of Association of Jafra Worldwide Holdings (Lux)
S.a.R.L., together with an unofficial summary thereof in
English, dated February 24, 2003.                                                              

(b)     Reports on Form 8-K

On March 18, 2003, the Company filed a Current Report on form 8-K, dated
March 18, 2003, with the Securities and Exchange Commission regarding fair
disclosure, which information was reported under Item 7, Financial Statements
and Exhibits and Item 9, Regulation FD Disclosure.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |  |  |  |                                                         
| |  |  |  | --------------------------------------------------------
| |  |  |  | CDRJ Investments (Lux) S.A.                             
| |  |  |  |                                                         
| |  |  |  | /s/ RONALD B. CLARK                                     
| |  |  |  |                                                         
| |  |  |  | Ronald B. Clark                                         
| |  |  |  | Chief Executive Officer of the Advisory Committee and   
| |  |  |  | Director                                                
| |  |  |  |                                                         
| |  |  |  | /s/ MICHAEL A. DIGREGORIO                               
| |  |  |  |                                                         
| |  |  |  | Michael A. DiGregorio                                   
| |  |  |  | Senior Vice President and Chief Financial Officer of the
| |  |  |  | Advisory Committee (Principal Financial Officer)        

Date   May 8, 2003

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CERTIFICATIONS

I, Ronald B. Clark, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of CDRJ Investments
(Lux) S.A.;                                                                                                                                                                                                                                            
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report:                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                        



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date May 8, 2003



| |  | /s/ RONALD B. CLARK                                                          
| |  | -----------------------------------------------------------------------------
| |  |                                                                              
| |  | Ronald B. ClarkChief Executive Officer of the Advisory Committee and Director

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CERTIFICATIONS

I, Michael A. DiGregorio, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of CDRJ Investments
(Lux) S.A.;                                                                                                                                                                                                                                            
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report:                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:                                                                                                        



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date May 8, 2003



| |  |  | /s/ MICHAEL A. DIGREGORIO                                                                                                     
| |  |  | ------------------------------------------------------------------------------------------------------------------------------
| |  |  |                                                                                                                               
| |  |  | Michael A. DiGregorioSenior Vice President and Chief Financial Officer
of the Advisory Committee (Principal Financial Officer)
|
| |  |  |                                                                                                                               

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